Michael Toma

Armstrong Economic Monitor: Slow growth continues

(May 15, 2011) The Armstrong Atlantic State University Coastal Empire Economic Monitor for the first quarter of 2011 is now available online at http://www.econ.armstrong.edu/cra/monitor.htm.

The regional economy continued its slow, steady growth for the fifth consecutive quarter with a slight increase in the pace of expansion taking place in the first quarter of 2011. Overall, the recovery continues, although at a very modest rate. Slight improvements in new home building, the labor market and brighter consumer expectations nudged the leading economic index, pointing to continued modest growth through 2011.

“The index increased three-tenths of one percent in the opening quarter,” said Michael Toma, director of Armstrong's Center for Regional Analysis, which publishes the Economic Monitor. “The previous two quarters have shown upward movement with improved consumer expectations and modest improvements in labor market conditions leading to the rise.”

At the same time, electricity sales, a broad indicator of residential, commercial and industrial activity, and port activity combined to provide a lift to the coincident economic index, which rose nine-tenths of one percent to 150.3.

Regionally, the service sector accounted for all new jobs during the first quarter, with seasonally adjusted employment picking up 300 additional workers, for a total of 149,800, including 5,800 construction jobs. That compares to a high of 10,200 construction jobs at the peak of the building boom in 2007.

Leading indicators from the regional labor market continue to send mixed signals. Help wanted ads decreased by 2.4 percent, as compared to last quarter, but remain 15 percent above the recessionary low in 2009.

At the national level, the economy continued a period of slow growth at an annualized rate of 1.8 percent during the first quarter, down from 3.1 percent at the close of 2010. Slowing consumer spending, due to rising gasoline and food prices, accounted for most of the slowdown.

“The regional economy, based on the signals from the forecasting index, will continue to grow at a slow and steady pace through 2011,” said Toma. “As indicated in the previous Economic Monitor report, the realization of new jobs from previous year announcements by area manufacturers is vital for the health of the economy this year. Manufacturing and continued vitality in tourism and port activity are expected to be the economic drivers in 2011.”

The Economic Monitor presents quarterly economic trends and short-term economic forecasts for Savannah's Metropolitan Statistical Area (MSA). The quarterly report measures the heartbeat of the local 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 report presents a short-term forecast of the region's economic activity in the next six to nine months. The Economic Monitor is available free by electronic mail. To subscribe, email .(JavaScript must be enabled to view this email address) and write “subscribe.”