Sometimes our senses tell us very different stories than hard numbers tell.
As I make my way around town, I’m struck over and over again by the new investment and construction that we’re seeing.
National retailers are once again entering the Savannah market, new residential construction is occurring throughout the metro area and new hotels are cropping up, too.
Just about everywhere I turn, it seems like folks are more optimistic about the local economy.
So things are going swimmingly, right?
But we’ve been seeing some really soft economic data over the last couple of months, especially regarding local employment. As I’ve noted before, employment is a lagging economic indicator, but we’re long past the point where some of these new investments should be showing up in the data.
In June, there were 1,556 initial claims for unemployment insurance in Chatham County. That’s up significantly from 1,356 in June 2012. That comes on top of increases in recent months, so it’s no blip on the radar screen.
Only about 30 of Georgia’s 159 counties saw year-over-year increases in the number of unemployment insurance applications in June, so we can’t blame this on statewide trends.
Compared to a year ago, initial claims for unemployment insurance in Georgia fell by 18.6 percent. In Chatham County, claims increased by 14.7 percent.
Last week’s release by the Georgia Department of Labor also included the estimate of local payroll employment. In June, the Savannah metro area had 159,400 jobs, up from 158,300 in June 2012.
That small .7 percent increase is certainly not enough to keep pace with population growth. Over that same period, statewide employment grew by a healthy 2.2 percent, despite a 1.7 percent decline in government employment.
Over the past year, Georgia’s private sector grew at the fast clip of 3.0 percent.
We have to wait a few more days before we see the estimate of the local unemployment rate, but don’t expect good news on that.
There could obviously be many factors behind Savannah’s recent sluggishness compared to the rest of the state, but it’s possible that the sequester has been the biggest culprit. Many civilian employees at local federal installations are seeing significant pay cuts, and a wide variety of independent contractors are getting less business too.
The most recent local housing market data is also pretty soft.
Again, general impressions are telling a different story than the hard numbers.
My friends in real estate seem to be doing just fine these days and are optimistic about the local residential market.
But June’s single-family residential sales in the Savannah metro area were flat compared to a year ago.
And flat is not where we need to be. Given longstanding historical trends regarding annual turnover of existing homes and the pace of new home construction, we probably need to see total sales increase more than 20 percent to return to some semblance of normal.
June is typically a strong month for home sales, but the current sales rate leaves us with 8.3 months of inventory. That’s higher than the inventory in June 2012 and much higher than historical norms.
I don’t see any reason for panic in these soft numbers, but there’s ample reason for caution.
And there’s ample reason for local governments to redouble their focus on good public policy that fosters entrepreneurship.
And what about the Whole Foods Effect?
There’s compelling evidence that the opening of a specialty grocery store will boost nearby property values — the so-called “Whole Foods Effect.”
With our local Whole Foods Market opening next month, we could see obvious impacts on the immediate area and on neighborhoods like Parkside.
The new store is the latest in a series of positive changes stretching back over a decade.
Remember when that entire portion of Victory Drive seemed to be on the wane?
Back around 2000, I had one of the saddest retail shopping experiences of my life at the old Kmart near the Truman Parkway. But that plaza got a major upgrade, and other national chains have invested in the area in recent years.
And a lot of young adults have moved into the relatively inexpensive neighborhoods off Skidaway Road. That bodes well for the area’s future.
Despite ongoing concerns about traffic congestion, Whole Foods’ presence and the positive momentum could spur investment in other properties along the corridor.
It’s going to be interesting to watch the developments.
City Talk appears every Tuesday and Sunday. Bill Dawers can be reached via billdawers@comcast.net and http://www.billdawers.com. Send mail to 10 E. 32nd St., Savannah, GA 31401.