Issue link: http://savannah.uberflip.com/i/1542376
17 1 The Savannah Outlook: 2026 Michael J. Toma Fuller E. Callaway Professor of Economics Parker College of Business Georgia Southern University Mojdah Asimi, Research Assistant, Georgia Southern University In 2025, growth in the Savannah regional economy was held back by uncertainty caused by the volatile evolution of international trade policy, lingering effects of inflation on household finances, and diminished consumer sentiment amidst what appears to be a k-shaped path for the economy. Collectively, these factors constrained business and consumer spending and disrupted the regional logistics sector. However, damage to the Savannah metro economy was mitigated by continued growth in the regional automotive manufacturing sector and development linked to port activity. This scenario will continue to unfold in 2026 as consumers and businesses remain subject to volatility in international trade policy, timid hiring and business investment, and economic uncertainty. In 2026, baseline growth in the regional economy will be supported by growth in manufacturing, logistics and distribution, port activity, and real estate development. Employment growth in 2026 is projected to be less than 1% with firms adding about 1,000 to 2,000 jobs during the year. The risk of a recession undermining growth in the US and Georgia economy is elevated and should a recession occur, the regional tourism economy and retail trade will suffer. Nonetheless, diversification of the regional economy is provided by 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 2026. General Conditions and 2026 Forecast The Department of Economics produces the quarterly publication, Economic Monitor, analyzing 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 also 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 2025, over-the-year growth in the regional economy as measured by the coincident index was 0.9%. The upside was limited by shrinkage in the regional paper industry curbing growth in the manufacturing sector otherwise experiencing continued expansion of the electric vehicle manufacturing sector. A primary economic coincident factor of the Savannah Business Index is nonagricultural employment in the Savannah MSA. Through the third quarter of 2025, total employment was 207,300. The employment base contracted by 0.3% in 2025 owing to economic uncertainty which constrained both household spending and business investment. Private sector employers shed 1,500 workers (-0.8%) while 800 public sector jobs were added in the region, primarily in local government. In goods producing sectors (manufacturing and construction), employment decreased by 900 workers (-2.8%). Strength of growth in the manufacture of transportation equipment (automobiles and aircraft) was undercut by job losses in the regional paper manufacturing industry toward the end of 2005. Construction employment decreased by 700 workers (-6.7%). Expectations are for a return to growth in the production of goods in 2026 as development of the regional automotive industry continues. Service producing sectors added 300 workers (+0.2%). Service sector growth was strongest in education and health services (+700 jobs, +2.2%), local government (+600 jobs, +3.3%), and in the hospitality sector (+500 jobs, +2.0%). Business and professional services employment declined 5% (-1,200 jobs). Logistics sector employment slipped 2.2% as the sector shed 400 jobs, an unsurprising outcome given the uncertainty of international trade policy during 2025.