The Savannah metro area economy experienced minimal growth in the second quarter, according to Georgia Southern University’s Q2 2026 Economic Monitor, published last week.

“Economic growth in the Savannah metro area sputtered during the second quarter of 2026,” said Michael Toma, Ph.D., Georgia Southern’s Fuller E. Callaway Professor of Economics. “The indicators of current economic activity were mixed, with gains in port activity and logistics, counterbalanced by challenges in the hospitality sector and generally weak overall employment growth.”  

Toma also noted that the regional business forecasting index declined modestly for the fifth consecutive quarter. Housing market indicators are mixed while the labor market remains strong, with new unemployment insurance claims declining and the unemployment rate falling to 2.7%.                            

Employment Sector 

Employment growth in the Savannah economy continued its slow pace, adding 500 workers, a 0.2% increase. Total regional employment is 216,600, 0.5% higher than one year ago.

The service sector added 500 jobs, led by leisure and hospitality, which gained 600 jobs and now employs 28,200 workers. State and local governments added 200 jobs, while retail employment fell by 400. Other service sectors experienced modest gains or losses of 100 jobs.     

In the tourism sector, seasonally adjusted hotel/motel taxes decreased 2.8% during the second quarter, but maintained over-the-year gains of 4.9%. Airport boardings declined for the second consecutive quarter (-0.4%) with over-the-year gains slowing to 0.6%. Retail sales rebounded 3.8% and are now up 3.4% as compared to one year ago. 

Regional Labor Market

In the regional logistics sector, port activity is developing a notable upward trend dating back to late 2025. The seasonally adjusted number of shipping containers handled increased 2.9% with year-over-year growth turning positive at 1% after losses earlier in the year. The regional logistics sector shed 100 workers, bringing employment to 24,100.

The goods-producing side of the economy held steady at 35,100 workers in the second quarter. Minor quarterly losses of 100 workers in construction were offset by equivalent gains in manufacturing. Total construction employment now stands at 9,400, while manufacturing increased to 25,700, which is 3.3% higher than a year ago.

Private sector wages, reported in inflation-adjusted 2026 dollars, eased 2.1% to $31.22 from $31.88 per hour. However, the purchasing power of wages increased 0.6% year over year, and the upward trend dates to early 2023. Since the cyclical low in September 2023, the purchasing power of wages in the regional economy has increased 12.4%, or a little over 4% per year.  

Although new job creation remains weak, the underlying health of the labor market remains very good. The monthly number of initial claims for unemployment insurance (UI) plunged 17% to 548 from 657 in the previous quarter. This is the lowest number of new UI claims since mid-2019. New claims are down 10.5% year over year. The length of the workweek in the private sector increased 4.3% to 32.7 hours and is now 7.1% longer than a year ago. The upward trend in the length of the workweek dates to early 2025, with an 8% increase since that low.  

Housing Market 

The seasonally adjusted monthly issuance of construction permits for single-family homes fell 9.8% to 473 from 524 in the first quarter. Permit issuance for single-family homes is now 33% below year-ago levels. Through the first half of 2026, for the first time in records dating back to 1995, the number of permits issued for multifamily housing (1,535 units) exceeded the number of single-family homes permitted for construction (1,298 units).

At the current rate, the number of single-family homes permitted in 2026 would be about 15% below 2025, while the number of multifamily units permitted would be about 36% higher than 2025. Overall, total housing units projected to be permitted for construction would be up approximately 6% from 2025 levels to 5,670 units.

The average value of a single-family building permit issued increased 0.3%, rising to $276,200 from $275,400 (building permit value does not include the cost of land or builder profit). Building permit value is now 15% higher than a year ago, mostly reflecting increased materials costs, especially for smaller regional homebuilders.  

Forward momentum in the regional economy is currently minimal. The index of current economic activity was flat through the first six months of 2026. Concurrently, total employment increased modestly by 500 jobs in the second quarter, or a 0.2% increase, which is well below long-term trend growth of 2.3% per 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 and into early 2027,” said Toma. “Additional economic uncertainty is associated with potentially higher fuel prices as global supplies are likely further diminished to critical levels sometime in the fourth quarter and also by a Federal Reserve interest rate hike before the end of the year. The Savannah metro area economy is poised for weak growth, at best, through early 2027.”  

A Note from the Analyst

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