Savannah Chamber

26 2025 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 up 4.3% over-the-year through the third quarter of 2024. This follows lackluster behavior in 2023 attributed to volatility in the housing market in 2023 associated with the substantial uptick in mortgage interest rates. Housing market volatility is subsiding as buyers adjust to the new norm of higher interest rates that did subsequently back off one point from the peak in 2023 of 7.6%. Issuance of building permits for single family homes increased 10.3% (as of 2024, Q3) on an over-the-year basis. Further, the average value of a building permit issued is up 4% as compared to six months prior in 2024 Q1. Regionally, the labor market remains very tight with low unemployment. Initial claims for unemployment insurance (UI) are down 8.1% (as compared to 2023 Q3). The regional unemployment rate modestly increased to 3.3% from 3% in 2023. After adjusting for inflation, wage growth was 2.4% in 2024, indicating increased purchasing power for workers and their families in the region. This is a welcome change after weakness in wage growth and purchasing power during the period of elevated inflation during 2023. Expectations for 2025 wage growth are 2.5% to 2.75% as additional higher paying jobs in manufacturing are filled as robust growth in the regional automotive industry continues. In 2025, employment in the Savannah metro area is expected to increase 2%, or about 4,000 jobs. Regional employment growth in 2025 will be governed by manufacturing and logistics hiring along with support from health services, construction, and the hospitality sector. The projected annual unemployment rate for 2025 is 3.5%, up slightly from 2024. Unemployment rates will be held lower than normal by re-absorption of workers into what will be a very tight labor market again in 2025. The anticipated slowdown in Georgia and national economic growth will manifest in the Savannah metro area in a marginally higher unemployment rate. 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 2025 is again expected to be above average, driven by general in-migration but also that associated with employment opportunities in the growing regional automotive industry. For 2025, population growth is expected to be 1.8%, about two-tenths of a percent above the long-term pace of growth since 2000. Population growth in Bryan and Effingham Counties combined is expected to be about 3.3%, continuing the trend of more rapid growth in counties adjacent to the economic core in Chatham County. Bryan County has been the sixth fastest growing county in the state since 2020. In 2024, economic growth in the Savannah metro region was slightly below the trend pace since 2010 and this is expected to continue into 2025. Moderate growth of 2% in the employment base is expected to be underpinned by strong hiring in manufacturing and with lesser growth in logistics, leisure/hospitality, and health services. Port-related real estate development and residential development will continue on the pace established in 2024 as market expectations re-set to normalized mortgage rates. Overall, the pace of growth in 2025 is expected to be sustainable throughout the year even as the US and Georgia economies weaken. Economic Foundations The remainder of the forecast considers expected activity in the six major underlying economic foundations of the Savannah MSA economy. Recall that these drivers are (in no particular order) manufacturing, the port and logistics, tourism, health care, the military, and real estate development. Manufacturing There is a divergence between headcount "covered" employment and "payroll" employment (by place of work) for the manufacturing sector in the Savannah MSA. The far more accurate, but less timely, headcount of manufacturing employment increased 2,300 workers through the second quarter of 2024 as compared to previous year. This is an 11% increase and follows the 13% increase of the previous year. All told, since the May 2022 Hyundai Metaplant announcement, the regional manufacturing base has increased 25% to 23,600 workers. As a result, an additional $200 million in worker compensation is flowing through the

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