Economic growth in the Savannah metro area economy slowed substantially in the first quarter of 2026, according to Georgia Southern University’s newly released Q1 2026 Economic Monitor. 

“The indicators of current economic activity were mixed, with increases in hotel room revenue and port activity, while retail trade and airport boardings dipped,” said Michael Toma, Ph.D., Georgia Southern’s Fuller E. Callaway Professor of Economics. “Further, overall employment in the Savannah metro area registered weak gains. The regional economy effectively slowed to a crawl in the first quarter.”       

Toma also noted that the regional business forecasting index declined modestly for the fourth consecutive quarter. Housing market indicators were mixed, while there was a notable increase in the number of newly unemployed people. On the other hand, he said, the unemployment rate remains at 3%, which is the average since fall 2021.                           

Regional Economic Growth Slowing

The business index for the Savannah metro economy experienced minimal growth of 0.03% in the opening quarter of 2026. 

Employment Sector 

Overall, employment increased by 300 jobs during the first quarter to 216,000. This is 1.7% higher than employment a year ago.

The service sector job gains totaled 600 workers, with increases of 200 workers each in local government and the combined education and health divisions. Modest gains or losses of 100 jobs were recorded in other service areas, well within the usual noise associated with monthly data reporting.      

In the tourism sector, seasonally adjusted hotel and motel taxes increased 9% during the first quarter and showed a 7% gain as compared to year-ago levels. Airport boardings declined 1% but remained up by 4% on an annual basis. Retail sales fell 2.5% and are down 2.7% from a year ago. Both the retail trade and hospitality sectors shed 100 jobs each. The leisure and hospitality sector provides work for 27,600 employees.

Port activity appears to be clearing the period of instability experienced in 2025. After seasonal adjustment, the number of shipping containers handled increased 1.7% in the first quarter, reversing a nearly 6% loss in the closing quarter of 2025. The regional logistics sector added 100 workers, bringing employment to 24,200 (compared with a reported 18,900 in mid-2025). 

The goods-producing side of the economy shed 300 jobs and settled at 35,100 workers for the quarter. Minor quarterly losses of about 200 construction workers are now accumulating, totaling 900 workers as of the end of 2024, most likely due to the winding down of construction for the Hyundai Motor Group Metaplant America in Bryan County. Total construction employment now stands at 9,500. Manufacturing employment shed 100 jobs, falling to 25,600, but is now reported as roughly 2,500 workers higher than in data through mid-2025. 

Private sector wages, reported in inflation-adjusted dollars, increased 1.9% to $30.38 from $29.83 per hour during the quarter. Over-the-year gains in wages were 5.6% and represent meaningful growth in consumer purchasing power. 

Regional Labor Market

In the labor market, the monthly number of initial claims for unemployment insurance jumped 11.4% to 657 from 590 in the previous quarter. Compared to a year ago, however, new claims are down 1.2%. The length of the workweek in the private sector increased 1.1% during the quarter to 31.5 hours, and is now 3.5% longer than data from a year ago. The slide in the length of the post-pandemic workweek appears to have ended in late 2024, increasing for five consecutive quarters. It has lengthened by 5% (roughly 90 minutes) from its low.

Housing Market

In the housing market, the seasonally adjusted monthly issuance of construction permits for single-family homes dropped sharply by 29% from 739 to 524 permits. However, the average value for a single-family building permit issued jumped sharply by 24%, rising to $275,400 from $221,700. Building permit value, which does not include the cost of land or builder profit, is now 15% higher than the value a year ago, while the number of building permits issued is 35% lower than in the first quarter of 2025.

Toma noted that the story of the employment data in the first quarter is the unprecedented upward revision in the reported number of manufacturing and logistics workers, which changed the dynamics of the regional economy throughout 2025 from modest job losses to modest job gains. The upward revision was staggeringly high, he said, and underscores the importance of the emerging automobile manufacturing sector and foundational port and international trade ecosystem to the health of the metro area economy.   

Given the volatility and gradual decline of the forecasting index over the last year, expectations are for continued modest growth in the regional employment base and for generally weaker-than-average regional economic conditions through the remainder of 2026, Toma shared. 

“Elevated uncertainty in the U.S. economy, continued trade policy uncertainty, and elevated energy prices will continue to put pressure on business growth and the household budget, creating economic headwinds for the national and regional economy,” said Toma. 

A Note from the Analyst

The Economic Monitor is available by email and at Georgia Southern’s Center for Business Analytics and Economic Research’s website. To receive the Monitor by email, send a ‘subscribe’ message to [email protected].