The Savannah region has become synonymous with economic growth, but its recent run of forward progress in economic activity has come to a halt.
The regional business index, consisting of Chatham, Bryan and Effingham counties, decreased .6% in Q2, according to the latest Coastal Empire Economic Monitor by Georgia Southern University.
“One can safely say that the forward momentum in our regional economy was lost,” said Michael Toma,
Multiple indicators of economic activity decreased during the quarter including consumer spending and imports at the Georgia Ports Authority in June and July, both of which paired with moderate job losses in multiple sectors.
Total job loss was 500 in Q2, led by a loss of 400 jobs in the service sector and 300 jobs in the logistics sector. Another 100 were lost in the goods-producing sector, with dips in construction and manufacturing. Those losses were offset slightly by a gain of 300 jobs in the retail and education/health sectors.
Toma likened the softening in the regional economy to a braking effect, opposed to sharp, sudden declines in economic activity as seen in the Great Recession. Impacts from President Donald Trump’s tariff policies and broader economic uncertainty among consumers are driving factors, Toma said.
“We see this braking effect and slowing effect that begins to emerge in the first quarter of the year and then becomes more prominent in the second quarter of the year,” Toma said.
The Q1 economic monitor showed signs of the regional economy’s growth slowing, but it did not hit the point of decline yet. Trump’s hallmark trade policy—the “Liberation Day” tariffs—came in April.
Toma said the softening reflected more concrete plans for trade policy forming during the first quarter while the impacts were still uncertain. Some of those impacts showed in the Q2 data, he said.
But beyond global trade, one of the clearest signs consumers may be hunkering down is in the visitor economy.
Key metrics within the local hotel market have dipped this year amid economic uncertainty, according to reporting by the Savannah Morning News. Those trends paired well with other data from the monitor, which showed hotel-motel tax revenues declined 4.5% in Q2.
“When households are uncertain about their future prospects, as well as businesses being uncertain about their future prospects, they are less likely to engage in very active economic activity,” Toma said. “In some senses, they start to hunker down and wait out the new uncertainty and see where it leads.”
The latest quarter, Q3, also brought the closing of International Paper’s Savannah mill. The plant shuttered at the end of September, impacting 800 jobs in Savannah. Another 300 jobs were impacted by IP’s closing its Riceboro mill in Liberty County.
But those job losses are not yet seen in the economic data, and Toma said he expects those impacts to be seen in the upcoming quarter’s monitor. As for the rest of the year across the region, the slowing may continue at its moderate pace.
“I think the fourth quarter is still going to be a period of uncertainty and below trend economic growth,” Toma said.
Evan Lasseter is the City of Savannah and Chatham County government reporter. You can reach him at ELasseter@savannahnow.com.