Today’s City Talk column assessing the Savannah economy at midyear

I make economic projections for the local economy with the turn of every new year. Back in January, I talked about two different scenarios: a continuation of slow growth or a much darker version in which the economy slides back into recession.

I assumed in that January column that we would have a clearer idea what direction we’re headed by this summer. But we don’t have a clear direction. The national economy has had a lousy last couple of months. Even though most commentators expect growth to pick up in the second half of the year, there’s still a real chance of recession, especially if there’s a growing crisis in Europe (and it seems there is).

I foresaw that and other negative possibilities in those January predictions. A snippet from today’s column:

Local gas prices are about 30 cents off their peak of two months ago but have been rising again recently. And prices are up more than a dollar a gallon compared to a year ago.

I also mentioned the sovereign debt crisis in Europe, which remains one of the biggest risks to the world economy. That’s nowhere near over.

I discussed home prices and construction woes at some length in that January column. I even predicted local home sales might go up as much as 20 percent in 2011 compared to 2010. That number seems overly optimistic, but many areas will likely see more stable prices through the remainder of the summer.

But high inventories likely will translate into even lower prices in the slow winter months. An excess of supply and low demand will keep new construction depressed.

We’ve had strong port traffic and tourism this spring, but the Savannah metro area still lost 900 jobs between May 2010 and May 2011. The state lost 28,300 jobs in that same period. Those are terrible numbers considering we’re two years into a recovery.

There is much more in the column.