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25 The Savannah Outlook: 2025 Michael J. Toma Fuller E. Callaway Professor of Economics Parker College of Business, Georgia Southern University Eboni Houston, Research Assistant, Georgia Southern University In 2024, the Savannah regional economy was substantially boosted by extensive growth and development in the manufacturing sector, and conditions are set for continued expansion in 2025. Long gone is the stressed economy of the pandemic recession. Regional employment exceeds its pre-pandemic high by 8% while gross regional product (regional GDP) increased 19% from 2020 to 2023. In 2025, baseline growth in the regional economy will be powered by continuing strength in manufacturing, logistics and distribution, port activity, and real estate development. Employment growth in 2025 is projected to be 2% with firms adding about 4,000 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 2025. General Conditions and 2025 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 GSU Economics Department in the Parker College of Business produces a leading (forecasting) index and a coincident index of regional economic activity in the Savannah metro area, collectively known as the Savannah Metro Business indexes. The coincident index of economic and business activity is designed to measure the regional economic "heartbeat" based on factors characterizing the underlying foundational components of the Savannah metro area economy. Through the third quarter of 2024, over-the-year growth in the regional economy as measured by the coincident index was 2.2%. Further upside growth was limited by hurricanes which passed nearby or through point-of-origin markets for Savannah's tourism industry. A primary economic coincident factor of the Savannah Business Index is nonagricultural employment in the Savannah MSA. Through the third quarter of 2024, total employment was 207,800. This represents growth of 2.2%, translating into 4,500 additional jobs in the region. Private sector employers added 3,400 workers (+1.8%) while 1,100 public sector jobs were added in the region. In goods producing sectors (manufacturing and construction), employment increased about 1,000 workers (+2.8%). On the strength of growth in the manufacture of transportation equipment (automobiles and aircraft), overall manufacturing employment increased by 600 jobs (+2.6%), while construction employment increased by about 500 workers (+4.4%). Expectations are for substantial growth in 2025 as the regional automotive industry ecosystem continues ramping up through the year. Service producing sectors added 3,600 workers (+2.1%). Service sector growth was strongest in education and health services (+1,200 jobs, +4.1%), local government (+800 jobs, +4.9%), and in the hospitality sector (+400 jobs, +1.6%). Business and professional services employment was nearly steady following a two-year draw-down period as workers with temporary employment agencies migrated into full-time positions in the region. Among the remaining coincident indicators, GPA container handling in port facilities increased 13% and is back on its long-term trend rate of growth, tourism visitation to the region recorded modest growth, while boardings at the airport increased 5.5%. Retail sales registered growth of 1%.