Published on December 9th, 2013 | by Calvin Reese0
USC Moore School economists forecast stronger growth for SC in 2014
Barring any major shifts in the U.S. Federal Reserve’s monetary policy, South Carolinians can expect an increase in jobs and personal income in 2014, according to a report released Monday (Dec. 9) by University of South Carolina economists at the Darla Moore School of Business’ 33rd Annual Economic Outlook Conference.
According to Doug Woodward and Joseph Von Nessen, economists in the Moore School’s Division of Research, the single best indicator of economic performance is the rate of job growth, which they expect to increase by 1.7 percent during 2014.
“We’ve now recovered to the point that some areas of the state have achieved pre-recession employment levels,” Von Nessen said. “Make no mistake, South Carolina’s economy is expanding.”
The Moore School’s annual economic forecast projects steady growth across most major industrial sectors, with construction industry, financial services, retail trade and the leisure and hospitality sector leading the way for the expansion.
“South Carolinians are spending more this year, which implies that they are more confident in the long-term stability of their employment and that they have more disposable income to spend. Both are positive indicators going into 2014,” Von Nessen said.
Manufacturing, the state’s leading job generator since 2009, also grew this year, but at a slower pace. However, South Carolina has been consistently strengthening its manufacturing footprint statewide, creating a broader base of firms that is here to stay, he says.
Von Nessen said the rate of growth will outpace pre-recession levels.
“South Carolina’s rate of growth is increasing at a faster rate today than it was before the recession, but because the economy fell so sharply during 2009-10, we are only now getting into a true expansion,” Von Nessen said. “The good news is that more South Carolinians are feeling the expansion. Right now we don’t see any major threats in 2014 that will derail our progress, except an abrupt change in monetary policy.”
The unemployment rate in South Carolina, which decreased from 8.8 percent one year ago to its current rate of 7.5 percent, is projected to continue to drop in 2014, he said.
Nevertheless, Economic Outlook Conference attendees were told that both the quality and the quantity of jobs matter.
“Although we’re creating jobs, wage growth has been relatively stagnant in some areas and too many South Carolinians are still working part-time because not enough full-time work is available,” Von Nessen said.
Clouding the prognosis for stronger economic growth in 2014 is a potential change in Federal Reserve practices – a potential reduction in monetary stimulus that could raise interest rates and reduce asset prices, including housing and the stock market.
Cullen Roche of Orcam Financial, LLC and Raymond Owens of the Federal Reserve Bank of Richmond were among the keynote speakers at the conference. Both addressed the likelihood of a shift in policy given the slowly improving economic conditions and the end of South Carolina native Ben Bernanke’s tenure as chairman of the Federal Reserve Board of Governors.
The Moore School’s Economic Outlook Conference has become one of the state’s premier economic and business events each year, attracting hundreds of business and government leaders.
The daylong conference also included remarks by Gov. Nikki Haley and a panel discussion on strategies for long-term economic growth in South Carolina, focusing specifically on higher education and how to ensure that South Carolina’s workforce will be appropriately trained with the skillsets necessary to fill the jobs that will be created over the next 20 years.
Moderated by Jim Reynolds, CEO of Total Comfort Solutions, the panel featured Pete Selleck, chairman and president of Michelin North America, Inc.; Pam Lackey, president of AT&T South Carolina Operations; Lonnie Emard, president of IT-oLogy and Jeffrey B. Archie, senior vice president and chief nuclear officer of SCE&G.
Moore School Economic Outlook Conference
South Carolina Communities at a Glance in 2013
In 2013 employment growth was positive in every major region of the state (October 2013 employment compared against October 2012). The biggest gains occurred in Rock Hill (+2.7 percent) and Myrtle Beach (+2.5 percent), with other sizeable gains coming from Anderson (+1.6 percent), Greenville (1.4 percent), Columbia (+1.3 percent), Charleston (+1.2 percent) and Sumter (+1.1 percent). Mild gains were seen in Augusta (+0.7 percent), Darlington (+0.5 percent), Spartanburg (+0.1 percent) and Florence (+0.1 percent).
South Carolina had solid gains in retail trade in every region of the state (+2.9 percent in October 2013 compared with October 2012), with especially strong growth occurring in Myrtle Beach (+6.3 percent), Augusta (+5.8 percent), Columbia (+4.3 percent) and Greenville (+4.3 percent). More moderate growth came from Charleston (+2.8 percent), Anderson (+2.4 percent) and Spartanburg (+1.5 percent).
Most major regions of South Carolina experienced increases in residential building permit activity over the last year. Comparing total residential building permits issued in October 2013 with permits issued in October 2012, major gains occurred in Myrtle Beach (+78.1 percent), Spartanburg (+31.4 percent), Charleston (+30.3 percent) and Anderson (+25.0 percent). More moderate gains occurred in Greenville (+18.8 percent), Columbia (+15.3 percent) and Augusta (+10.1 percent).
Unemployment rates in October 2013 have declined across all metropolitan areas compared to October 2012. The largest declines (in percentage points) occurred in Sumter (-1.6), Anderson (-1.5) and Spartanburg (-1.3). More moderate declines occurred in Greenville (-1.1), Columbia (-1.1), Florence (-1.1), Charleston (-1.0 percent) and Myrtle Beach (-1.0). The smallest decline occurred in Augusta (-0.7).
About the Darla Moore School of Business
The Darla Moore School of Business is among the highest-ranked business schools in the world for international business education and research. Founded in 1919, the school has a history of innovative educational leadership, blending academic preparation with real-world experience through internships, consulting projects, study-abroad programs and entrepreneurial opportunities. The Moore School offers undergraduate, masters and doctoral degrees, as well as distinctive executive education programs. In 1998, the school was named for South Carolina native and New York financier Darla Moore, making the University of South Carolina the first major university to name its business school after a woman.