Last Tuesday, I focused on ways in which the Obama administration and the federal government could have softened the impact of the housing bust.
That bust is at the heart of the Savannah metro area economy’s ongoing woes.
As regular readers probably know, I took a lot of flak back in 2008 for predicting a prolonged slowdown in new construction and a steep decline in local home prices.
I wish I had been wrong. And I wish I could take credit for having some extra special analytical skills.
But the simple truth is that anyone taking a close, unbiased look at the numbers would have arrived at the same conclusion. The slow growth we’ve had the last three years has been close to a best-case scenario given the depth of the financial crisis and housing bust.
So, here on the cusp of a presidential election, can we make predictions about the local economy for the next four years?
The latest employment estimates are extremely encouraging. We could finally be seeing a virtuous circle taking hold, with good economic news spawning more good news.
The Georgia Department of Labor estimates that the Savannah area labor force expanded by a healthy 2.6 percent over the past year. Even better, we saw an annual jump of 4.0 percent in the estimate of area residents who are employed.
In writing about some good signs a few months ago, I noted that much of the improvement in employment appeared to be within the city of Savannah. The latest data show continued gains in the city limits and also solid gains throughout the metro area (Chatham, Effingham and Bryan counties).
With so many significant projects in the works, it’s reasonable to expect the local employment situation to continue to improve through 2013.
Tourism has rebounded strongly from its recession lows, and other sectors are looking good too. New home construction and home prices may never reach the dizzying highs of a few years ago, but both appear to have bottomed.
Whoever wins the presidential election next week will have to deal with some long-term deficit and debt issues. That will almost certainly cause a drag on the local economy.
The expiration of the payroll tax cut, which seems likely under either an Obama or Romney administration, will hurt local spending.
And of course the Savannah economy will be impacted by world events — the recession in Europe, uncertainty in China, the likelihood of occasional spikes in gas prices.
It’s also entirely possible that the ordinary business cycle will bring us another recession — let’s hope a shallow one — before 2016.
But there are a lot of reasons for optimism about the local economy, regardless of who is elected president next week.
City Talk appears every Sunday and Tuesday. Bill Dawers can be reached via billdawers@comcast.net and http://www.billdawers.com. Send mail to 10 East 32nd St., Savannah, GA 31401.