Economy: Hinesville’s Quick Recovery

Hinesville’s economy performed well during the COVID pandemic and recovered quickly.

Thanks to Fort Stewart, the Hinesville metropolitan statistical area’s (MSA) economy performed well during the pandemic recession and recovered quickly. From peak-to-trough, Hinesville lost 9% of its jobs, which is much smaller than the 13% loss posted by the state and the 14% loss posted by the nation. All the jobs lost in the metro area were restored by the end of 2020. In contrast, the state did not fully recover the jobs it lost until the end of 2021. As of this writing in mid-third quarter, the nation has yet to fully recover all its lost jobs.

Fort Stewart, the largest military installation by area east of the Mississippi River, provides economic stability, but the base is not a dynamic driver of the metro area’s economic growth. The metro area’s private sector was responsible for the economy’s quick recovery and jobs added since. By

mid-2022, Hinesville’s total job count was 1.9% higher than before the pandemic recession, with private-sector service providers accounting for the metro area’s job growth. Jobs in federal and state government held steady, but the number of local government jobs declined.

Hinesville is one of the nation’s least economically diverse metro areas. Government accounts for 36% of jobs compared to about 15% for the state and the nation. The metro area would benefit from further diversification of its economy, allowing it to develop dynamic drivers of economic growth. After the military, Hinesville’s economy is focused on manufacturing, transportation, retailing and leisure and hospitality services. Hinesville is a good place for manufacturing, transportation and warehousing companies to operate due to its location near the Port of Savannah, about 40 miles northeast. The MSA’s low cost of doing business also benefits the industry and its prospects for growth. Over time, Hinesville’s manufacturing and transportation sectors are expected to experience above- average growth.

Proximity to and a high degree of economic integration with the Savannah MSA will work to the Hinesville MSA’s advantage. Commuter flows between Hinesville and Savannah illustrate their interdependence – 16.3% of the jobs held by people who live in Hinesville are in Savannah and people commuting from Savannah hold 12.6% of jobs in Hinesville. Given Hinesville’s small population, access to deeper and broader pools of talent in Savannah should make it easier for Hinesville to recruit manufacturing and services companies. At present, high-tech employment accounts for only 1.4% of the area’s jobs, compared to 5.4% for the nation.

One challenge to Hinesville’s economic growth is that the metro area’s population is small and is not growing very quickly. Hinesville’s relatively low earnings and the scarcity of high-tech jobs outside of the military are pushing residents to look to Savannah or elsewhere for jobs. This dynamic may change once Hinesville’s role as bedroom community for Savannah develops more fully. Should that dynamic kick in, the Hinesville MSA will become an outperformer in the Southeast.

Although the area’s population is small, there’s not a significant skills mismatch. The educational attainment of the population lines up fairly well with the types of workers currently needed. However, the area almost certainly will need to develop or attract a more skilled workforce in the future.

As of the first quarter of 2022, Hinesville’s home prices were 44% above their pre-pandemic peak levels. Home prices will probably decline in 2023 as will new home construction activity. Deteriorating housing market conditions stem from substantially higher mortgage rates and the national business cycle rather than local developments.

However, the increased importance of home ownership to many households and continuing population growth should limit home price declines in the Hinesville MSA. We do not expect a repeat of the housing bust that accompanied the Great Recession, but home building overall will be in recession in 2023.

Housing-related employment accounts for only 5.7% of the metro area’s jobs compared to 10.1% for the nation. Since Hinesville’s economy is far less dependent on the housing industry than most, the metro area will be less affected by the housing downturn than either the state or the nation. While Hinesville faces some challenges, its economic stability, location and prospects for future opportunities should boost the MSA’s growth in the coming years.

Categories: Economy, Opinions