Armstrong State University’s latest Coastal Empire Economic Monitor reports that the Savannah metro economy accelerated during the first quarter of 2016. Solid gains in total employment along with nearly all other economic indicators supported strong regional economic activity.
The Economic Monitor, which analyzes data and identifies trends affecting the regional economy, tracks key growth areas. The Coastal Empire coincident economic index increased to 172.5 from 171.8 in the previous quarter, noting an annualized pace of 3.3 percent during the opening quarter of 2016.
“Consumer expectations in the south Atlantic states will remain positive in the second quarter,” said Michael Toma, Fuller E. Callaway Professor of Economics and the Director of Armstrong’s Center for Regional Analysis. “Economic growth is expected to continue through the second half of 2016 at a pace comparable to first-quarter growth.”
In the housing market, building permit issuance for single-family homes has hovered around 500 new homes per quarter since 2015. The seasonally adjusted number of new residential homes permitted for construction declined 4.4 percent during the first quarter, falling from 509 to 487. However, the housing market is only off one percent (six units) from year-ago levels. The average value of a building permit issued for single family homes jumped 23 percent to $251,800 from $205,600, though the bounce is not considered sustainable and is expected to return to typical levels in second quarter data.
Additional highlights from the latest Economic Monitor include:
The Coastal Empire leading economic index increased 1.4 percent, rising to 154.5 from 152.4 in the previous quarter. The index was primarily lifted by a significant jump in the average value of building permits issued for single-family homes and by diminished new filings for unemployment insurance. Growth in total employment, electricity sales and port activity also contributed to the increase in the index.
Seasonally adjusted employment in Chatham, Bryan and Effingham counties increased 1,300 jobs to average 175,600 for the quarter. Over the course of the year, employment growth was 3.6 percent, marking the seventh consecutive quarter during which employment growth exceeded 3 percent (roughly twice the long-term growth rate since 1990). Savannah’s growth in the current period is diverse, reaching across many sectors, unlike the immediate pre-recession period that relied mostly on surging construction activity.
Manufacturing added 200 workers while construction firms lost 100 workers. After steadily adding workers through 2014, construction sector employment has been nearly stable at 6,400 workers for five consecutive quarters. Total seasonally adjusted employment in manufacturing increased to 18,100 during the opening quarter of the year.
Consumer confidence wavered during the first quarter of the year, but appears to be setting up to be back on track during the second quarter.
In the labor market, seasonally adjusted initial claims for unemployment insurance (UI) fell 14 percent from 758 claims to 651 per month. The number of UI claims is now 15 percent below previous year data and is about 100 claims less than expected, given the size of the workforce. With UI claims and steady job growth, the unemployment rate fell to 5.2 percent (seasonally adjusted).
The Coastal Empire Economic Monitor presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area (MSA). The quarterly report measures the heartbeat of the local economy, based on the analysis of economic data from the U.S. Census Bureau, the U.S. Department of Labor’s Bureau of Labor Statistics, the City of Savannah, Georgia Power and the three counties in the MSA—Chatham, Bryan and Effingham.