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19 The Savannah Outlook: 2024 Michael J. Toma Fuller E. Callaway Professor of Economics Parker College of Business Georgia Southern University Jasmine Childress, Research Assistant, Georgia Southern University Julia Toma, Research Assistant, Georgia Institute of Technology In 2023, the Savannah regional economy extended its remarkable recovery from the pandemic recession. The 15% plunge in employment during 2020 has been completely erased by strong growth through 2023. Accordingly, unemployment dramatically declined from its peak at 16.1% in 2020 to 3% in 2023. Employment in all service- and goods-producing sectors of the economy ranges from 3% to 12% higher than pre-pandemic levels. In 2024, baseline growth in the regional economy will be powered by strength in manufacturing, logistics and distribution, port activity, and real estate development. Modest nationwide growth anticipated in 2024 may limit upside potential but is not expected to substantially alter the path of growth in the Savannah area. Employment growth in 2024 will be 2.5% with firms adding about 5,100 jobs during the year. 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 2024. General Conditions and 2024 Forecast The Department of Economics, in association with the Center for Business Analytics and Economic Research (CBAER), in the Office of Research 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. As a result of the pandemic in 2020, the business index plunged 41% (annualized) in the second quarter of 2020, but then rebounded 31% (annualized) in the closing quarter of 2020. For the next four quarters, annualized growth averaged 17%. By the end of 2023, the business index had recovered to exceed the pre-pandemic level by 10%, albeit while wavering slightly in mid-year. A primary economic coincident factor of the Savannah Business Index is nonagricultural employment in the Savannah MSA. Year- to-date through October 2023, total monthly employment averaged 202,600. This represents growth of 1.8%, translating into 3,200 additional jobs in the region. As 2024 opens, employment stands 6% higher than its pre-pandemic peak. Employment growth was strongest leisure/hospitality, education/health services, and construction. Of the net 3,200 jobs created in 2023, growth was led by leisure and hospitality (+1,800, +6.5%), education & health services (+1,600, +5.7%), and construction (+300, +4.2%). Manufacturing added 500 jobs to register 2.6% growth in 2023. Manufacturing is poised for notable growth in 2024 as hiring accelerates for the Hyundai Metaplant, its suppliers, and the Gulfstream expansion. Service sector employment now exceeds its pre-pandemic peak by 5.2% while goods producing sectors (manufacturing and construction) is 9.2% higher than the pre-pandemic peak. Only state and local government remain below pre-pandemic levels. Among the remaining coincident indicators, tourism visitation to the region recorded normal growth in 2023 after surging in 2022. Through the third quarter of the year, hotel/motel sales taxes increased about 3% while boardings at the airport increased 5%. Retail sales increased 3% and electricity sales to all users increased 4.3%. Container traffic re-set to a lower rate of throughput but normalized back on its long-term trend rate of growth.