A healthy increase in economic activity for the second quarter in a row has prompted local economist Michael Toma to forecast continued improvement for the Savannah metro area through the middle of 2013.
Nearly across-the-board employment gains, coupled with tourism growth and solid port activity propelled the economy in the third quarter, according to Toma’s Economic Monitor.
The Monitor, prepared quarterly by the Armstrong Atlantic State University Center for Regional Analysis, which Toma directs, was released Dec 2.
The coincident index — which measures the current heartbeat of the region — grew a healthy 1.25 percent, Toma said. In addition to the coincident index, the leading index, which offers a short-term forecast of the region’s economic activity for the next six to nine months — rose 1.4 percent, capping the fastest three-quarter pace of improvement in three years.
Employment gains took center stage in the third quarter.
“Employers in the region went on a hiring binge during the third quarter, adding 3,100 jobs and raising total employment in the metro area to a seasonally adjusted 153,800,” Toma said.
The gains were on the service side of the economy, he said, with the health/education sector adding 1,000 jobs and leisure/hospitality up 800, while business/professional services and retail sales each added 500 jobs.
The growth was almost entirely on the private side of the economy, with nearly every major sector expanding its workforce, Toma said.
Government employment held steady during the quarter, while the goods-producing side of the economy treaded water, holding at 20,200 workers. Manufacturing added 100 workers, growing to 14,600, while construction lost 100 jobs, falling to 5,600.
“Jobs are definitely the big story this quarter,” Toma said. “A growth of nearly 2 percent in one quarter is really significant.”
While that would annualize to somewhere around 8 percent a year, Toma did not anticipate that growth rate holding steady.
“Basically, I think much of the restraint in hiring earlier this year was unleashed in the third quarter,” he said. “I don’t anticipate a jump as substantial as 2 percent every quarter. Instead, I think we’re moving into a different growth cycle, where we’ll see 1- to 2-percent growth a year, rather than zero to a half-percent.”
Tourism also continued its solid run through the year, with hotel/motel tax receipts up 4 percent for the quarter, running 7-percent ahead of 2011’s year-to-date pace.
Employment in the hospitality sector increased to 20,800 workers and ridership on the trolleys and tour buses is up 6 percent from last year.
Improving labor market conditions and substantial growth in residential home-building permits provided the lift for Toma’s short-term forecast.
“The seasonally adjusted number of new residential homes permitted for construction increased sharply, rising 34 percent over the previous quarter,” he said, adding that the 295 permits issued represented the highest quarterly total in four years.
“Permit issuance is 15 percent over last year’s pace and is on track for 2012 to be the best year since 2008.”