Economists: Port of Savannah to weather expected recession well
LISTEN: As “essential infrastructure,” ports are expected to fare well in 2023 even if a recession hits, according to Fitch Ratings. GPB's Benjamin Payne reports.
Analysts at Fitch Ratings, a New York financial market research firm, are projecting “mildly positive” growth for Georgia's Port of Savannah and other U.S. ports, even as the credit rating agency expects a recession to arrive in the spring.
“The gateway for both raw materials and finished goods into the United States is still through the ports,” said Fitch's lead port analyst Emma Griffith. “And so, even in a recessionary or tempered growth environment, a lot of that cargo still has to come through.”
Ports won't match the record-high growth they saw over the past two years, Griffith said, when online shopping surged during the earlier stages of the COVID-19 pandemic.
She added that East Coast ports such as Savannah's may fare better than their West Coast counterparts, where ongoing labor negotiations remain unresolved.
“There's been a lot of congestion on that side of the country, but that's actually benefited the Port of Savannah and other East Coast ports who have picked up some of that cargo,” Griffith said.
2023 could be a pivotal year for the Port of Savannah — the nation's fourth-busiest — as it plans a $410 million revamp to double down on container cargo, while offloading breakbulk cargo operations to the Port of Brunswick.
But given the backdrop of a volatile economy, the agency warns that such capital improvement projects may slow down.
“Persistent inflation and higher interest costs will make operating costs and financing of capital projects significantly more expensive,” Fitch Ratings senior director Seth Lehman said. “This could lead to delays or paring back of capital improvement projects, though federal funding could serve as a positive counterbalance.”