Savannah Chamber

18 2 2026 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. Through the third quarter of 2025, the forecasting index is down 1% over-the-year. Housing market indicators were volatile through 2025 as the average value of a building permit issued bounced around as builders attempted to gauge the reaction of potential homebuyers to elevated mortgage rates and higher home prices. On average, mortgage rates remained roughly at 2024 levels (6.7%) through the first half of the year while declining about one-half percentage point into the fourth quarter. Issuance of building permits for single family homes increased 16% (through 2025, Q3 on an over-the-year basis) while the average value of a building permit issued was up 2.8% as compared to 2024 (through August). Regionally, the labor market remains very tight with consistently low unemployment. Initial claims for unemployment insurance (UI) are down 12.6% (as compared to 2024 Q3). However, claims began ticking up in the third quarter, increasing by 4.6% as compared to the second quarter. Nonetheless, the regional unemployment rate has remained remarkably low and stable at 3.1% since late 2021. After adjusting for inflation, wage growth was exceptionally strong at 11% on an over-the-year basis since Q4 of 2024. The average hourly wage rate has increased $2.75 per hour, rising to $30.14 per hour. This gain more than offsets the weakness in wage growth and purchasing power during the period of elevated inflation during 2023. Expectations for 2026 wage growth are about 4% as additional higher paying jobs in manufacturing are created in the regional automotive industry. In 2026, employment in the Savannah metro area is expected to increase between 0.5% and 1%, adding roughly 1000 to 2000 net jobs. Regional employment growth in 2026 will be heavily influenced by continued growth in manufacturing and logistics hiring along with gains in health services employment. However, given uncertain economic conditions in 2026, retailing along with hospitality will struggle if the US and state economies slip into recession. The projected annual unemployment rate for 2026 is 3.5%, up from the four-year average of 3.1%. Unemployment rates in the region will be relatively lower than the state and US rates because of the employment opportunities afforded by a very tight labor market again in 2026. 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 2026 is again expected to outpace more modest growth in Georgia and the US. Even as increased border security reduces in-migration at the national level, the Savannah metro area remains an attractive area for relocation because of strong employment prospects spurred by the growing regional automotive industry and logistics sector. For 2026, population growth is expected to be approximately 1%, and although less than the long-term trend of 1.8%, the region remains attractive to both job-seekers and retirees. 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. The regional economy struggled to create jobs in 2025 but is expected to rebound modestly in 2026 and outpace growth in the Georgia and US economies. Modest growth of one-half to one percent in the employment base is expected to be underpinned by continued hiring in manufacturing and with lesser growth in logistics and health services. Employment prospects in retailing and the hospitality industry will be curbed by general weakness in the state and national economies and will experience job losses if a recession occurs. Port related real estate development will continue on the pace established in 2025. Residential construction will be supported by employment growth and in-migration. Overall, the pace of growth in 2026 is expected to be modest and remain at risk to the elevated threat of recession in 2026. 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.

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