SAVANNAH, Ga. (WSAV)- Georgia Southern Univeristy predicts the Coastal Empire has long way to go before it sees economic recovery. Experts said the region will face a lot of unknowns in the coming months.
The business forecasting index dropped significantly in the first quarter of the fiscal year. This was largely becuase of the wave of unemployment claims filed in the last week of March.
Economics Professor, Mike Toma describes next quarters figures as ‘horrendous’, noting a loss of more than 26,000 jobs; mostly in the service industry.
“Because we live in a consumer driven economy, the level of comfort that people have interacting with eachother is important for how quickly the service sector recovers,” said Toma.
Mike Owens is leading one of the hardest hit industries in the region. He tells WSAV News 3 the pandemics economic impact has utterly devastated livelihoods, businesses, and worst of all–families.
“Businesses that they started 40 years ago could crumble as a result,” said Owens, President of Savannah’s Tourism Leadership Council. “They have laid off people in their organization that they consider family because they’ve been with them for 40 years,” he said, “they are seeing strife that no one could ever have expected.”
Tourism and hospitality sectors depend on people spending their money, at hotels, shops, and local attractions. Amid the economic downturn that’s not happening enough to sustain the industry.
“The takeaway is that most of our spending in the economy is by households and consumers and our activity has been severely constrained for the last two months now,” said Toma.
Owens said there’s a domino effect to a crumbling tourism industry.
“Our vistor spend is one of the most significant tax producers and that directly affects our millage rates as homeowners here,” he said. “It directly impacts the services so city council is going to have some very difficult decisions to make moving forward.”
Owens said the good news is we’ve already weathered the worst of it. Now, small business owners will have to adapt to a new normal, thinking outside the box to generate cash flow.
“I think we will continue to see that innovation and we need to encourage and embrace that innovation as we see it,” said Owens.
Toma predicts full recovery won’t happen until the end of 2021. He said it’s likely the city of Savannah will have to take drastic cost saving measures in the next fiscal year.