City Talk: Long-term job market gains driven by manufacturing, construction, health care

This is the City Talk column by Bill Dawers, a longtime contributor to the Savannah Morning News.

According to recent estimates from the Georgia Department of Labor, the Savannah metro economy has added more than 18,000 payroll jobs in the past five years. That’s an increase of close to 10%, more than double the rate of population growth in that same period.

Given the rapid job gains, it’s no surprise that the Savannah metro area (Chatham, Bryan and Effingham counties) had an estimated 2.4% unemployment rate in April. That’s a very low number.

As noted in the latest Coastal Empire Economic Monitor from the Georgia Southern University Center for Business Analytics and Economic Research, the low unemployment rate over the past few years suggests that newly unemployed workers are generally finding new jobs. The tight labor market should continue to put upward pressure on wages.

Some of the long-term shifts in the regional economy have been difficult to detail because of the COVID-19 pandemic and subsequent recession, but we are clearly seeing important changes in the composition of the job market.

As expected, the manufacturing sector has grown significantly since 2019 with the addition of about 4,000 payroll jobs. That represents an increase of about 20%.

As Hyundai and other new companies gear up, manufacturing employment should continue to increase significantly for at least the next several years. A nationwide recession could interrupt that growth, but the manufacturing sector could eventually compete for the largest sector in the area economy.

Interestingly, despite the post-pandemic boom in tourism and the opening of many new restaurants, the leisure and hospitality sector has only added about 500 payroll jobs since 2019. That’s a modest increase of just over 2%, considerably slower than population growth.

It’s probably good news if the Savannah economy becomes less reliant on hospitality employment, although the dynamics could present challenges for people who are trying to get a foothold in the job market.

But don’t get me wrong. Leisure and hospitality is still the second-largest employment sector in the metro area. It accounts for about 13.6% of the total jobs in the area compared to about 10.6% across the entire state.

The retail sector has added 1,000 jobs since 2019, an increase of about 4%. Given broader consumer trends, it seems likely that there will be only modest growth in retail payrolls in the future.

The broad category of professional and business services has only grown by about 2% and added fewer than 1,000 jobs since 2019, although the recent numbers have been strong. With the advent of new AI services and technologies, the sector’s future is hard to predict.

By contrast, the sector that includes construction has added more than 2,000 payroll jobs since 2019, for an increase of nearly 30%. The lack of adequate housing across the region suggests continued growth.

The broad sector of private education and health services has also grown by about 10% over the past five years and has pulled in front of leisure and hospitality.

I share the widespread concerns about poor planning, high housing costs and environmental degradation. Those problems will continue to impact quality of life for many area residents, but there isn’t any clear sign that the issues are resulting in slower growth.

As long as people and businesses continue to move to the area, the job market should remain strong, though it might look very different in 2029 than it looks today.

Bill Dawers can be reached via @billdawers on X and CityTalkSavannah@gmail.com.