Economic Monitor for 2nd Quarter Now Available
(September 11, 2011) The Coastal Empire Economic Monitor for the second quarter of 2011 shows that the regional economy continued to follow a pattern of slow growth for the sixth consecutive quarter, but the pace dipped in the second quarter of this year reflecting the nationwide slowdown in economic growth. The Coastal Empire coincident economic index increased four-tenths of one percent, representing a slight easing of the nearly one percent growth in the first quarter. A drop in retail sales and electricity sales contributed to the slowdown. The report is now available at http://www.econ.armstrong.edu/cra/monitor.htm.
At the same time, strength in port activity helped to drive a private sector gain of 700 jobs in the areas of transportation, business/professional services and miscellaneous services. In contrast, public sector employment was flat with no growth at the local, regional or state level.
The tourism industry continues to be a mainstay of support for the regional economy with hotel room rental taxes increasing 7 percent from the first quarter, while hotel sales revenue hit a record high through the first half of the year. This is consistent with increased tax receipts from rental cars, alcohol sales and preservation fees charged to visitors on tours around the city. On a side note that further speaks to the impact of tourism on the region, a recently commissioned study released by VisitSavannah reports that the city hosted 11.4 million visitors who spent approximately $1.7 billion in 2010.
Looking ahead, the leading economic index showed a significant improvement of 2.1 percent during the second quarter, a sign of consolidation and extension of modest improvements in the forecasting index in the past nine months. “The forecasting index is pointing toward more apparent improvement in economic conditions in early 2012, while the remainder of 2011 should feel modestly better than the year's first half,” said Michael Toma, director of Armstrong's Center for Regional Analysis, which publishes the Economic Monitor.
“The forecasting index has been gathering momentum during the previous three quarters and this quarter's increase was the most powerful in nearly two years,” Toma added.
And while the seasonally adjusted number of new residential homes permitted for construction fell by 4 percent, the number is 20 percent higher than year-ago data. The average value of a residential building permit issued rose by 26 percent to $159,400, offsetting an anomalous reading in the first quarter and returning the average value to more current levels.
“Economic growth in the remainder of 2011 will not be particularly impressive, but should outpace growth in the first half of the year. The current expectation is that conditions will show more improvement in early 2012,” Toma said.