Issue link: http://savannah.uberflip.com/i/1444971
24 Employment growth was uneven across major sectors of the regional economy and the pandemic-induced restructuring of the regional economy is clearly present in the service sector. Of the nine thousand jobs created in 2021, three sectors account for nearly all the growth: business and professional services, leisure and hospitality, and logistics. Business and professional services soared 19%, adding 4,600 workers while logistics increased 13.5% (+2,100 jobs) and leisure and hospitality increased 10% (+2,300 jobs). Business and professional services is at 121% of its pre- pandemic level while logistics is at 114%. Tourism and retail trade employment remain about 5% below pre-pandemic level. Public sector (government) employment declined 2.6% (-600 jobs). On the goods producing side of the economy, manufacturing added 300 workers (+1.7%) and construction added 200 workers (+2.2%). Note that some components of the manufacturing sector such as bakeries and beer breweries are linked to the tourism industry and will continue to recover along with leisure and business visitation to the region. Among the remaining coincident indicators, tourism indicators skyrocketed in 2021. Hotel/motel sales taxes and boardings at the airport doubled as compared to the 2020 level. Retail sales increased 22% and electricity sales to all users increased 8%. 2022 Savannah Regional Outlook 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 trending up toward the end of 2021 and is poised to further accelerate into 2022 as labor market and housing market gains become more firmly entrenched. In 2021, the forecasting index is 37% higher than the lows experienced in the second and third quarter of 2020. The upswing in recent data point toward continued recovery and growth for the regional economy in 2022. Regionally, the health of the labor market substantially improved in 2021. Initial claims for unemployment insurance (UI) plummeted from their stratospheric levels in 2020. From a peak of 60,000 in April 2020, new claims for UI are down to 486 per month as of November 2021. The November figure is 27% lower per month than in the six months immediately preceding the pandemic. Consequently, the unemployment rate declined from a peak of 16.6% in April 2020 to 2.2% by November 2021. With respect to the intensity of workforce usage, the length of the workweek in the private sector increased to 33 hours (+6.4%) from the pandemic low of 31.1 in the second quarter of 2020. Wage growth was sluggish in 2021 but is trending up as the year ends. Wages are 4.2% higher than at the low point of the pandemic, and more recently are trending up at approximately 4%. In 2022, the number of new claims for UI is expected to stabilize about 10% to 15% below recent (non-pandemic) levels, given the current and expected tightness in the labor market. The length of the workweek and hourly wages will increase in the range from 3% to 5% through 2022. In 2022, employment in the Savannah metro area is expected to increase 3.8%. This exceeds the long-term trend growth rate since 2010 of 3.2%. Expectations for employment growth in 2022 are strong, but potentially tempered by pandemic-related setbacks that could shave up to one percentage point of growth if travel and tourism are unexpectedly constrained. Pent-up demand and increased spending by local consumers will mitigate unexpected weakness in tourism and will boost employment growth in the absence of additional adverse economic effects attributed to Covid- 19. The projected annual unemployment rate for 2021 is 3.6%, down from was 7% in 2020. Unemployment is expected to be 3.3% to 3.5% in the region in 2022. Unemployment rates will stabilize and likely drift up from current year-end 2021 rates just above 2% because increasing re-attachment to the labor force will increase the number of persons seeking work.