Savannah Chamber

28 On the goods producing side of the economy (manufacturing and construction), employment is 3% above pre-pandemic peak. Manufacturing added 800 workers (+4.2%) and construction added 600 workers (+7.9%). During 2022, manufacturing matched its all-time high in data going back to the 1970s. Manufacturing is poised for notable growth in 2023 as hiring begins to ramp up for the Hyundai Metaplant and its suppliers. Among the remaining coincident indicators, tourism indicators surged again in 2022. Hotel/motel sales taxes and boardings at the airport increased about 20% during the year. Retail sales increased 15% and electricity sales to all users increased 5.3% while containers handled at GPA facilities in Savannah during calendar year 2022 increased 4.3%. 2023 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 down toward the end of 2022 weighed down by moderating conditions in the housing market and labor markets. The Savannah metro economy is expected to continue growing into 2023, but weakening national economic conditions are expected to emerge toward the middle of 2023. In the Savannah area, this is more likely to translate into a leveling off of economic activity rather than a significant decline. Regionally, the health of the labor market substantially improved in 2022 but modestly softened toward the end of the year. Initial claims for unemployment insurance (UI) were less than one-fourth of the numbers posted in 2021 but increased from 1.8% of the workforce to 3.4% of the workforce in 2022. Nonetheless, tightness in the labor market held the unemployment rate down in 2022 to 2.8%. The tightness has led to extraordinary wage gains in 2022 of 13%. In 2023, employment in the Savannah metro area is expected to increase 2.5%, or about 5,000 jobs. Expectations for regional employment growth in 2023 are moderated by softening national economic conditions. However, continued growth in port activity, logistics, real estate development and construction, and ramping up of manufacturing activity will offset any spillover from the national economy to the regional economy. The projected annual unemployment rate for 2023 is 3% to 3.3%, up slightly from 2022. Unemployment rates will stabilize and likely drift up modestly by mid-year before dropping again as the year comes to a close. 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. Population growth in 2023 is expected to be about average, driven by employment growth but moderated by economic softness in the rest of the country. For 2023, population growth is expected to be 1.6%, equal to the long-term pace of growth since 2010. Population growth in Bryan and Effingham Counties combined is expected to be about 2.5%, continuing the trend of more rapid growth in counties adjacent to the economic core in Chatham County. Bryan County has been one of the fastest growing counties in the state and nation since 2010, a trend expected to continue in 2023. The regional economy roared back in 2021 with that momentum continuing into 2022. For 2023, the business forecasting index is sending the message of moderating growth. Drivers of the regional economy in 2023 will be logistics and distribution, port-related real estate development, residential construction, and manufacturing employment growth associated with ramping up of hiring for the Hyundai Metaplant and its associated suppliers. Although not matching the exceptional growth of 2021 and 2022, 2023 will be a year of about average growth in the Savannah metro economy, with upside potential limited by a softening nationwide economy.

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