Economic Monitor: Savannah on ‘Remarkable Path of Rebound Growth’
The southern port city of Savannah, Georgia, is maintaining a “remarkable path of rebound growth” as 2022 begins, with “all major indicators of regional economic activity increas[ing],” according to Georgia Southern University’s Fuller E. Callaway professor of economics Michael Toma. Toma and other analysts contribute to the institution’s Economic Monitor, the latest issue of which reflects Q4 2021. Toma and his team concluded in their report, “The story of the fourth quarter is one of general economic strength across broad swaths of the regional economy. Port activity, logistics, tourism, retail sales, and electricity sales buoyed the index of current economic activity.”
With regional employment presently 3 percent higher than pre-pandemic levels and tourism- and hospitality-employment returning to “normal” by the end of 2021, the biggest issue for Savannah in 2022 will likely be geopolitical factors that could influence inflation and the amount of capital that visitors to the city have to spend. Fortunately, this city is not wholly reliant on tourism although the sector does play a big role in the local economy. Savannah is also home to the Port of Savannah, the single largest and fastest-growing container terminal in America and a network of “dry ports” that facilitate shipping and commerce by making it possible to move large carriers through the Savannah facilities quickly without holding up the supply chain.
Toma noted Savannah’s goods-producing sector is at 98 percent of pre-pandemic productivity and construction employment in the area is holding steady, unlike in other areas of the country where labor in this sector is nearly impossible to find. Although the labor market is tight when it comes to construction, working with experienced and established Savannah investors and investment firms can be an effective way to circumvent delays associated with labor and supply shortages and inspection- and code-related delays.
Toma and his team warned that the biggest issue for the Savannah economy in 2022, as with other economies nationwide, will be inflation. However, given that Savannah and the southeast more generally tend to have a cost of living that is below the national average and significantly lower than other comparable metro areas around the country, the city is likely to continue to benefit from relatively low expenses for individual households and businesses that will keep demand for the city’s hospitality industry and commercial space high.
The report concluded, “Near-term (six months) prospects for growth in the Savannah metro economy are favorable but remain modest…. Future gains will depend, in part, on increased travel to Savannah and the continued recovery of jobs in the hospitality sector.”