Two experts predict a bright financial future ahead for South Carolina’s economy at the Berkeley County Chamber of Commerce annual economic forecast presentation Feb. 5.
Held virtually due to the ongoing presence of COVID-19, the event featured special guest speakers Frank A. Rainwater, executive director of the South Carolina Revenue and Fiscal Affairs Office, and Dr. Bruce Yandle, dean emeritus of Clemson University's
College of Business and Behavioral Science and alumni distinguished professor of economics.
The hour-long program took a close look at how the pandemic will influence national and regional economic trends in the coming year. The glimpse into the future gave listeners information that should help in making innovative business decisions.
WORKING HARD, SPENDING HARDER
After losing approximately 200,000 jobs statewide since the start of COVID-19, by December 2020, 88% of jobs lost were recovered. The current growth is exceeding the estimate and aided by stimulus.
Most sectors of the state’s economy are trending well, with the exception of leisure and hospitality, which is still significantly lagging. Construction and manufacturing have rebounded better than ever before.
Rainwater said the question is: How long will it take for South Carolina to regain its full workforce of 2.2 million jobs? The answer is undefinable but the state is trending in the right direction.
As for consumer spending, total spending is up 2.1% in South Carolina with retail spending up 20.6%. However, spending on services continues to spiral on a downward trend.
Yandle noted that the tourism sector took a hit, particularly the food and beverage industry. But he’s optimistic that the industry will turn itself around as COVID-19 vaccinations trend in the positive direction.
“The economy itself is catching hold and the great American bread machine will be back running on a larger number of cylinders,” Yandle added.
CAN WE REGAIN A NATURAL ECONOMIC RECOVERY?
Impact from the first two nationwide stimulus packages, with a third way potentially on the way, have boosted South Carolina’s general fund revenue approximately $336 million above the $9.6 billion estimate to exceeding $9.9 billion.
Although Rainwater noted he’s curious about South Carolina’s actual state of economic affairs in the absence of the stimulus’ artificial effect.
“The challenge we’re facing is when do we get back on a normal path and can the natural economy replace what has been provided by the stimulus (packages),” Rainwater said.
Rainwater admitted these are some of the “big questions” that they can’t answer.
For the following budget year, Rainwater expects a small surplus of $36 million to the state’s Capital Reserve Fund. Currently, the fund holds $176 million.
South Carolina’s General Assembly Fund has approximately $1 billion of cash available for one-time needs. From a conservative standpoint, Rainwater thinks there’s only $180 million to commit to new programs in the fiscal year ahead.
Berkeley County is the third fastest-growing population in the state, behind Horry and Lancaster counties, according to the U.S. Census.
“We’ve got a lot of people coming our way,” Yandle said. “You’re welcome in Berkeley County and South Carolina. This is the spot.”
Berkeley County Chamber of Commerce’s 2021 annual Economic Forecast was presented by Nucor Steel Berkeley.