Georgia Southern Q3 2024 Economic Monitor: Hurricanes hurt regional economy, but expansion expected in 2025

The Savannah metro economy contracted modestly during the third quarter of 2024, as reflected in Southern University’s recently released Third Quarter Economic Monitor.

“While Hurricane Debby and Hurricane Helene impacted the regional economy in the fall, they left a noticeable dent in the wings,” said Michael Toma, Ph.D., Fuller E. Callaway Professor of Economics at Georgia Southern. “Growth was mostly on trend in July and August, but the September data reflected the adverse effects of the hurricanes. As a result, the Savannah metro economy contracted modestly during the third quarter of 2024.”

Similarly, he noted, the business outlook index dipped slightly as the labor market absorbed the blows from the hurricanes, but especially from Helene. The regional housing market improved during the quarter, but these gains were offset by labor market disruption. While the forecast index has given up some ground, this is a unique hurricane-related effect. The index is expected to continue its moderate upward trajectory in the final quarter of the year.

“The passage of the hurricanes, by temporarily disrupting the labor market, interrupted a generally favorable trend in the forecast index,” Toma said. “This quarter’s decline in the forecast index is a one-off impact and is not likely to change the forecast trajectory of modest sustained growth in the region. By mid-2025, the Savannah metro economy is expected to expand at a rate of 2%.

Employment trends

Metro Savannah employers added 600 workers during the quarter, bringing the total number of employees to 207,800. In the services sector, employment gains of about 300 jobs each in logistics, tourism, government and education and health were partially offset by slippages in business and professional services (-700). Over the past two years, the decline in business and professional services primarily reflects a reduction in employment in temporary help agencies (-2,700 jobs), with those workers likely moving to non-temp jobs, given expanding the regional employment base. Overall, the services sector added 900 jobs in the third quarter.

Hurricane Debby in August and Hurricane Helene in September reduced activity in the regional hospitality industry. Hotel and motel tax receipts collected for September were equal to those collected last September, even though the excise tax rate increased by a third from 6 percent to 8 percent in the city of Savannah. Hurricane Debby affected August collections, while Hurricane Helene effectively reduced any growth for September 2024.

As seasonally adjusted hotel and motel charges fell 8.5% from the previous quarter, airport boardings also fell 5%. At the same time, the passage of the hurricanes also affected retail sales, which decreased slightly. However, the leisure and hospitality sector added 300 workers during the quarter, providing work for 27,600 employees.

Port activity maintained its long-term upward trend during the quarter. The number of containers handled at Georgia Ports Authority facilities rose 1 percent to 13.1 percent more than a year ago. The regional logistics sector added 300 jobs during the quarter and now employs 19,100 workers, slightly above the level of the previous 12 months.

The goods-producing side of the economy added about 200 people, rising to 33,200 workers during the quarter. Construction employment added 200 workers to 10,700. Construction employment is at a 25-year high, surpassing levels during the superheated housing boom before the Great Recession. However, the construction portfolio is much more diversified than at this time in 2007. Manufacturing employment has held steady at 22,500 workers and remains 4.6% higher than a year ago, more than double the regional employment growth rate.

Private sector wages, adjusted for inflation, fell 1.9 percent to $25.27 from $25.77 an hour during the quarter. Although lower than the previous quarter, year-over-year wage gains remain higher at 2.7%. However, the hurricanes likely cut about 24 minutes off the length of the private sector work week to 30.5 hours, as temporary power outages briefly closed the doors of some local businesses.

Regional Labor Market

In the labor market, Hurricane Helene likely caused a 6.1% increase in monthly initial jobless claims to 731 from 689 in the previous quarter. This partially reversed the 9% decline in the second quarter. In response, the regional unemployment rate rose to 3.2 percent from 3 percent in the previous quarter.

Housing Market

The monthly seasonally adjusted issuance of building permits for single-family homes increased significantly by 12.3% to 711 permits from 633. This is a much larger change than the previous quarter’s weakness, while also increasing year-over-year gain at 10.3%. Additionally, the median value for a single-family building permit issued increased 3.5 percent to $261,700 from $253,000 (building permit value does not include land cost).

An analyst’s note

The Economic Monitor is available by email and on the website of the Georgia Southern Center for Business Analysis and Economic Research. If you would like to receive the Monitor by email, send a “subscribe” message to (email protected).

About Indicators

The Economic Monitor provides a continuously updated quarterly snapshot of the economy of the Savannah Metropolitan Statistical Area, including Georgia’s Bryan, Chatham and Effingham counties. The coincident index measures the current economic pace of the region. The main index is designed to provide a short-term forecast of the region’s economic activity over the next six to nine months.

Georgia Southern University, a public Carnegie Doctoral/R2 institution established in 1906, offers approximately 140 different degree programs serving more than 25,500 students through 10 colleges on three campuses in Statesboro, Savannah, Hinesville, and online instruction. A leader in higher education in Southeast Georgia with expert faculty, the University focuses on public impact research and engaging learning opportunities through knowledge and know-how that prepare our students to take ownership of their lives, careers and communities. Visit GeorgiaSouthern.edu.