The Savannah area economy will continue to post steady gains in 2018 according to the Georgia Economic Outlook forecast from the University of Georgia’s Terry College of Business and Georgia Southern University’s Center for Business Analytics and Economic Research.
The regional economy, which includes Chatham, Bryan and Effingham counties, has added about 32,000 jobs since 2010, according to Michael J. Toma, director of the Center for Business Analytics and Economic Research.
“That’s pretty significant growth after a loss of about 12,000 jobs during that recession,” Toma said Wednesday during the Savannah Area Chamber of Commerce’s annual Economic Outlook luncheon at the Westin Savannah Harbor Golf Resort and Spa.
Almost all of the growth in the local economy has been in the private sector. Since 2000 the private sector has grown by about 23.5 percent in terms of employment, which Toma said averages out to about three percent a year.
“We also have an economy that is very well diversified… With more diversification, just like with a financial portfolio you less volatility, so you have a more stable environment,” he said.
Area employment is also on the upswing with the metro level expected to increase by approximately 2.8 percent this year, which is above the long-term trend rate of 1.7 percent.
At the close of 2017 the annual regional unemployment rate was 4.4 percent, which is the lowest rate since the mid-1990s. Toma expects further growth will lower that rate to 3.6 percent in 2018.
“The labor market is very strong…
We’re at full employment and we’re about to go below it, in the sense that our unemployment rates are going to dip down with that creation of the 32,000 jobs since 2010,” he said.
Looking ahead to the remainder of 2018, Toma expects the local economy to gain momentum propelled largely by capital investment projects in the area, including Plant Riverside, Savannah River Landing and the deepening of the Savannah River.
“When you start to add up these numbers with a few hundred million here and a few hundred million there those numbers add up to about $2.5 to $3 billion in capital investment in our regional economy,” he said.
“… In 2018 we’re looking at a very good year, above average and above last year, so 2017 was good and 2018 will be a little better. I’m looking forward to a good with solid economic growth.”
Delivering the statewide forecast, Jeffrey M. Humphreys, director of the Selig Center for Economic Growth at the University of Georgia, said Georgia’s economy in 2018 will match its performance last year thanks in large part to economic development projects, population growth and a recovering housing market.
“We believe Georgia will be one of the most successful states when it comes to landing economic development projects. Our state will have available workers and our workforce development programs rank as the best in the nation,” Humphreys said.
Humphreys expects Georgia’s unemployment rate will fall below five percent, which is slightly higher that the national average of 4.1 percent, with every metro area adding jobs.
The fastest job growth will occur in the construction industry, followed by professional and business services, leisure and hospitality, education and health services and wholesale trade, he said.
There are some risks that could lead to a recession, including interest rate hikes, healthcare policy uncertainty, and geopolitical tension, but Humphreys said he doesn’t believe a recession is imminent in 2018, although he does have concern for late 2019 and early 2020.
“Even though we expect economic growth for Georgia, the economy is operating in either the late-middle or late stage of the current economic expansion,” he said.
“Still, we believe that excesses are developing in both the financial markets and the labor markets, which will make the overall economy increasingly vulnerable to the unexpected shock or policy mistake.”