An annual projection of South Carolina’s economy predicts the state will continue to see moderate growth into 2015, but not as strong as is typically expecting while recovering from an exceptionally powerful recession.
University of South Carolina economists Doug Woodward and Joey Von Nessen released their annual economic outlook for the state on Wednesday. The outlook predicts that job creation will grow at 1.9 percent next year, roughly equivalent to the 2 percent reported so far in 2014. However, they agreed South Carolina’s economy was the strongest it had been since the housing market crashed in 2008.
“It’s moderate growth,” Woodward told reporters while revealing the pair’s findings. “It’s not as robust as we’ve seen in previous expansions in the 1990s and earlier in the 2000s. At this stage in the business cycle, we usually see stronger growth across all sectors.”
“South Carolina has hit its stride in 2014. We expect that to continue,” Von Nessen . “If you like 2014, you will like 2015 too.”
The report is released each December at the start of the annual Economic Outlook Conference at USC. The 34th edition of the largest event of its kind in the state will be held at the college’s business school on December 16.
The economists did warn that incomes in South Carolina are still rising at just 1.8 percent, slower than the national average. Von Nessen said there were several factors likely causing the lag in income growth, including a relatively-high unemployment rate that makes it difficult for employees to negotiate pay raises. He added that an increased reliance by manufacturers and distributors on staffing services means a higher level of part-time work than in a fully-employed economy.
“That’s what has been unique about this (economic) expansion,” he said. “In 2014… we’re seeing more reliance on employment services. That’s one of the reasons that we’re seeing lower income levels overall and lower wages.”
But Woodward noted that consumers are still better positioned in South Carolina when compared to recent years, as inflation remains low and gas prices have decreased dramatically.
The pair predicted tourism-based job growth would be the biggest factor in South Carolina’s jobless rate declining by a half-percentage point in 2015. Woodward said explosive manufacturing hiring has given way to other jobs sectors in the past year. However, he noted South Carolina has comparatively few jobs in the two sectors experiencing the largest wage increases during the recovery — energy and information technology.
South Carolina saw a large decline in its unemployment rate this spring, dropping below the national average at one point. But the rate gradually ticked back up again over the summer, as
Myrtle Beach had the strongest jobs and housing growth of any region in the state this past year, which Von Nessen said was helped by better tourism numbers and improved market for second homes. Columbia was the laggard, experiencing only a 1 percent increase in employment (compared to 4 percent for Myrtle Beach and 3.5 percent in the Augusta region) and a decline in residential building permit. Von Nessen said a heavy reliance on government jobs keeps the city’s economy stable during a downturn, but also prevents it from experiencing the private-sector-buoyed growth on the coast.