A view from the Coastal Empire
We have posted about several of our university contacts in our Local Economic Analysis and Research Network (LEARN) over the years. Most publish regular updates on their state or local economies, which have proven very valuable in our understanding of how the economic recovery is progressing across the region.
One such publication is the Coastal Empire Economic Monitor, written by Dr. Michael Toma and his staff at Armstrong Atlantic State University's Center for Regional Analysis. For those of you who may not know what the Coastal Empire refers to, or where Armstrong Atlantic State University is, I'll give you a few hints:
- Money Magazine named this city #8 on its list of top places to retire.
- Paula Deen cooks there.
- Its port is one of the fastest growing in the country.
- It is often ranked as #1 on lists of the most haunted cities in America.
- It is on a coast.
Give up? The answer is Savannah, Georgia.
I'm not writing to plug the town, although it is one of my favorites in the region. I have visited Savannah and its region, but most of what I know about the area's economy I learn from Mike Toma and his report. Here are a few points from his latest reading on the Coastal Empire economy:
"The region's economy continued its slow recovery for the sixth consecutive quarter. The pace of expansion dipped, as compared to the first quarter, mimicking the nationwide slowdown in economic growth.
"The Coastal Empire leading economic index significantly improved during the second quarter of 2011. This consolidates and extends the modest improvement in the forecasting index during the past nine months. The forecasting index is pointing toward more apparent improvement in economic conditions in early 2012, while the remainder of 2011 should feel modestly better than the year's first half."
Below is the graph that shows the coincident and leading indicators for the Coastal Empire economy:
Dr. Toma concludes his assessment of the Savannah area economy by noting:
"Economic growth in the remainder of 2011 will not be particularly impressive, but should outpace growth in the first half of the year. The current expectation is conditions will show more improvement in early 2012."
This assessment is not unlike what Atlanta Fed President Dennis Lockhart sees for the U.S. economy as a whole. Late last month he spoke about his outlook in Lafayette, Louisiana:
"On a national level, the negative effects of the unusual forces that restrained the economy in the first half of this year have diminished. For example, auto production that was disrupted by shortages of supply parts from Japan has bounced back.
"While the risks have increased, I do not expect a recession. In my view, there is sufficient fundamental strength in the economy for a modest cyclical recovery to proceed while the process of necessary structural adjustments moves along. I believe the unemployment rate will come down very gradually over time."
The message here is that Savannah's challenges are not unlike those facing the rest of the country.
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department
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