Five signs the economy in SC is improving

The signs are everywhere.

You pull up to your favorite fast-food restaurant, and they have posted “Now hiring all levels.” Or the lines at the big box discount stores are longer.

These are all signs that the economy, which reeled for years through the Great Recession, is not only on the mend, but is rolling.

“Those long lines at Wal-Mart mean two things,” said Lewis Gossett, chief executive of the South Carolina Manufacturers Alliance, whose membership is beginning to feel the pinch of higher production demands coupled with a tightening job market. “More people are buying things, and the store can’t find enough help.

“People have more options today,” he said. “And they are stepping up to the next level of work.”

Here are five lesser-known indicators that the economy is moving in the right direction:

Eating out

Spending on food service from both South Carolina residents and out-of-state visitors rose to $3.9 billion in 2015 from $2.8 billion in 2009, at the end of the Great Recession, according to the state Department of Parks and Recreation.

Bobby Williams, chief executive of the local restaurant chain Lizard’s Thicket, said his stores have seen a 10 percent increase in sales since 2010. And he expects that momentum to continue.

“We’re a good barometer about what is going on,” he said “If our business is good, everybody’s business is good.”

Williams is president of the Columbia Restaurant Association, a division of the S.C. Restaurant and Lodging Association. He noted the large number of new restaurants that have opened in Columbia in recent years, particularly in the Vista, and said it was an indication an improving economy.

“The Vista is booming and everybody is happy,” he said.

Lizard’s Thicket has 14 locations around the Columbia area and one in Florence. The biggest growth in the franchise, he said, is in the Blythewood store.

Williams said the company is beginning an aggressive refurbishing program for its stores this year, “and maybe expansion in the future.”

Travel

Like restaurants, hotels are riding the improving economic wave. People have more disposable income, and they feel more secure that their jobs are safe. So they are willing to take a vacation.

S.C. Parks and Recreation statistics show spending on hotels in the state skyrocketed to nearly $3 billion in 2015 from $1.9 billion in 2009.

“I think we’re going to continue to improve in terms of occupancy and rate per room,” said Andrew Lucas, general manager of The Inn at USC/Wyndam Garden Columbia. “We felt the bottom back in 2008. Since then people have started traveling again.”

Adding to the rise in the economy are the growing travel habits of millennials, he said.

“They are looking for new experiences,” said Lucas, who also is president of the Columbia Lodging Association, also a chapter of the S.C. Restaurant and Lodging Association. “They are willing to spend money on those experiences and not so much on things, possessions. That’s going to help drive our occupancy.”

But tapping into that millennial vein will take a new type of marketing in a new economy: social media.

“We’re going to have to be on our game because you can’t hide a bad experience anymore,” Lucas said. “One bad review will kill you.”

Truck drivers

Oddly enough, truck drivers – or the lack thereof – is a huge indicator of which way the economy is moving.

As the economy improves, more freight must be moved and more jobs become available. As the economy worsens, the need to move product decreases, and more people are willing to sign on to drive despite the stresses of long distance hauls.

Rick Todd, chief executive of the South Carolina Trucking Association, said freight companies are always looking for drivers.

“But when the economy ticks up, the situation is exacerbated,” he said. “When there are slowdowns, it takes the pressure off.”

The American Trucking Associations posted the shortage at about 20,000 nationally in 2011. But the group estimates that number could grow to nearly 100,000 by the end of this year.

“When there is more competition for jobs, there are more people willing to drive,” Todd said. “When the economy improves and you increase freight demand, you need more drivers.”

He added that millennials are turning a cold shoulder to the industry: Only one half of 1 percent of drivers 18 to 21 years of age have a commercial drivers license. Drivers 52 and older carry 45 percent of the commercial licenses, and they are nearing retirement.

“We’re staring down the barrel of a gun,” Todd said.

Shortage of workers

Another shortage that could have even more lasting ramifications in South Carolina are high-skill manufacturing jobs. A University of South Carolina study shows jobs requiring a college degree, including from two-year and four-year programs, will jump from 61.5 percent in 2013 to 66.7 percent in 2030.

A national study by the Deloitte Manufacturing Institute shows that over the next decade, nearly 3.5 million manufacturing jobs will likely have to be filled, resulting in 2 million of those jobs going vacant.

For Gossett, of the S.C. Manufacturing Alliance, keeping up with that curve is vital to the state’s economic future.

“It’s a bad situation right now,” he said. “The entire country is dealing with a skill shortage and we think it’s going to intensify. If a state wants to remain competitive, they are going to need to be on top of the workforce issue.”

South Carolina might be more at risk than other states, he said, because it has a small population and some big-hitting, rapidly expanding manufacturers like Boeing and BMW – with more, like Volvo and DaimlerChrysler, on the way.

But Gossett said he is confident the state, through its strong technical school system and private initiatives, can rise to the challenge.

“We’ve always met the need and and we will continue to meet the need,” he said.

Home remodeling versus purchasing

When the economy was in the dumps, not only was it harder to qualify for a loan to purchase a house, but many people chose simply to remodel their existing homes in the face of financial uncertainty.

According to the U.S. Bureau of Labor Statistics, in South Carolina in 2016, annual employment growth for new construction was approximately 9 percent, compared to just 6 percent for remodeling construction.

By contrast, in 2014, remodeling construction employment growth was approximately 5 percent new compared to just 3 percent for construction employment growth.

“As the economy has improved, more people have become employed and have more disposable income,” said USC economist Joseph Von Nessen. “In addition, those that were already employed are more confident that they will remain employed for the foreseeable future.

“This has resulted in a shift in consumer buying patterns towards the purchase of new homes and away from the remodeling of existing homes,” he said.