Hurricane Matthew’s visit to the Coastal Empire last October put a sizeable dent in the regional economy for the fourth quarter but didn’t completely derail it, according to Armstrong State University’s latest Coastal Empire Economic Monitor, which analyzes data and identifies trends affecting the regional economy.
“We’d been barreling along at around 4- to 5-percent growth in the mid-year quarters last year,” said Michael Toma, director of ASU’s Center for Regional Analysis and author of the quarterly Monitor.
“That slowed to around 1.2 percent in the fourth quarter, most of it either as a direct or indirect result of Matthew,” he said.
“For example, electricity sales were down, which was a result of power outages. Power outages had stores closed for a time, so retail sales were off. The county was under evacuation orders, which closed the airport for a few days, and so on.”
But it could have been so much worse, Toma said, noting that power, for the most part, was restored quickly and those businesses that didn’t sustain damage were able to get back up and running.
One of the most interesting aspects of Matthew was how quickly the hospitality industry bounced back, Toma said.
Bed tax revenues were back on trend almost immediately, he said, noting that the pattern shifted, with the big gains in hotel/motel occupancy along the I-95 corridor near the airport and the 204 Gateway, while Tybee lost about 40 percent and Savannah proper – which housed a lot of essential personnel - was essentially flat.
If you take Matthew out of the equation, Toma said, the regional economy continued to expand.
“The ports reported a record-setting year. The airport, even though they were completely shut down for three days, also had a record-setting year. Tourism still looks good. Employment growth remains healthy, up about 3.5 percent over last year’s numbers.”
In housing, building permits issued were up as compared to the previous quarter when they were down, he said.
“We’ve also seen more stabilization in average value of permits issued,” he said, noting that values shot up to around $250,000 in the second quarter, dropped sharply – to near $200,000 – in the third quarter and now have settled down to a “more realistic $225,000.”
Overall, Toma said, the economic trend for Savannah’s MSA is still pointing to growth.
Factoring Matthew back into the equation, some concerns continue to linger.
“There is still some stress on smaller businesses that didn’t have ample cash reserves to cover their losses for those days,” he said. “Folks who were really counting on that Columbus Day weekend to carry them a bit are likely still hurting.”
The same holds true for workers in the serviced industry.
“They probably took an income hit of about four or five days, which would take some time to overcome,” Toma said
As an adjunct to the Monitor, ASC’s Center for Regional Analysis is preparing a much more comprehensive report on the economic effects of the hurricane, a report that should be completed in the next few weeks.
Looking forward, Toma said he expects to see the economy back in above-average form by the middle of 2017.
“We should see some acceleration in the first quarter, then – by the end of the second quarter or beginning of the third, we should be trending back above normal, which is where we were before the storm hit.”
There’s no doubt Matthew put the brakes on things, he said.
“But we had such momentum going forward that we’re still in good shape.”
ABOUT THE MONITOR
The Coastal Empire Economic Monitor, researched and produced by ASU’s Center for Regional Analysis, presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area. The quarterly report measures the state of the regional economy, based on the analysis of economic data from the U.S. Census Bureau, the U.S. Department of Labor’s Bureau of Labor Statistics, the City of Savannah, Georgia Power and the three counties in the MSA - Chatham, Bryan and Effingham. The Monitor is available free by email. To subscribe, send a request to CRA@armstrong.edu.