August 29, 2014

USC economist: Aerospace industry’s $17B impact ripples through SC economy

AerospaceA new report says the aerospace industry in South Carolina has a total economic impact of $17 billion. University of South Carolina research economist Joey Von Nessen said the aerospace industry has been a major supporter of economic growth in the state over the past decade, producing thousands of jobs throughout the state.

While the report notes Boeing has the most employees of any aerospace company in South Carolina, Von Nessen said you can’t point to Boeing’s arrival in North Charleston as a benchmark. “It’s not just Boeing,” he said during Tuesday’s inaugural South Carolina Aerospace Industry Day in Columbia. “It’s a network of firms that has risen in South Carolina over the last decade which supports over 100,000 jobs when you look at all the private sector jobs that come from aerospace and aviation, military aviation, as well as all the economic ripple effects that arise from that as well.”

Von Nessen said a major portion of the jobs associated with aerospace are military-based, which he cautions could adversely affect aerospace employment numbers in the state that if a military air bases is targeted during the next round of base closings or downsizing. Most of the military employment is located at Joint Base Charleston, Shaw Air Force Base in Sumter, Marine Corps Air Station Beaufort, and McEntire Joint National Guard Base near Columbia.

Von Nessen said over the past decade more aerospace industry related companies have located to South Carolina and that has a created a substantial economic cluster that fosters growth.

“So a new firm coming in spends money with local suppliers and those suppliers spend money with their suppliers, and so on,” he said. “And because all those firms are in South Carolina, that’s additional economic activity. If we did not have that supply chain, that initial firm would be buying from suppliers out of state and we would be losing all those ripple effects.”

Von Nessen said there are 466 civilian companies employing more than 17,000 people across the state and major portion of these enterprises are small business firms.

“One of the surprising results that came out of the study was the fact that about 75 percent of the private sector firms in aerospace in South Carolina, meaning they have five or fewer employees, and their needs are very different from the large manufacturers, so it’s important to take both into consideration.”

Not surprisingly, the single largest company is Boeing, which employs about 6,500 in North Charleston.

Von Nessen said the industry has put new demands on education in the state to prepare the workforce for the future jobs being created by the industry. He cites the development of McNair Center at USC as one important initiative.

“Helping to sustain that growth going forward those workforce needs are critically important and that’s part of the mission of McNair, and part of the reason Aerospace Industry Day is happening is to discuss strategies more generally of how to sustain growth and workforce development going forward.”

 

Unemployment increases in July after months of holding steady

South Carolina’s unemployment rate increased nearly half a percentage point in July after three straight months without change.

The state Department of Employment and Workforce said South Carolina’s jobless rate rose to 5.7 percent last month. The unemployment rate had been sitting at 5.3 percent since April. The number of working South Carolinians declined by more than 6,400 in July, while the state’s labor force also increased roughly 2,600 people during that same stretch.

Total nonfarm employment was up more than 32,000 jobs from July 2013. The statewide unemployment rate also dropped from 7.7 percent over that same timeframe.

Over the last month, jobs in professional and business services and education and health services each went down by 5,500. Leisure and hospitality jobs, along with construction jobs, were up by 1,600.

Unemployment went up in all of South Carolina’s 46 counties in July. The national rate went up from 6.1 percent to 6.2 percent during that time.

Monday’s announcement was also significant in that Bamberg County surpassed Marion County as having the state’s highest unemployment rate (12.1 percent). Marion County had held the dubious distinction for years. Saluda County had the state’s lowest jobless rate at 5.1 percent.

Nevamar plant in Hampton to close, costing more than 220 jobs

logo_nevamarA Connecticut-based company is shuttering a laminates plant in Hampton as it relocates operations to New England. The plant’s closure will cost more than 200 employees their jobs.

The Nevamar Decorative Surfaces plant is owned by Panolam Industries International. Panolam announced last week that it is shifting operations at the South Carolina plant to another subsidiary, Pioneer Plastics, in Maine. Maine’s Department of Economic and Community Development said Monday it granted Pioneer and Panolam an incentive package to make the move happen.

Panolam President and CEO Al Kabus said the home interiors industry has been hit by the housing crash of the late 2000s. He added the company would have still consolidated its operations in Maine, even without the government incentives. “The decision to move from South Carolina to Maine with the consolidation was strictly based on our asset lineup, current economic realities, and the inability to move the equipment in Maine to South Carolina,” he told South Carolina Radio Network. “It just had to go this way if it was going to happen.”

Panolam acquired Nevamar in 2006 but the Hampton plant has operated in the small town of roughly 2,800 residents since the 1940s, according to Hampton County Economic Development Commission executive director Sandy Fowler. She said over 220 employees are expected to be affected by the time the facility closes in late November.

“It will have a huge impact in the community,” Fowler said. However, she added county economic officials are working quickly to find a new buyer for the property and says those 220 employees are experienced, loyal, and ready for a new challenge.

Nevamar manufactures high-pressure decorative laminates that are often used in tile floors and other surfaces.

Kabus said Panolam executives are still negotiating a compensation package with the union whose members worked at the Hampton plant.

Fort Jackson commander says public’s help may be needed to avoid cuts

Fort Jackson Gate 2The long-term future of Fort Jackson was discussed at a meeting of the South Carolina Military Base Task Force Tuesday, as another round of military cuts are scheduled to be made in 2017.

An Army assessment study of several base reduction scenarios, which included Fort Jackson, was completed in June. Fort Jackson commanding officer Major General Bradley Becker said the assessment was based on a worst case scenario of reducing the current permanent workforce personnel 0f 5,735 – including 2,400 civilian employees — by 3,100. Becker said such a cut would severely reduce the number of soldiers completing basic training at the base, and that in turn would cut the number of visitors to the installation.

“So instead of having 5,000 visitors a week to Columbia which we get now, based on our graduation of 45,000 soldiers a year, we would be reduced to hundreds of visitors per week,” he said.

Becker said a major reduction in visitors who come to the base for basic combat training graduations would put a huge dent in the Midlands-area economy.

“Those visitors who come every single week stay downtown, eat in the restaurants, and usually stay two days,” he said. “That is a huge impact. The Army in their assessment acknowledged that there were about 5,000 visitors per week because of basic combat training graduation, but they did not account for that economic impact.”

Becker said Fort Jackson amounts to about a $2.6 billion overall economic impact for the Midlands area.

Becker pointed to the public feedback portion of the Army’s assessment period, which ends August 15. He added that time is of the essence in getting the Midlands community energized to let the Army know how much Fort Jackson means to the community. Becker said he believes the Army looks carefully at the areas that have greatest level of resistance to reduction when they make their on-site visits.

The impending reductions could turn out to be an opportunity for Fort Jackson, as the Army could also decide to relocate basic combat training operations currently at Fort Leonard Wood, Missouri; Fort Sill, Oklahoma; and Fort Benning, Georgia. Fort Jackson trains 54 percent of the soldiers that enter the Army through basic combat training and Becker said the installation is poised for expansion from a logistic and economic standpoint.

“We’ve got nine battalions now and by 2018, based on current construction projects, we’ll have the capacity for 11 battalions,” he said. “So we can actually increase capacity based on dollars that are already committed over the next several years. By next year we’ll have capacity for 10 battalions.”

Retired Major General George Goldsmith, who handles military affairs with the Columbia Chamber of Commerce, said Fort Jackson shares a rich heritage with the Midlands. Area businessmen donated 1,200 acres in 1917 to the then-Department of War to train soldiers at what began as Camp Jackson.

“The stipulation was that it be used as a training base. So in 1917 they began training soldiers to go into World War I,” he said. “They have trained soldiers in every war since then.”

Goldsmith said local supporters of Fort Jackson have launched a letter-writing campaign to express their support for the installation, with Governor Nikki Haley and the state’s congressional delegation also involved. A petition supporting the installation also appears on the state Department of Commerce website.

 

Report: SC trails in well-being of children

childrenSouth Carolina remains 45th in the nation in child well-being, according to the annual Children’s Trust “Kids Count” report.

The report also shows that poverty among South Carolina’s children has gotten worse, rising from 23 percent in 2005 to 27 percent in 2012. Melissa Strompolis of Kid’s Count South Carolina said educational achievement continues to lag behind as 72 percent of the state’s 4th-graders are not proficient in reading and 69 percent of 8th-graders are not proficient in math.

She said that does not bode well for the future. “Those are very concerning because with all the new and the economic boost that it seems that South Carolina is seeing, we want our children to be able to fill those jobs and contribute to South Carolina’s economy,” she told South Carolina Radio Network. “But they will need the education to be able to do that.”

Kids Count is a major initiative of the Annie E. Casey Foundation.

Nationally, the report shows that 23 percent, or 16.4 million U.S. children, are living in poverty. That rate is up from about 19 percent in 2005.

The report reveals that 36 percent of the state’s children lived in homes where their parents lacked secure employment, an increase from 30 percent in 2008. Strompolis says living at or near poverty causes a numbers of stressors on the family and that can lead to child abuse and neglect. Strompolis said South Carolina did show some improvement in the area of health and well-being.

“We’ve had a reduction in the rates of child and teen deaths,” she said. “We’ve also seen a reduction in the number of teens giving birth, which has also been very positive for South Carolina.”

But despite the progress, Strompolis said South Carolina continues to lag near the bottom in the well-being of its children because other states are making just as much or more improvement. Strompolis says Kids Count is sharing information with counties as a call to action so that steps can be taken, at the grassroots level, to improve various environments so children can thrive and achieve.

“What Children’s Trust is working to do is to take all of this information and put it out at the county level,” she said. “So that local communities and stakeholders can take this information back to their respective counties, which will include their county data, and work to make improvements because we may see some regional variation from one county to the next.”