South Carolina’s economic picture will continue to improve in 2014 – with more jobs and increased incomes – but it may not feel that way to everybody, economists said Monday.
Some wages will remain stagnant and too few full-time jobs will be available in the Palmetto State – and nationwide – next year, even as the unemployment rate falls further, economists Doug Woodward and Joseph Von Nessen said during the University of South Carolina’s annual Economic Outlook Conference.
“We are now truly in an expansion that we think can (be) sustained for several years to come,” said Woodward, a 27-year USC instructor. “We’re not firing on all engines, but we’re firing on more than we have in the past.”
The state’s rate of job growth is expected to increase by 1.7 percent in 2014 – that’s faster-paced growth than prior to the recession – with the jobless rate dipping below 7 percent by year’s end, to 6.8 percent, the economists said. The jobless rate, which has stayed above 8 percent most of the year, dipped to 7.5 percent in October, its lowest level in five years.
Normally, five years out from a recession, the state’s economy would be in a stronger expansion, Woodward said.
“People don’t feel it and they’re wondering when is this finally going to feel like a healthy economy? We’re hoping 2014, and based on our projections, it should be,” he said.
Still, any drastic action by the Federal Reserve could hurt the slowly recovering economy. Forecasters worry the Fed will soon cut its $85 billion-a-month U.S. bond-buying program, which could boost interest rates for consumers and send the stock market lower, stunting the economic recovery.
South Carolina has been “building momentum” this year toward an economy that is growing rather than struggling to recover, Von Nessen said.
“We’re moving in the right direction; we’re moving away from recovery into expansion,” he said.
Ten South Carolina counties, including Lexington and Aiken are expanding – meaning total employment levels are beyond their pre-recession peaks – Von Nessen said. Six other counties, including Richland and Newberry, are expected to exceed their pre-recession peaks sometime in 2014, he said. And all counties in the state saw employment growth in the past 12 months.
Job growth largely has been clustered around the state’s major metropolitan areas, skipping perennially problematic rural areas, such as along the I-95 corridor. Manufacturing was the primary economic driver in Charleston and Greenville during the past year, for instance, while a more diverse base of professional services and construction drove activity in Columbia, Von Nessen said. Retail trade and leisure and hospitality have been strong statewide, he said.
“That’s the other positive aspect of this year’s growth, that it really has been broad-based, which is important, too,” Von Nessen said.
While the pace of manufacturing growth slowed last year, the USC forecast predicts all those major sectors – construction, finance, retail, and leisure and hospitality – will blaze the path to expansion next year, and the pace of manufacturing growth still will outpace pre-recession levels.
“We’re increasing our rate of growth at a much faster rate, which is great for our state, but because we fell so far, we still haven’t gotten back up to that base level, so it doesn’t feel like it for everybody,” Von Nessen said.
Private sector growth figured heavily into the recovery and will play an even larger role in expansion, helping lift the state’s economy out of the deep job loss hole it experienced in 2008-2009, the economists said.
Gov. Nikki Haley, speaking for the first time at the conference, told the audience the number of jobs created in the state has risen to 39,800 since she took office in 2010, bringing nearly $10 billion in investments, and job announcements in 45 out of 46 counties.
“When we came into this administration, what was made very clear was jobs, jobs, jobs,” Haley said to the 200 people gathered. “We need them now. We need them fast, as many as possible.
“Within the governor’s office, we knew that we couldn’t control a lot, but we said, ‘OK, let’s hunker down, see what we can do,’” she said.