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What is the latest forecast for South Carolina’s economy in 2006?

In South Carolina, the major question is whether we will shift to faster job growth and declining unemployment in 2006.  The forecast currently calls for these trends to develop.  Total employment is projected to increase by roughly 9,000 jobs during each quarter over the next two years.  Overall, this puts the state on pace for job growth of 0.4 percent for all of 2005, while growth is expected to rise to 1.5 percent for all of 2006.  This would clearly be a welcome improvement relative to recent years, though this would still represent growth below our historical average.  Meanwhile, the state’s unemployment rate is expected to begin to decline, though it will likely remain above the national average throughout the forecast horizon. 

In terms of job growth next year for South Carolina, there will continue to be substantial differences at both the industry and regional levels.  In terms of the sectors that can expect to see that greatest job gains, the list includes the usual suspects such as leisure and hospitality, health care, professional and business services, and local government.  Meanwhile, the state’s nondurable goods manufacturers are likely to see another year of significant job losses – currently projected to be a loss of roughly 4,700 jobs during 2006 after a similarly sized loss in 2005.   

Employment trends in the state’s construction sector have been difficult to explain in recent years.  Despite incredibly rapid growth of construction activity, as measured by building permits for example, construction sector employment has been generally flat or down in recent years.  Historically, there has been a reliable relationship between construction activity and employment, but this relationship appears to have collapsed in the last four years.   

At a local level, the majority of the expected job growth next year for South Carolina is expected to occur in just a handful of counties.  The top five counties in terms of expected absolute job gains are: Charleston (8,000 jobs), Horry (3,400 jobs), Lexington (3,200 jobs), Greenville (2,600 jobs), and York (2,300 jobs).  The job gains in these five counties are expected to represent 70 percent of the net new jobs statewide in 2006.  If we expand this list to include the next five counties, such as Beaufort, Richland, Spartanburg, Dorchester and Florence, the top ten counties now should account for about 90 percent of all net new jobs in South Carolina in 2006.  Meanwhile, there are ten counties currently expected to post a net job loss in 2006, ranging from a slight loss of about 40 jobs in Laurens to a projected loss of about 400 jobs in Barnwell. 

Despite these dramatic differences at the county level, the aggregate state economy does stand to see an improvement in job growth and overall economic growth in 2006.
 

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