In a press conference on Dec. 20, President Obama gave his reasons to be optimistic about the economy in 2014.
“We just learned that over the summer, our economy grew at its strongest pace in nearly two years,” said the President. “The unemployment rate has steadily fallen to its lowest point in five years.”
Obama went on to cite a fairer tax code, reduced deficits and the fact that, for first time in twenty years, America produces more domestic oil than it imports.
What about the three-county (or more) region in and around Savannah? We asked a number of people in various fields of business, economic development and academia two questions: 1) Do you see an economic uptick for our local economy in 2014? and 2) Why or why not?
Here are their responses:
Economic Development
Trip Tollison, president & CEO of the Savannah Economic Development Authority (SEDA), said he does see an improving economy in the coming year.
“As our region continues to climb out of the recession, SEDA expects slight economic growth in manufacturing, hospitality/tourism, health care and port/logistics activities.”
But Tollison’s prediction comes with a dose of caution.
“I think a big concern next year is how sequestration and other actions that are taking place at the Pentagon will affect the military personnel and force structure throughout our region.”
Commerce
William “Bill” Hubbard, president & CEO of the Savannah Area Chamber of Commerce, said he’s optimistic. Does he see an uptick in 2014?
“Obviously, the challenge is the definition of ‘uptick,’ but yes, I think we’re very well positioned to improve our lot for a lot of different reasons.”
Hubbard said he expects a 4 to 5 percent increase in tourism.
“We’ve had a decade or more of growth,” he said. “Certainly, we are a very unique product here as an old ‘European’ city with a lot of history and culture. We’ll continue to do very well there.”
According to the Chamber, tourism accounts for a $2 billion annual boost to the local community and employs about 22,000 local workers.
Hubbard pointed out that in the past six years Gulfstream has gone from 3,500 employees to over 9,000, with an announcement for future growth expected soon. JCB continues to grow and Mitsubishi has recently completed its third phase of expansion.
Hubbard did express concern over some aspects of our local economy, including the impact of the sequester, a dysfunctional Congress and the future of military installations that pump about $5 billion a year into our local economy.
“I want to hesitate by saying that a few more disagreements and uncertainty in Washington will dampen those growth prospects very quickly.”
Tourism
Joseph Marinelli, president of Visit Savannah, is optimistic.
“We are projecting a moderate growth in numbers of visitors to the area but a more positive impact on overall visitor spending,” he said.
Marinelli cites a number of factors that figure into his projections. First, tourism numbers for cities along both the East and West coasts of the U.S. continue to experience a strong post-recession rebound.
Closer to home, 2014 will bring the grand openings for the Embassy Suites and Cotton Sail Hotel in the historic district, along with the introduction of the new Kimpton Hotel (The Brice) in the location of what had previously been the Mulberry Inn.
“All three of these properties will help Savannah attract a more discerning traveler, which in turn, will have a positive impact on spending throughout the market,” said Marinelli. “Additionally, a number of new restaurants and retail shops are expected, which not only helps to lure new travelers to town, but gives more reason for folks to extend their stay or come back again for future visits.”
Real estate
Robin B. Lance, who owns Robin Lance Realty in Richmond Hill, is the 2013 president of the Georgia Association of Realtors.
Her comments also reflect cautious optimism.
“The real estate business is showing signs of recovery locally and around the state of Georgia,” said Lance. “We are seeing new listing activity and homes selling in record time.”
Monthly housing statistics from several multiple listings around the state indicate inventory levels are down.
“The average supply of inventory is about 5 to 6 months which is a vast improvement.”
Lance said homes are on the market an average of about 76 days, the lowest it has been in a long while.
“New construction is finally coming back,” she said, “and new home building permits are on the rise.”
Lance noted that local and state Realtor membership is on the rise, an indicator the market is coming back.
“Many agents leave the business when the market is not doing well and return when things begin to show improvement,” she said. “In general, Realtors are encouraged that 2014 will be a year of slow but continued recovery for the real estate market.”
Banking, large and small
Jenny Gentry is Savannah Market President for Wells Fargo Bank and past chair of the Savannah Area Chamber of Commerce.
“I think you’re going to see 2014 look a lot like 2013,” said Gentry. “It doesn’t sound like there’s going to be a lot of movement on interest rates on the banking side, and the mortgage refinance boom is done.”
Gentry cited continuing uncertainty in pending government regulations and what additional costs they will bring with them. She also indicated the uncertainty over the Affordable Care Act (Obamacare) is creating great hesitancy for employers who don’t know what their future costs will be related to employee benefits.
Gentry said she sees bright spots on the horizon with a strong and growing tourism industry and the slow improvement in construction. All of these, she said, impact the banking business.
Holden Hayes, president of Savannah Bank, said his bank expects Savannah’s economy to grow significantly.
“Based on the diversification of our economy, we feel very optimistic about 2014,” he said. “We hear a lot about new companies coming or at least thinking about coming in, thanks to our partners at SEDA. We really feel that Savannah is poised to grow at a greater rate than the majority of the United States economy.”
Insurance
Alan Williams, senior vice president at Bernard Williams Insurance in Savannah, said his company is optimistic about the 2014 economy.
“We think that 2014 will see a slight uptick in overall economic activity,” said Williams. “Last year, 2013, was a relatively strong year for the insurance industry compared to recent years.
“That was due primarily to an uptick in overall economic activity. When businesses are expanding, hiring additional employees, and taking on new projects, that’s a good for the insurance industry.”
Williams said there is one caveat concerning 2014.
“There is still a lot of uncertainty surrounding the implementation of the Affordable Care Act,” said Williams. “That’s kind of the wild card in the equation.”
Energy
Swann Seiler is manager of corporate communications at Georgia Power in Savannah.
“We are very optimistic,” said Seiler. “Georgia Power is fortunate that in this part of that state we continue to see growth in all facets of our business.” According to Seiler, Georgia Power has invested over $350 million in infrastructure projects.
“That is a strong indication of progress in this community,” she said.
Examples Seiler cited were the completion of the underground network in Savannah, the Whitemarsh/Wilmington Island line and current upgrades to lines serving south and west Chatham County.
“All of this is necessary because of the growth of this area and its economy,” she said.
Automotive
Jim Mollica is co-owner with partner Winston Pittman of Chatham Parkway Toyota and three other dealerships in the region.
“Our forecast is somewhere between 8 and 12 percent growth for 2014,” said Mollica.
He said the anticipated increase is based on consumer confidence that the economy will continue to improve in the coming year.
“The manufacturers are always putting out some kind of incentives,” said Mollica. “If they’re going to boost production 8 to 12 percent, you incentivize the product that’s slow.”
Food
Gary McClune owns Ogeechee Meat Market on Ogeechee Road on Savannah’s south side, a small family business that sells premium, fresh-cut meats and other grocery items.
“My personal feeling is that there isn’t going to be an upswing,” McClune said.
He cites increases in the cost of product as seen over the past few months.
“The prices are being driven up dramatically due to increases in cost of fuel and feed,” he said. “Also, many of these beef suppliers have already depleted their herds. I don’t see any breaks, at least for another year, as far as the beef industry goes. I think it’s going to be a tough year.”
Small merchants
Glenn Miller owns Savannah Floor Covering on Bull Street in Savannah.
“I would say we’re expecting a little bit of an uptick.” said Miller. “It’s almost like a pent-up demand. Our business this year has been up, primarily because everything has been so stagnant for so long.
“The demand has just sat there for so long that people finally had to do something.”
Miller said he is not encouraged with what might be happening with the economy overall.
Philanthropy
Gregg Schroeder is president and CEO of the United Way of the Coastal Empire. “I would describe my feelings as cautiously optimistic,” said Schroeder. “We are largely a charity that focuses on workplace giving so we’re heavily dependent on jobs with local employers. My belief is that that will improve modestly over this next year.”
Schroeder said local business leadership has exhibited a historically strong commitment to the United Way and he expects that to continue.
“I don’t think it’s going to be a double-digit increase,” he said, “but we remain cautiously optimistic about giving for next year.”
An economist weighs in
Michael Toma, the Fuller E. Callaway Professor of Economics at Armstrong Atlantic State University and a recognized authority on Savannah’s economic outlook, said he, too, expects overall improvements for 2014.
“A broad array of underlying indicators of current economic activity is improving. This includes tourism, port activity, manufacturing, retail sales, home construction and labor market indicators,” Toma said. “While conditions are improving, a moderate acceleration in growth is expected, not a break-out year of rapid expansion.”