The Savannah area economy will continue its upward trajectory in 2017 and beyond, according to the Georgia Economic Outlook forecast from the University of Georgia’s Terry College of Business and Armstrong State University’s Center for Regional Analysis.
Savannah’s regional economy — which includes Chatham, Bryan and Effingham counties — has been expanding for nearly seven years, creating 30,000 new jobs along the way, nearly all of them in the private sector, according to Michael J. Toma, Fuller E. Callaway Professor of Economics for ASU.
Since mid-2013, that growth has been substantial, Toma said Wednesday at the Savannah Area Chamber of Commerce’s annual Economic Outlook luncheon at the Savannah International Maritime & Trade Center, where he shared the stage with Benjamin C. Ayers, dean of the Terry College.
“While the pace of expansion is expected to ease modestly this year, the area will still see above-normal growth in 2017,” he said.
Toma attributes much of the region’economic stability and vitality to its underlying diversity.
“For 2017, strength in tourism, port activity and business services should set the stage for growth,” he said, adding that manufacturing will play a lesser role in terms of regional growth, while construction is expected to hold steady.
“While not quite matching 2016’s performance, 2017 will still be a good year for the regional economy.”
Area employment is expected to rise by approximately 3 percent — above the long-term trend rate, but below the 3.5 percent recorded in 2016. Growth for this year remains sustainable, Toma said, because it is broad-based and not reliant upon any one sector of the economy.
“The annual unemployment rate for the Savannah MSA is on track to finish the year at 4.8 percent, while job growth in 2017 should bring that number down to 4.5 percent, he said.
UGA’s Terry College Dean Benjamin C. Ayers was slightly more optimistic, predicting area employment growth closer to last year’s gains, thanks in part to such new or expanding companies as Dorel Home Furnishings Convergys, Floor and Decor, Bram, Caesarstone and Daniel Defense.
Hotel development has been very strong and will continue to be so in 2017, he said. Retirees will continue to be an important force, but Savannah also will benefit from the fact that its population is increasing across all age groups.
The area will also benefit from trends that will buoy the state as a whole, Ayers said, adding that many of the same forces that contributed significantly to Georgia’s growth in the past two years will be even stronger in 2017.
“First, Georgia has even more projects in its economic development pipeline,” he said. “Second, Georgia’s economy will get more leverage from the housing recovery than the national economy. Third, Georgia’s manufacturers will continue to do better than U.S. manufacturers and; finally, Georgia will see faster population growth.”
Thanks to a pro-business political climate that has brought major relocation and expansion projects to the state, Ayers predicts Georgia’s economy will grow 3.2 percent in 2017, more than a half-point higher that nation’s projected 2.6 percent GDP growth, adding that nominal personal income will increase 5 percent.
While the future forecast is predominantly rosy, Ayers cautioned that the state faces some broader economic challenges as well.
“A strong U.S. dollar, weak foreign currencies and Federal Reserve interest-rate hikes will all tap the brakes on economic growth,” he said.