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Faculty Spotlight: Michael Toma


Georgia Southern’s Q3 2018 Economic Monitor show consumer confidence up, regional economy growth phase to slow in 2019

Georgia Southern University’s latest Economic Monitor, which analyzes Q3 2018 data and identifies trends affecting the regional economy, reports signs of weakness are emerging more clearly in Savannah’s three-county metro economy. Electricity sales and boardings at the airport lifted the economic index, while port activity remained strong and unemployment faded.

“Consumer confidence in the south Atlantic states has been volatile for about two years but generally rising while oscillating between ups and downs,” stated Michael Toma, Ph.D., Fuller E. Callaway Professor of Economics, and director of the Center for Business Analytics and Economic Research (CBAER). “Overall, the regional economy’s growth phase is expected to further weaken in early 2019.”

During the third quarter of 2018, the Savannah metro economy expanded at a rate of 0.6 percent, or 2.5 percent annualized. Much of the upward movement in the index of current activity is attributed to electricity sales (measuring residential, commercial and industrial activity) and boardings at the airport. Port activity increased about 2 percent during the quarter and is up 11 percent compared to last year’s data. The regional service sector, which includes leisure and hospitality, as well as retail trade and state and local government saw the most job losses, while the information sector, and education and health experienced job increases. Manufacturing and construction saw gains in employment.

Overall, the Savannah metro economy grew during Q3 but at a much slower rate with evidence pointing toward a sluggish near-term future. Declines in total employment, utilization of the workforce, new home construction and business/professional services employment suggest a slowdown is very likely. With the fall in the forecasting index, this suggests the regional economy may be approaching a stall.

Highlights from the latest Economic Monitor include:

EMPLOYMENT TRENDS

Total employment reported in Savannah’s metro area was 178,800, a decrease of 1,000 jobs from Q2, reducing the 12-month growth rate to 0.3 percent.

The goods-producing side of the economy added about 300 jobs while manufacturing added 100 workers, extending its streak of growth to seven consecutive quarters, during which employment increased to 17,700. Construction gained 200 workers, rising to a post-recession high of 7,600 workers.

REGIONAL UNEMPLOYMENT

For the second consecutive quarter, lower wages and a shorter workweek did not translate into increased unemployment in the region. Initial unemployment insurance claims fell 1.5 percent, from 516 to 508 in the previous quarter. New claims remain 10 percent below normal, suggesting firms appear to be managing payroll more efficiently and remain reluctant to lay off workers, letting attrition reduce the workforce. The seasonally adjusted unemployment rate fell from 3.6 percent to 3.3 percent in Q3.

HOUSING MARKET

The regional housing market, based on seasonally adjusted building permit issuance for single-family homes, fell 18 percent. This puts the regional-market leveling in line with national trends in home construction. Building permits issued for single-family homes fell to 420, compared to 513 in Q2. On the other hand, the average valuation of the building permits issued increased 4.2 percent, rising from from $219,000 to $228,000.

ECONOMIC INDEX/FORECASTING INDEX

The forecasting index fell 0.2 percent, or -0.6 percent annualized, representing a significant decline from the 5.5 percent annualized growth rate of the previous quarter. The forecasting index decreased due to weaker activity in the regional housing market and consumer expectations.

The Economic Monitor presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area (MSA). The quarterly report measures the heartbeat of the local economy, based on the analysis of economic data from the U.S. Census Bureau, the U.S. Department of Labor’s Bureau of Labor Statistics, the City of Savannah, Georgia Power and the three counties in the MSA: Chatham, Bryan and Effingham.

The report is available for free by email. To subscribe, email mtoma@georgiasouthern.edu.

CBAER, a part of the Business Innovation Group in Georgia Southern’s Parker College of Business, meets the applied research needs of Savannah’s business and community organizations. Areas of concentrated research include regional economic forecasting, economic impact analysis, economic development and business expansion, tourism development, survey-based research and specialty reports on topics of state, regional and local interest.


Logistics program prepares graduates for careers with IANA member companies

Students in the Parker College of Business at Georgia Southern University who are pursuing careers in logistics and intermodal transportation (LIT) are being prepared for and connected to careers in a program that is recognized by the Intermodal Association of North America (IANA) and its member companies.

The Bachelor of Business Administration (BBA) in LIT degree was recently spotlighted by the IANA in their e-magazine and has received scholarship awards from the organization since 2016. During the 2017-18 academic year, more than 50 LIT graduates began management careers with IANA member companies.

The program emphasizes the integration of all modes of transportation, especially surface, to efficiently move goods through supply chains. The program connects coursework to careers in business logistics.

With close proximity to the Port of Savannah and the many freight movement companies in the region, the program meets the managerial workforce needs of the freight transportation sector. Other areas students are prepared for through the program include demand forecasting and facility location decisions, which are relevant to broader supply chain applications.

Through five courses focused on freight transport within the program, the BBA in LIT extends learning beyond the classroom by incorporating industry and student-led events such as the Georgia Logistics Summit, the IANA Intermodal EXPO Academic Challenge Annual Student Competition and the Logistics Roundtable.

The Logistics Roundtable is hosted by the Logistics Association, the student organization for the LIT program, in both spring and fall semesters. During the roundtable, managers from more than 30 freight transportation companies participate in panel sessions and career networking. Many of the managers participating in the Logistics Roundtable are alumni of the program.

In addition to these activities, students take a course based solely on a case study. This approach leverages a containerized freight challenge faced by a local organization. Past cases have included overcapacity challenges of ocean carriers, congestion at marine port gates, rail-freight pricing with third-party logistics competitive responses, freight-haul routing optimization and motor carrier capacity crunches.

To learn more about the AACSB-accredited Georgia Southern University LIT program, visit GeorgiaSouthern.edu/bbalogistics.


Atlanta ‘Super Hub’ Helps UPS Deliver Holiday Packages Faster

from https://www.wabe.org/atlanta-super-hub-helps-ups-deliver-holiday-packages-faster/

*Issam Moussaoui, Ph.D., assistant professor of logistics and supply chain management, is quoted in this article.

Around this time last year, Atlanta-based shipping giant UPS was running behind on deliveries: more than three million packages a day were arriving late.

In response, the company announced in that it would invest about $7 billion on new facilities. This included a new southeast regional “super hub” a mile away from the Fulton County Airport near the Six Flags theme park.

It’s about the size of 19 football fields and the outside looks like any other warehouse.

But inside, it’s a maze. Eighteen miles of conveyor belts are diagonally stacked above each other. Look up towards the ceiling and millions of packages zip past — faster than the blink of an eye.

The boxes are tagged with smart labels, which carry information like origin and destination. Then they race through multiple scanners, including one that looks like a red camera tunnel. Kim Krebs, a media relations manager with UPS, explained it’s also called a six-sided scanner, during a tour of the facility.

“Regardless of the positioning of the box and where that smart label with all that information of where the box needs to go is, you can get it on all sides,” Krebs said.

This is just one way UPS is trying to improve its on-time delivery rate. With smarter technology, more automation, and fewer people sorting by hand.

The Atlanta facility’s human resources director Chris Franzoni, said there are about 3,000 people who work here in four shifts. About 700 people work alongside the machines at one time.

“We have a day sort, a twilight, a midnight and a sunrise position,” Franzoni said. “So basically we have a 24-hour operation.”

Compared to all of the metal and cardboard at this facility, however, it can be a while before you see a human.

Cost Savings

More companies like UPS use automation to increase speed, make fewer mistakes and save money, said Issam Moussaoui, an assistant professor of logistics and supply chain management at Georgia Southern University.

“You can turn a machine on when needed and turn a machine off when not needed without much of a downside compared to human labor,” Moussaoui said.

It can take time to hire and train seasonal employees to meet the shipping rush during the holidays, Moussaoui said. But even as more companies like UPS move to more automation — it’s not always perfect. Moussaoui cites the electric car company Tesla.

“Midway through their implementation, they realized that there are still some aspects of the company’s production process that could be better done by people than by robots,” Moussaoui said.

It may be why many employees at the Atlanta UPS facility are on the ground floor, sorting through the large and irregular shaped packages passing by them at a slower speed on a conveyor belt.

Another place where humans play an important role is in the super hub’s master control room. At any time, about two dozen employees are watching 600 cameras and sensors. Dan Koozman is the control room manager for the daytime shift.

“By monitoring all the TVs up here, employees assist the operations down on the floor — giving them a heads up on heavy flow, and if there are jams where to move their people to keep it going,” Koozman said.

One of the software programs UPS customers uses is from ShipMatrix. The company’s president Satish Jindel, said the software helps companies track packages, and uses artificial intelligence to predict slowdowns and help major carriers to the right locations.

“If the packages show up in Baltimore, but you added drivers in Washington, you end up in trouble,” Jindel said. “You have enough drivers, but if they’re not in the right place, the guy in Washington cannot help the packages that are showing up in Baltimore.”

On-Time Deliveries

Between Thanksgiving and Christmas, UPS officials said the company expects to deliver more than 800 million packages.

Jindel said, this year, there’s a good chance, packages might actually come when you’re expecting them.

“I think this is turning out to be a perfect year for [the Post Office, FedEx and UPS],” Jindel said. “It’s showing to us even in the way they are approaching the customers to give them confidence that if you have more packages you want to make more sales and promotions go ahead and do that. We are ready to handle your business.”

During the peak holiday season this year, UPS had a nearly 98 percent on-time delivery rate.

Editor’s Note: This report has been updated to reflect UPS customers use ShipMatrix software, not UPS itself.


Georgia CEO Q3 2018 results show business confidence could be shifting

Georgia business leaders’ confidence levels are still strong, according to the 2018 third-quarter (Q3) survey results by Georgia CEO, a news source that shares the state’s most important features, videos and newswires with Georgia’s top business leaders.

The purpose of the survey is to understand how general business conditions impact and influence Georgia CEO subscribers on a quarterly basis. The survey asks participants to reflect on the business conditions of the current quarter (Q3), while looking forward to the next quarter (Q4), with their expectations for business conditions. The news outlet partners with Georgia Southern University Center for Business Analytics and Economic Research (CBAER) to prepare, distribute and analyze the survey.

In Q3 of 2018, survey participant’s views of business volume and sales were slightly below 50 percent. These views were most commonly influenced by increasing demand, government policy or changing levels of competition. Participants noted it was more difficult to find qualified employees in the labor market. This could pose a challenge for future growth at some firms.

“At this point of the business cycle, it is normal to find that some firms are having trouble finding employees,” said Ben McKay, CBAER assistant director.

When asked about general business conditions for Q4, 46 percent of respondents see conditions improving, while 44 percent believe conditions will remain the same. Overall, optimism about the future remains strong despite general business confidence slowing going into the fourth quarter.

A convenience sampling technique was used for this study, and the questionnaires were emailed to subscribers of each of the 12 Georgia CEO daily newsletters. Georgia CEO publishes newsletters in Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Middle Georgia, Newnan, Rome, Savannah, Tifton and Valdosta. The survey was open from Oct. 2 to 26, with 158 valid responses recorded.