Savannah Chamber

48 at the airport up 7.5%. Electricity sales (a broad indicator of growth in residential, commercial and industrial activity) increased 2.4%, while retail sales increased 6%. The Savannah Metro Business forecasting index is designed to anticipate regional economic activity during the upcoming nine- month period. The forecasting index primarily is developed from indicators characterizing the regional housing and labor markets, but includes forecasting elements characterizing broader regional and national economic factors. The forecasting index is up 1% from year-ago data, but substantially below growth recorded in recent quarters. The slowing points toward modest growth in 2020. The forecasting index is currently driven strength in the housing market, but partially offset by rising unemployment insurance claims. Building permits for single family homes and the valuation of those permits issued increased, but the third-quarter increase in unemployment insurance (UI) claims restrained the forecasting index. Regionally, the labor market remains relatively healthy. Notable first, is that despite the third quarter increase in UI claims, the total number of initial UI claims declined 2.5% from already below normal levels in 2018 and remained well below the level typically experienced during the pre-recession period from 2000 to 2007. The number of initial filings for UI averaged 497 per month in 2019 as compared to 510 per month in 2018. This is about 30% below the pre-recession monthly norm and compares to 2,000 new UI claims per month when the Great Recession was at its worst. With respect to the intensity of workforce usage, the length of the workweek in the private sector remained roughly stable in 2019 at 33.2 hours, while the average hourly wage declined to $22.75 per hour from $22.95 per hour. As indicated above, the bedrock foundation components of the regional economy are currently performing well (the coincident index), but with slow growth in non-agricultural employment. The regional forecasting index is sending the signal of modest growth for 2020, but expectations should be tempered by the uncertainty caused by the trade war with China and modest overseas growth that has affected Georgia's international trade through the port of Savannah. In 2020, employment in the Savannah metro area is expected to increase approximately 1%. This is below the long-term trend rate (+1.7%), and is roughly equal to the 1.1% increase during 2019. Expectations for employment growth in 2020 remain modest and will depend on ramping up of operations at announced development projects opened in 2018 and 2019 and those planned for 2020. The annual unemployment rate for 2019 was 3.4% for the region and a similar rate is expected for 2020. Maintained tightness in the labor market should create upward pressure on wages in 2020. Turning to population growth, the region's long-run attractiveness as a place to live, work, and retire remains unaffected by short- run business cycles. Tourist demographics describe a very desirable pool of would-be in-migrants. The typical Savannah tourist (14.5 million annual visitors) is well-educated and has above-average income. Modest job creation in the regions and markets that feed Savannah's in-migration will continue to influence population growth in the short-run. Population growth in 2020 is expected to be slightly below normal, easing somewhat with the moderation in employment growth. For 2020, population growth is expected to be slightly under 1%, somewhat less than the 1.5% pace of growth since 2010. In conclusion, the Savannah Business Index indicates the regional economy has been growing for ten years, creating 35,000 new jobs along the way – mostly in the private sector. The regional forecasting index is sending the message of modest growth for 2020. In a year of modest expectations, expected drivers in 2020 will be port-related real estate development, logistics and distribution, manufacturing, port activity, and tourism. On the goods-producing side of the economy, manufacturing will continue to expand, but at a slower pace while construction continues to expand sustainably on trend. The Savannah metro economy will expand in 2020, albeit at a slower pace than in 2019. Economic Foundations The remainder of the forecast considers expected activity in the six major underlying economic foundations of the Savannah MSA economy. Recall that these drivers are (in no particular order) manufacturing, the port, tourism, health care, the military, and real estate development. Manufacturing Manufacturers in the Savannah MSA added 1,000 workers (+5.5%) during 2019, matching the outstanding growth of the previous year. A review of recent announcements from headlining companies in the sector point toward continued growth in 2020. The manufacturing workforce was 19,900 at the end of 2019, and is expected to add another 500 workers in 2020.

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