South Carolina economists say the state’s business activity is almost back to pre-recession levels in many ways, but two important statistics are still low– new construction and the number of people holding jobs.
The state Board of Economic Advisors revealed the latest data at its meeting Thursday. BEA Chairman Chad Walldorf said there are some positive numbers. For one thing, the amount of revenue the state collected from corporate income taxes went up dramatically this year– from $29 million in March 2010 to $66 million in 2011. While much of the increased revenue was due to heavier enforcement by the Department of Revenue, Walldorf said almost half of it was business growth.
The state also received over $11 million more in revenue from sales taxes than it did in March 2010. Walldorf said he thinks that’s because people are buying more than they were last year. However, he adds it also means prices have gone up.
Inflation does seem to be starting to kick in, and that certainly would lead to higher prices and relate in higher (sales tax revenue). Sales are up as well. Prices are starting to trend upward. I think that’s a smaller component of the sales tax being up… but… I think it’s part of it.
In February, the board projected the state would raise $5.8 billion in general fund revenue this fiscal year. That would be an increase of nearly $135 million over 2010. Walldorf said he expects the BEA to adjust those projections before the legislature adjourns in June to account for the revenue growth.
However, the BEA also pointed to problems the state continues to face. For example, new construction has remained stagnant for nearly three years. Also, the state’s unemployment rate– while declining– is still sixth-worst in the country at 10.2 percent.
The number of people applying for jobless benefits declined in March. The report said fewer than 20,000 new people were added to the rolls. Walldorf said the number of first-time claimants has not been that low since before the recession began in 2008.
Obviously, that’s a great indicator. It’s also related to the month before (when) we had the lowest number of mass layoffs in the last four years. So, we seem to be returning to pre-recession levels in terms of unemployment claims. That would portend, you would think, to lower unemployment numbers coming in, as well.
The state will release March unemployment data on Tuesday.