If President-elect Donald Trump follows through on his sword rattling about tougher trade deals and tighter immigration, it will hurt South Carolina’s economy in the future.
That is the opinion of Doug Woodward, director of research at the University of South Carolina’s Darla Moore School of Business. The school has been ranked the No. 1 international business school in the nation for 18 consecutive years by U.S. News & World Report.
Trump, a New York real estate mogul, made those two issues the main pillars of his unlikely and successful campaign for the presidency this year. Trump takes office Jan. 20.
“That could have a huge effect in South Carolina,” Woodward said in a news conference before the university’s 36th Annual Economic Outlook Conference held Thursday at the top of the Capstone building. “Our economic outlook is very good. But the future isn’t what it used to be.”
Woodward explained that South Carolina is an export-heavy state, especially in tires and cars. In fact, South Carolina leads the nation in the export of tires.
Also, much of the state’s economy rises and falls on exports and imports through the Port of Charleston. And many of the state’s 22 international manufacturers depend heavily on imported parts for everything from cars to airliners.
Tighter trade, a rising dollar and tariffs on international companies could make South Carolina products more expensive abroad, and the import of parts for other products more costly as well, he said. That could flat-line the state’s growing manufacturing base.
“It’s very dangerous,” he said.
Also, the Palmetto State depends heavily on agriculture, the hospitality industry and construction, Woodward said. All three of those sectors require high amounts of immigrant labor. Trump has said he would like to make it more difficult for immigrants, particularly Hispanics, which make up a large part of the workforce in those industries, to enter the country.
Agriculture and hospitality in the state are already suffering from a lack of labor, he said.
“We’re facing a lot of uncertainty,” he said. “But it’s not going to affect us in 2017.”
Meanwhile, Woodward and fellow USC economist Joseph Von Nesson reported at the conference that jobs in South Carolina are expected to grow by a steady 2.6 percent in 2017 because of healthy expansion of the state’s industrial base across all regions.
Economic growth has been accelerating for the past several years, Nessen said. It leveled off somewhat in 2016, but is expected to continue growing at a constant rate, he said.
Von Nessen noted that the labor market has strengthened, and the state’s unemployment rate has dropped to 4.7 percent.
“Although this is good news for workers. It also means that employers are now struggling to find qualified employees to fill new positions,” he said. “Going forward, if we want to achieve a higher rate of economic growth, this skills gap will have to be addressed.”
Nessen and Woodward said two industry sectors led the broad-based growth in 2016.
The manufacturing sector and the professional and business services sector were the fastest growing industries this year, having driven high-wage job creation throughout the state and supporting high rates of consumer spending.
They also identified the construction sector as a bright spot. In addition to the overall strengthening of housing demand, which experienced lackluster growth from 2010 to 2015, the construction industry was given a boost by rebuilding efforts stemming from the historic 2015 flood.
The economists estimated that more than 20,000 temporary jobs will have been created in the state in the construction and retail sectors by the time the recovery from the flood is completed. They also expect a similar, though smaller, stimulus in the construction industry to occur in 2017 as a result of Hurricane Matthew.