Fourth Quarter Coastal Empire Economic Monitor Released
(March 18, 2013) On the heels of an optimistic third quarter economic outlook, the Savannah area's economy continued to grow in the fourth quarter of 2012, says Armstrong's Coastal Empire Economic Monitor. While the relatively slow nature of that growth dampened some of the third-quarter buoyancy, record tourism activity and strengthening housing market activity powered the economy along as the year closed. Despite the looming threat of the “fiscal cliff” that dominated the end of 2012, consumer confidence was stronger, which also resulted in better gains in the economy. Overall, the Coastal Empire economic index capped off the end of last year with fourth-quarter improvements, and the region is poised to see this continued upswing in economic activity in 2013.
“The tourism industry was responsible for much of the upward lift in the economy, otherwise boosting modest gains and offsetting lackluster activity elsewhere,” explained Michael Toma, director of the Center for Regional Analysis and Armstrong's Fuller E. Callaway professorial chair. “This is further evidence that our regional economy enjoys an enviable foundation in the form of a well diversified structure that affords insulation against weakness in any given sector.”
Highlights of the increases include:
• The coincident economic index increased at a rate of 1.2 percent, bringing the total increases for 2012 to 2.2 percent.
• Tourism gave the index its biggest boost, buttressed by modest growth in employment and retail and electricity sales.
• The fourth quarter gains offset flat performance by the ports.
• The December jobs figure—155,000—was the highest level of recorded employment in the last four years, despite slower hiring at the end of the year.
• Tourism tax revenue hit an all-time high in the last quarter of 2012—hotel and motel tax receipts rose to a total of $1.3 million per month, a gain of 11 percent over the previous quarter and 14.3 percent over the last quarter of 2011.
• The seasonally adjusted number of new residential home permits closed the year out 40 percent higher than the data from one year ago.
• For all of 2012, housing permits were the highest they have been in the area since 2008 and 21 percent higher than 2011.
In sum, while the Coastal Empire coincident index experienced modest gains, the forecasting index also continued its rise, which bodes well for the first three quarters of 2013. The latest Economic Monitor also addresses the “vastly hyped rhetoric” of sequestration and explains that while $85 billion is scheduled for reduction in federal spending, the effects are not as drastic as they may seem. In fact, projected actual budget cuts amount to a roughly 1 percent reduction in federal governmental spending.
Armstrong's Center for Regional Analysis, housed in the university's economics department, meets the applied research needs of Savannah's business and community organizations. Areas of concentrated research include regional economic forecasting, economic impact analysis, economic development and business expansion, tourism development, survey-based research and specialty reports on topics of state, regional and local interest.