Slower growth of the Savannah metro economy is the continuing story for the sixth consecutive quarter. During the opening quarter of 2023, total employment pulled back slightly while port activity notable slowed.
The business forecasting index fell for the third consecutive quarter sending a stronger signal about potential weakness in the Savannah metro economy in 2023. Prospects for 2023, however, remain relatively healthy because of continued growth in the regional logistics industry and its associated real estate development.
On the research and insights platform, Infabode, there have been a number of key trends playing out across global markets. Buzzwords across sectors seem to come from the same place: ‘green’, ‘ESG’, ‘sustainability’ and ‘smart buildings’.
RETAIL TRENDS FORECAST: From COVID to inflation, brick-and-mortar retail faced dramatic pressures in recent years – but the space succeeded in adapting to
new constraints and proving its continued relevance. Now we look at what 2023 may have in store.
REGIONAL ECONOMY SLOWS FURTHER: The Savannah metro economy continued to grow, albeit at a slower and more sustainable pace. While overall employment demonstrated strong growth, important underlying sectors of the economy wavered somewhat.
INDUSTRIAL MARKET REPORT: The rapid growth in goods spending and increased
imports to the fast-growing Port of Savannah has led to record demand for industrial space, pushing the vacancy rate, now at 2.8%, to near record lows.
REGIONAL ECONOMY SLOWS: Growth in the Savannah metro economy moderated during the opening quarter of the year. The broadest indicators of economic activity—overall regional employment and electricity sales to residential, industrial, and commercial users—continue to signal strength.
GLOBAL MARKET TRENDS & PREDICTIONS FOR THE YEAR: In 2021, the state of flux and fluidity that has come to characterize work and life in pandemic times continued. It soon became apparent that our 2020 dreams of a short-lived, swiftly dispatched pandemic were not to be realized.
LOGISTICS MARKET SNAPSHOT: Real gross domestic product (GDP) increased at an annual rate of 2.0% in the third quarter of 2021 (advanced estimate). In the second quarter, real GDP increased 6.7%.
The Savannah metro area surged again during the first quarter of 2021, but growth was more uneven than in the previous quarter. Passenger travel through the airport increased substantially, but hotel room sales remained roughly even. Retail trade picked-up, along with overall employment.
The Savannah metro area economy continued to bounce back during the closing quarter of 2020. Total regional employment rebounded strongly along with continued strength in port activity and logistics, but the tourism industry continues to struggle. High-contact service sector firms remain hobbled by the pandemic while manufacturing steadied.
Savannah Warehouse/Distribution Market Data provided by REIS Real Estate Solutions by Moody Analytics. Key performance indicators, rent and vacancy trends, market inventory and more.
Savannah Retail Market Data provided by REIS Real Estate Solutions by Moody Analytics. Key performance indicators, rent and vacancy trends, market inventory and more.
New industrial supply has outpaced demand over the past few years, a trend that is likely to continue in 2021. And while Savannah’s leasing activity is punching above its weight compared to larger markets, it may not be enough to keep supply-side pressure from softening fundamentals in the market over the next several quarters. Despite the rising vacancy levels, rent growth has remained consistent, a sign that landlords are still bullish on Savannah’s ability to attract large firms and 3PLs.
Vacancies are ticking higher in Savannah with big-box store closures particularly impacting the market. Demand has slowed in Savannah, but the cooling pipeline has helped keep any supply-side pressure at bay. As leasing activity from retailers and restaurants remains meager, landlords have had a more difficult time pushing rents, and annual rent growth has decelerated. With more permanent store and restaurant closures on the horizon, vacancies may continue to rise.
The regional economy will experience sharp contraction in the second quarter, likely extending into the third quarter of 2020. The speed of rebound and recovery will be influenced primarily by how people react to governmental easing of restrictions on business activity. More substantial economic recovery will be delayed until
such time that business owners, employees and consumers develop a greater level of comfort interacting with each other in the public domain.