Issue link: http://savannah.uberflip.com/i/1444971
23 The Savannah Outlook: 2022 Michael J. Toma Fuller E. Callaway Professor of Economics Parker College of Business Georgia Southern University Sandon Presly, Research Assistant, Department of Economics The Savannah regional economy roared back from its Covid-19 stricken state in 2021. The 15% plunge in employment during 2020 was erased by strong growth throughout 2021. Similarly, unemployment surged to 16.1% in 2020 but plummeted to 2.3% by late 2021. Restructuring of the regional economy occurred in that workers displaced in the short run from high-contact service sectors such as tourism and hospitality, retail trade, and other services re-connected to the workplace in the logistics sector and also in business and professional services. Both of these latter sectors experienced growth propelling them beyond their pre-pandemic level of employment by as much as 15% to 20%. In 2022, baseline growth in the regional economy will be powered by strength in logistics and distribution, port activity, and real estate development while continued recovery in tourism and tourism-related manufacturing establishments (specialty bakeries and breweries, for example) will be the difference between a good year and an exceptional year. Economic growth in 2022 will be 3.8% with one-half percent growth added by continued recovery in tourism throughout the year. Service sector growth will be charged by increased consumer spending associated with pent up demand resulting from the pandemic. Housing markets will continue to exhibit strength in 2022 as well. The diversification of the regional economy is provided by the strength of its underlying economic drivers that are (in no particular order) manufacturing, port operations and logistics, tourism, health care, military activity, and real estate development. Each of these facets of the regional economy will be discussed after the presentation of a general economic forecast for the region in 2022. General Conditions and 2022 Forecast The Department of Economics, in association with the Center for Business Analytics and Economic Research (CBAER), in the Parker College of Business at Georgia Southern University produces the quarterly publication, Economic Monitor, that analyzes current economic conditions in the Savannah MSA (Chatham, Bryan, and Effingham counties), and presents short term forecasts for the area (email: mtoma@georgiasouthern.edu). The Economics Department produces the leading (forecasting) index and the coincident index of regional economic activity in the Savannah metro area. The coincident index of economic activity is designed to measure the regional economic "heartbeat" based on factors characterizing the underlying foundational components of the Savannah metro area economy. During the past several years, annualized growth in the Savannah Business Index averaged 2.2%. The growth phase, reaching back to 2010, came to a screeching halt in the second quarter of 2020 as consumer, employer, and government reaction to the pandemic severely curtailed business activity. After the business index plunged 41% (annualized) in the second quarter of 2020, it rebounded 30% (annualized) in the closing quarter of 2020. In 2021, the business index increased at an average pace of 17% (annualized) through the third quarter and has recovered to exceed the pre-pandemic level by 2.6%. A primary economic coincident factor is nonagricultural employment in the Savannah MSA. By mid-2021, employment recovered to its pre-pandemic level, and exceeded it by 1.5% as of October. Through October, monthly regional employment averaged 189,800, two hundred workers more than in 2019 and 9,000 more than in 2020.