So what are the prospects for the Savannah area economy in 2015?
It looks like there are lots of green lights ahead.
The leading index of the Coastal Empire Economic Monitor published by the Center for Regional Analysis at Armstrong State University shows solid growth into the middle of next year, and I’m betting data for the fourth quarter will indicate growth even deeper into 2015.
The latest employment data are certainly encouraging.
In November, the number of initial claims for unemployment insurance in the Savannah metro area (Chatham, Bryan and Effingham counties) was down sharply from a year earlier.
The number of nonagricultural payroll jobs in the metro area increased by 2.6 percent between November 2013 and November 2014. Private sector payroll employment increased by 2.8 percent.
Still, we continue to see stagnation in manufacturing employment. Construction employment might now be rebounding but remains far below the pre-recession peak.
In other words, we’re seeing strong job growth even with continued weakness in a couple of key sectors.
We still have a long way to go to make up for all the lost ground of the recession, but the metro area unemployment rate fell from 6.7 percent in November 2013 to 6.1 percent in 2014. I am anticipating a faster decline in 2015.
Statewide, we’ve seen strong job growth over the past year, but the improvements have been concentrated in the Atlanta, Augusta, Gainesville and Savannah metro areas. The numbers are still dismal across much of the state, and it’s hard to be optimistic about the economic future
of Georgia’s rural areas.
According to Zillow, the median home value in the Savannah metro area has increased 5.8 percent over the past year, but many households are still digging out of the deep hole of the recession. In the city of Savannah, almost 24 percent of mortgage holders still owe more than their homes are worth, but things are headed in the right direction.
There are obviously all sorts of downside risks, but it’s likely that in 2015 we’ll see growth in major sectors, including port traffic, tourism, medical expenditures, housing starts, airport traffic, retail sales and tax revenues.
As the housing market continues to improve across the country and as growing numbers of baby boomers enter retirement, we might also be poised for a new wave of in-migration.
There are definitely some weak spots in the local economy, but there is a lot of room for optimism in 2015.
City Talk appears every Sunday and Tuesday. Bill Dawers can be reached via billdawers@comcast.net. Send mail to 10 E. 32nd St., Savannah, GA 31401.