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22 by about 13% and boardings at the airport up by 18%. Reflecting the growth in tourism and improving consumer confidence, retail sales were up by 6% as compared to previous year data. Lastly, electricity sales, which are a broad indicator of general growth in residential, commercial and industrial activity, increased about 3%. The Coastal Empire Leading Economic Index is designed to forecast regional economic activity over the upcoming nine-month period. The index increased at a solid pace through the third quarter of 2014. At the end of 2013, the leading index was experiencing explosive growth that carried into early 2014, but now has adjusted to a more reasonable and sustainable pace of 4% annual growth. The forecasting index primarily is developed from indicators characterizing the regional housing and labor markets, both of which hit important milestones toward the end of 2014. First, after accounting for 14,000 new jobs generated since 2005, the number of initial claims for unemployment insurance (UI) fell to the level typically experienced during the pre-recession period of 2000 to 2007. Toward the end of 2014, there were about 800 new filings for UI as compared to about 1000 per month in comparable year-ago data, a decline of 20%. The second important milestone was hit in the residential construction market. For the three month period beginning in August 2014, building permit issuance for single family homes was approximately equal to the 1995-2002 pre-building boom period of "normal" construction activity. The number of permits issued increased 20% for the second consecutive year. As a result, construction sector employment added 300 workers (+5.8%) as compared to year-ago data and this growth should continue into 2015. As indicated above, the bedrock foundation components of the regional economy are currently performing well (the coincident index). Further, the regional forecasting index is signaling for continued strengthening in the Savannah metro economy. Improving and normalizing conditions in the regional labor and housing markets, along with substantially more optimistic consumers in the South Atlantic states, suggest 2015 will be a better year than 2014. Economic growth will be above average. In 2015, employment in the Savannah metro area is expected to increase by roughly 2.4% to 2.6%. This begins to approach the fairly rapid pace of growth in the mid-2000s. However, growth for 2015 is more sustainable because it is much more broadly based as compared to the pre-recession growth fueled by a nationwide housing boom. 2014 was somewhat better than expected, and was characterized by respectable growth that is sustainable through 2015. Continued employment growth will further reduce the unemployment rate to 6.3% for the year, with the likelihood that the monthly rate will approach the 6% mark toward year-end. 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. Tourist demographics (13 million annual visitors) describe a very desirable pool of would-be in-migrants. The typical Savannah tourist is well-educated, has above-average income, and is in the peak years of earning power before approaching retirement age. Additional healing in the housing markets the feed Savannah's in-migration should begin to influence population growth in the short-run. For 2015, population growth is expected to be approximately 1.3%, about the same as the typical pace of growth since 2010. In conclusion, the Coastal Empire Coincident Economic Index indicates the regional economy has been expanding for nearly five years, with substantially accelerating growth during the past 18 months. The regional forecasting index is sending the message of continuing and sustainable growth for 2015. Current drivers in the economy are tourism, port activity, business/professional services, and consumer spending, with manufacturing and construction playing supporting roles. Economic expectations for 2015 are relatively good, are expected to exceed the performance of 2014, and should resemble the above average growth rates experienced in the mid-2000s. 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, tourism, health care, the military, and real estate development. Manufacturing Savannah's show-case manufacturers continued to show their strength in 2014 and are poised for additional growth in 2015. Gulfstream now employs over 10,000 in the region and achieved two notable goals late in 2014; the delivery of the 100 th G650

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