The Savannah metropolitan economy showed signs of deceleration during the first six months of 2025, according to combined findings from Georgia Southern University’s Q1 and Q2 Economic Monitors. While some indicators remained stable, overall growth fell below the region’s historical average, influenced by shifting national trade dynamics and fluctuating consumer behavior.
Michael Toma, Ph.D., Fuller E. Callaway Professor of Economics at Georgia Southern, observed that although the labor market continues to provide stability, activity tied to spending and logistics has weakened. “The regional economy is experiencing a cooling phase, particularly in sectors linked to consumption and transportation, even as employment fundamentals hold up for now.”
In the first quarter, the local business index rose by 0.3% (1.1% annualized), but declined by 0.6% (–2.2% annualized) in the second quarter. Total employment decreased by 500 jobs in each quarter, resulting in a net loss of 1,000 positions and ending Q2 at 201,100.
Service-sector employment saw early gains in leisure and hospitality, education and health services, and local government, but these were offset by contractions in professional and business services, transportation and utilities, and renewed declines in hospitality during Q2. The logistics industry shed 800 jobs across the two quarters.
Consumer spending indicators were mixed. Retail sales dropped 2.2% in Q1 and another 0.4% in Q2, though they remained 2.1% higher than the same period the previous year. Tourism data showed a 5.7% decline in airport boardings and a 0.5% dip in hotel and motel tax collections in Q1. However, Q2 brought partial recovery: airport passenger numbers rose 3%, auto rental revenue increased 5.6%, and taxes on alcoholic beverages climbed 9%. Hotel and motel tax receipts still fell 4.5%.
Port container volume, a key regional metric, decreased 1.2% in Q1 despite importers accelerating shipments ahead of anticipated tariff hikes. A modest 0.6% decline followed in Q2. Despite quarterly drops, container traffic remained 9% above 2024 levels.
Housing data revealed volatility. Single-family building permits rose 1% in Q1 with a 20% year-over-year increase, but permit values fell 5.3%. In Q2, permit issuance dropped 12.6% and values declined 3.5%, leaving total value 9% below the prior year.
Private-sector wages, adjusted for inflation and reported in 2024 dollars, rose to $28.76 per hour in Q1 (a 3.5% increase) and reached $29.61 in Q2 (up 2.9%).
The unemployment rate fluctuated slightly, rising from 2.9% in Q4 2024 to 3.2% in Q1, then returning to 2.9% in Q2. Initial unemployment claims increased 3.7% in Q1 but fell 8.2% in Q2.
Toma concluded, “Given ongoing uncertainty in national economic policy and emerging price pressures tied to tariffs, the Savannah metro area is likely to experience subdued growth for the remainder of 2025.”
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Georgia Southern’s Economic Monitor: Savannah metro economy cools first half 2025
Combined analysis of Georgia Southern University’s Q1 and Q2 Economic Monitors shows that the Savannah metro economy began 2025 with signs of slowing, as growth in the first quarter weakened and momentum was lost in the second. A suite of indicators — consumer spending, port activity, labor market signals and housing — point to a regional economy moving below its long‐term trend, largely influenced by evolving U.S. international trade policy. n n“The Savannah economy is showing signs of cooling, particularly in spending-related activity and logistics, even as the broader labor market remains a source of strength,” said Michael Toma, Ph.D., Georgia Southern Fuller E. Callaway Professor of Economics. n nKey Trends: Q1 and Q2 2025 n nSlowing Growth in Current Activity n nThe business index for Savannah rose 0.3% (1.1% annualized) in Q1, then fell 0.6% (–2.2% annualized) in Q2. n nTotal employment dropped by 500 jobs in Q1, and another 500 in Q2, for a net loss of 1,000 jobs over the first half, ending Q2 at 201,100. n nIn the service sector, modest gains in leisure and hospitality, education/health and local government early in the year, were offset by losses in professional/business services, transportation and utilities, and additional pullbacks in leisure and hospitality during Q2. n nConsumer, Tourism and Port Activity Show Mixed Signals n nRetail sales fell 2.2% in Q1, then dipped 0.4% in Q2, but remained 2.1% above levels during the same period one year ago. n nTourism metrics saw declines in Q1: hotel/motel taxes slipped 0.5% and airport boardings fell 5.7%. Q2 was mixed, as airport boardings bounced back, posting a 3% gain, along with a 5.6% gain in auto rentals and a 9% increase in taxes on beer, liquor and wine. Hotel/motel tax collections declined 4.5%. n nTurbulence in international trade affected port activity (shipping container units), which slipped 1.2% in Q1, even as importers frontloaded operations to get ahead of increasing import tariffs expected in the second quarter. There was only a modest decline of 0.6% in Q2. Container volume remained 9% higher when compared to 2024 data. The logistics sector lost 800 jobs across the two quarters. n nHousing and Wages: Mixed Signals n nSingle‐family building permits increased in Q1 by 1% (over quarter) and posted a 20% increase over‐the-year gain, but permit values dropped 5.3%. In Q2, permit issuance fell 12.6%, and values declined by 3.5%. Building permit value showed 9% below year-ago figures. n nPrivate-sector wages, reported in inflation‐adjusted 2024 dollars, increased 3.5% in Q1 to $28.76 per hour, and then again by 2.9%, equaling $29.61 per hour in Q2. n nLabor Market: Still a Source of Strength, But Softening n nThe unemployment rate ticked up from 2.9% in Q4 2024 to 3.2% in Q1, then fell back to 2.9% in Q2. n nInitial unemployment insurance claims increased 3.7% in Q1, but decreased by 8.2% in Q2. n n“Given the volatility on the forecasting index and generally weaker regional economic conditions in the first half of the year, growth in the Savannah metro economy is expected to remain below its long-term trend through 2025,” Toma said. “Elevated uncertainty in the U.S. economy and slowly emerging tariff-related price increases will be headwinds for national and regional economic growth through the remainder of the year.” n nGeorgia Southern University, a public Carnegie Doctoral/R2 institution founded in 1906, offers approximately 155 different degree programs serving more than 26,100 students through 10 colleges on three campuses in Statesboro, Savannah, Hinesville and online instruction.