The Savannah economy sputtered along in the second quarter of this year, coming in flat compared to the first quarter’s .03% growth, according to the latest Coastal Empire Economic Monitor by Georgia Southern University.
“The big picture at this point is we have minimal growth in the regional economy,” said GSU’s Fuller E. Callaway Professor of Economics Michael Toma.
The regional economy mirrors the state of the U.S. economy in what can be described as a “no hire, no fire” situation, Toma said. That trend regionally is seen in the latest labor statistics.
Employment growth in the region was “very weak” in Q2, Toma said, increasing only .2%. But despite weak employment
growth the labor market remains tight, showcased by a .3% drop in the regional unemployment rate to 2.7%.
That decline dropped the unemployment rate below its three-and-a-half-year average of 3%. Similarly, new claims for unemployment are at a six or seven year low, Toma said.
People filing unemployment claims are likely being reabsorbed into the labor force quickly, a trend indicated by the declining unemployment rate, Toma added. The decline in the unemployment rate was also somewhat surprising to Toma, he said.
“It’s somewhat unusual in the sense we are seeing very little overall growth in the economy, but the labor market remains pretty strong in terms of its foundation,” Toma said.
Toma described the marginal job growth as “very muddled” across the regional economy on a quarter-to-quarter basis, with no one sector shedding a lot of jobs compared to others. In Q2, the job growth was concentrated in the leisure and hospitality sectors, which added 600 jobs, and the local government sector, which added 200 jobs.
Growth in the hospitality and leisure sectors came despite some broader challenges in the regional tourism economy. Local hotel/motel tax revenues were down 2.8% during the quarter, although they maintained 4.9% year-over-year growth.
Boardings at the airport also declined for the second consecutive quarter. Toma said the increase in jobs despite sector-wide challenges represented recovery of industry job loss in previous quarters.
Meanwhile, the industry’s broader headwinds are indicative of the modest economic growth and other national trends. For example, the cost of goods such as groceries and gasoline are up and tightening household budgets, Toma said.
“If costs are up, and if people are concerned about losing a job they may have, it’s typically the tourism budget that is curtailed initially,” he said.
The regional economy was forecasted at the year’s beginning to outpace the U.S. economy in its growth. Toma said through the first half of the year the regional economy has grown at roughly the same rate as the national economy.
Still, the regional manufacturing and logistics sectors continue to outpace their national counterparts in growth, with port activity on a “notable upward trend” dating back to late 2025, according to the monitor. Toma has frequently referred to the local manufacturing and logistics sectors as two “overlays” anchoring the Savannah area economy.
Amid Q2’s modest gains, the monitor’s forecasting index foreshadowed continued slowdown through the end of the year. Toma expects growth to be between .5% and 1% through the year, down slightly from the region’s typical 2% to 2.3% growth.
“I just don’t see a lot of dissipation in some of the factors that are creating the uncertainty at the national level and the regional level,” Toma said.
Evan Lasseter is the City of Savannah and Chatham County government reporter for the Savannah Morning News. You can reach him at ELasseter@savannahnow.com. Visual journalist Richard Burkhart contributed reporting.
This article originally appeared on Savannah Morning News: Savannah area economy continues muted growth | Exclusive
