In the latest report from Georgia Southern University regarding the Savannah metro area’s economic performance, the data for the first half of 2025 paints a picture of a cooling economy. The combined analysis of Q1 and Q2 Economic Monitors indicates that various factors, especially related to consumer spending, port activity, and labor market trends, show the region is trending below its long-term economic growth trajectory.
### Key Indicators Highlighting Economic Cooling
According to Michael Toma, Ph.D., and the Fuller E. Callaway Professor of Economics at Georgia Southern, the Savannah economy is experiencing a noteworthy slowdown. The business index for Savannah saw modest growth of 0.3% in Q1, which equated to an annualized increase of 1.1%. However, this shifted dramatically in Q2, where the index fell by 0.6%, representing a -2.2% annualized decline. This indicates a potential reversal in economic momentum that may require attention from stakeholders in the region.
One of the warning signals was the drop in total employment. A loss of 500 jobs in both Q1 and Q2 resulted in an overall reduction of 1,000 jobs by the end of the first half of 2025, resulting in a total employment figure of 201,100. While sectors such as leisure and hospitality and local government saw slight increases, the losses in professional and business services, transportation, and utilities significantly offset those gains.
### Spending, Tourism, and Port Activity Dynamics
Consumer behavior also seems to have turned cautious, as retail sales slid by 2.2% in Q1 and saw a further decrease of 0.4% in Q2. Comparatively, these figures showed a 2.1% rise over the same period last year, suggesting that while overall spending remains above previous levels, the trajectory is downward as of 2025.
Tourism metrics present a mixed picture. In Q1, hotel/motel taxes fell by 0.5%, alongside a notable 5.7% reduction in airport boardings. However, signs of recovery appeared in Q2 with airport boardings increasing by 3% and notable boosts in auto rentals and alcohol-related tax revenues. Despite these, hotel/motel tax collections still declined by 4.5%, indicating challenges in the hospitality sector.
Port activity, a vital element for Savannah’s economy, was affected by turbulence in international trade originating from U.S. trade policies. A 1.2% decline in shipping container units was observed in Q1, reflecting how businesses rushed to adjust before anticipated import tariffs rose in Q2. By the end of Q2, the situation moderately improved, with only a 0.6% drop, but the overall volume was still up by 9% compared to 2024 figures. Nonetheless, the logistics sector suffered job losses, shedding 800 jobs across the first half of the year.
### Housing Market and Wage Trends
The housing market displayed mixed signals. While single-family building permits increased by 1% in Q1—with a robust 20% year-over-year gain—the subsequent quarter saw a sharp contraction. Permit issuance decreased by 12.6%, accompanied by a decline in permit values by 3.5%. This could suggest a cooling in real estate activities, which often reflects broader economic sentiment.
Wage growth in the private sector, reported in inflation-adjusted 2024 dollars, showed a healthier trend. There was a 3.5% increase in Q1, bringing wages to $28.76 per hour, followed by a subsequent rise of 2.9% in Q2, raising wages to $29.61 per hour. This represents a silver lining amidst the otherwise damp economic outlook, as the labor market remains a point of strength.
### Unemployment Trends
The unemployment rate fluctuated slightly, moving from 2.9% in Q4 2024 to 3.2% in Q1, before returning to 2.9% in Q2. Initial unemployment insurance claims rose by 3.7% in Q1 but dropped by 8.2% in Q2, showing some resiliency in the labor market despite the overall job losses.
As the outlook for the Savannah metropolitan economy unfolds, Dr. Toma emphasizes that growth is likely to remain below its long-term trajectory through the remainder of 2025. Heightened uncertainty regarding U.S. economic policies and the emergence of tariff-related price adjustments will continue to serve as drag factors for both national and regional economic growth.
### Conclusion: Navigating Economic Challenges Ahead
The data from Georgia Southern University indicates that the Savannah metro economy is facing genuine challenges as it navigates cooling indicators in various sectors. From slowing consumer spending and mixed tourism results to declines in port activity and job losses, these challenges require careful analysis and strategic planning. Stakeholders—including policymakers, business owners, and economic developers—must work together to address these issues while recognizing the strengths within the labor market and wage growth.
Georgia Southern University’s ongoing research not only serves to inform local stakeholders but also provides potential pathways for enhancing economic resilience in Savannah. For more information on the Savannah metro economy and further economic research, interested parties can visit Georgia Southern University’s dedicated pages.
By maintaining an objective and sincere approach, this report aims to illuminate key findings and trends that will shape Savannah’s economic narrative in the months and years to come.
Source link
