From small business loans to employment levels and occupancy rates, Savannah’s small business economy is wrapping up one of the strongest years on record according to area industry experts.
“We have a favorable business climate right now for small businesses with the underlying growth that we have in our economy, we have a very diverse economy with a very healthy tourism industry and a healthy film industry and all these create opportunities for small businesses in our county,” Armstrong State University economist Michael Toma reported during the fifth annual State of Small Business, which was sponsored by Savannah SCORE and held at Bethesda Academy on Friday.
Toma, who spoke alongside 10 other area industry experts, also reported that small businesses with 50 or fewer employees account for about 40 percent of all workers across the region and those businesses are responsible for half of all employment growth.
From first quarter of 2016 to the first quarter of 2017 those same small businesses increased their employment by 2.6 percent or 1,500 workers, outpacing county-wide employment growth of 2 percent over that same period of time.
“So small businesses really have been taking a leadership role in a sense of creating new jobs and opportunities for individuals in our regional economy,” he said.
“These small businesses are doing well; they’re doing what we hoped they would do. They’re starting small and growing, getting bigger and graduating into big businesses here in Chatham County.”
State officials reported that metro Savannah’s economy and employment outlook remain healthy from a broader level.
Despite the effects of Hurricane Irma in September, the number of employed residents increased by 2,359 totaling 201,992 an increase of 8,506 employed residents since this time a year ago. Unemployment claims were down 26.2 percent to 1,130 indicating that the region continues to head in the right direction, according to Faith Copeland-Pittman a Business Services Recruiter with the Georgia Department of Labor.
“… It’s not only a beautiful day in Savannah, but it’s a great time to live, work and invest in the Savannah economy,” she said.
The September unemployment rate of 4.8 percent was down from 5.5 percent in August and down from 6.4 percent September 2016 and the growth, according to Pittman can be attributed to several factors.
“The number of residents entering the workforce and those available to work,” she said.
“The financial picture is looking great and things like the stock market doing well all have an effect.”
Across the state over the past 12 months more than 87,000 jobs have been added to the economy, which is a 2 percent growth rate, out-pacing the nation’s job growth rate of 1.4 percent.
The city’s film industry continues to be one of the fastest growing sectors bringing in $38.5 million in economic impact in 2014 to more than $130 million in 2016 and according to Savannah attorney Charles Bowen, who focuses on commercial and entertainment law we can expect more growth in 2018.
“The entertainment industry is clean, it provides thousands of great paying jobs for laborers, which make up a huge percentage of Savannah’s population that fall below the poverty line and the overall economic impact in the Savannah area in 2016 was over $130 million and that benefited almost every industry in the city,” he said.
Bowen also reported that due to the number of productions in Georgia the state currently ranks number one in the world for the number of productions and statewide the industry contributed than $2 billion to the economy.
While the local industry has fared well, one obstacle holding Savannah back continues to be the absence of sound stages, Bowen said.
“Savannah has hit capacity with the number of films that can film here,” he said.
“… That’s what’s keeping Savannah from reaching its full potential. No other industry has the growth potential of the entertainment industry.”
Looking ahead to 2018 Bowen said more productions have already committed to filming in Savannah in 2018 than in any previous year.
“If we can couple our region’s beauty, our region’s resources with the right infrastructure of local government involvement and support Savannah could literally become the single most sought after film destination in the world,” he said.
Tourism Leadership Council president and CEO Michael Owens reported that visitor spending in the tourism and hospitality industry, which often overlaps with the entertainment sector befitting from productions in various ways, brought in more than $2 billion in 2016, which is up 11 percent from 2014 and four percent from 2015.
“When you think of the industry you think of big or chain hotels, but it’s important to note that there are only two corporate hotels in Savannah, the Westin and the Brice. Everything else is locally owned,” he said.
Retail spending from visitors topped more than $4 million in 2016 and Owens said it’s important to remember that the majority of that money is not going to big box stores, but to locally owned shops where visitors can find unique and handcrafted items.
“What we do know is that our visitors are spending more than they were five years ago. … This is a great opportunity for small businesses to offer something unique. People coming to Savannah aren’t interested in Wal-Mart or Target, they want something that’s uniquely Savannah, something that’s handcrafted.”
Highlights from 2017 State of Small Business
The full report from the 2017 State of Small Business will be available at www.savannah.score.org later this month.
Trends in Small Business Employment
• The small business gain in employment was slightly above the average gain in employment for all businesses in Chatham County.
• The majority of gains were made with small businesses that have between 20 and 50 employees
• The smallest businesses with fewer than five employees declined by 10 percent
Georgia department of Labor Metro employment
• Unemployment is down
• The September unemployment rate is 4.8 percent, down from 5.5 percent in August
• Georgia broke the 4.5 million job barrier – 2 percent growth rate in Georgia, outpacing nationally.
• Metro Savannah gained 4300 jobs, a 2.5 percent growth rate
• Industrial Real Estate, occupancy levels are at an all-time high. In 2010 rates were at 18.57 percent and in 2017 rates hit a low of only 1.22 percent vacancy.
• Office vacancy in 2010 was at 19.6 percent and in 2017 it is at 11.4 percent.
• In 2012 the vacancy retail rate was 4.9 percent and in 2017 it dropped to 3.6 percent vacant
Commercial construction permits
• Construction costs values hit a record high in 2016 at $574 million, which was a 42 percent increase from the $404 million in 2015. Construction cost values in 2017 dropped to $281 million.
Film and entertainment
• More productions have already committed to filming in Savannah in 2018 than in any previous year
• The primary hindrance to continued growth is that Savannah has reached capacity. Until additional infrastructure is built, the industry will be unable to reach its full potential in Savannah
• Television production went from about 1 million in 2011, to 33 million in 2016
• In the past three years, the total local economic impact of film and television productions grew from $38 million in 2014 to $130 million in 2016.
Georgia Ports Authority
• Total tonnage at all the Georgia Ports Authority has grown by 8.3 percent
• An additional $128 million mega-rail track on terminal will allow the GPA to better handle 10,000-foot long unit trains. More efficient rail offerings will position Savannah to rapidly increase service to an arc of inland markets, from Atlanta to Memphis, St. Louis, Chicago and the Ohio Valley.
• The Port of Savannah has 10 Super Post-Panamax ship-to-shore cranes on order, for a total of 36 cranes. Four will arrive in 2018, and the final six by 2020. Having 36 cranes on dock will allow Garden City Terminal to move 1,300 containers per hour on and off vessels.
• The GPA broke ground on the Appalachian Regional Port, an inland rail yard in Chatsworth, Ga., in FY2017. Its completion in the fall of 2018 will cut Atlanta truck traffic by 50,000 trips per year, and expand GPA’s reach into Tennessee, Northeast Alabama and parts of Kentucky.
• In the last five years, spending has increased 34 percent while visitation has increased only 12 percent, indicating that per visitor spending is on the rise.
• An increase in commercial investments over the next 36 months will lead to a serious increase in demand for workforce
• In 2012 there were 12.4 million visitors, in 2016 there were 13.9 million. In 2012 they spent $2 billion, and in 2016 they spent $2.8 billion.
Small Business Assistance Corporation Loans
• In 2016, the Small Business Assistance Corporation approved $16 million in loans. In 2017 that number increased by $20 million to $36 million in loans approved.
• Approved loans in 2017 are projected to develop over 300 employment opportunities
• Thirty-four percent of loans approved in 2017 were for new businesses
• Savannah Chatham County Public School System’s current graduation rate is 84.3 percent, which is higher than the state average three years in a row. In 2012 less than 65 percent of students graduated.
• Class of 2017: Over 2000 graduates were in the 2016-2017 school year for the first time in the history of the district.
Savannah Economic Development Authority
• Area investments brought in $279 million in 2016 and more than $430 million this year.
• SEDA was involved in 80 major projects in 2016 and 63 in 2017.
• Prospect site visits increased to 56 in 2017 from 50 in 2016