Recovery to continue in 2011, USC economists say
The South Carolina economy improved in 2010 and will continue to recover in 2011 but at a slow pace, according to the forecast released by University of South Carolina economists at the Darla Moore School of Business’ 30th annual Economic Outlook Conference (EOC) Thursday (Dec. 9).
Job growth, the most important measure of economic progress next year, is expected to increase to 1.2 percent in 2011 from 0.1 percent growth in 2010, according to the presentation by Dr. Doug Woodward and Dr. Joey Von Nessen, economists in the Moore School’s Division of Research, to business and government leaders who attended the event from throughout the state.
“Personal income, a good measure of overall economic activity, should grow 4.8 percent over the next year,” Von Nessen said. “We expect higher rates of job growth in 2011, primarily from the service sector, but also with Boeing and other manufacturers.”
Retail sales also should improve, Von Nessen said.
“We’ve seen consumer confidence perk up this year, which will hopefully translate into higher retail sales during the holiday season,” Von Nessen said. “We’re off to a good start. Black Friday sales were up from last year. This should be the best season since the Great Recession began three years ago.”
Von Nessen said the accelerated economic activity will slowly help reduce South Carolina’s high unemployment rate, which is at 10.7 percent.
“Construction and manufacturing have been hit the hardest in terms of long-term employment losses, and there aren’t many other job sectors right now that are in high demand,” he said. “Boeing will open in North Charleston and boost manufacturing payrolls. Other modest gains should be found in autos and other durable goods producing industries.”
Construction activity is expected to drop slightly in early 2011 and then finally rebound to a 3.7-percent growth rate later in the year, though from a low base.
“We’ve seen good things happen in 2010: a thriving stock market and a dramatic fall in new unemployment claims,” Von Nessen said. “If these trends continue, and business confidence is restored, employers who have been putting off hiring because of economic uncertainty will finally act. This will spur further growth.”
The Moore School EOC 2010 forecast presented last year proved to be accurate.
“Relative to other economic forecasts for South Carolina last year, ours was the most optimistic for 2010,” Von Nessen said. “We were pleased that the state did as well as our outlook suggested.”
Last year, the Moore School economists at the EOC predicted an average 11.2 percent unemployment rate, 0.2 percent growth in employment and 3.3 percent growth in personal income for South Carolina for 2010. The actual figures were 11.3 percent, 0.1 percent and 3.4 percent, respectively.
The daylong conference included a panel on small business and the economic recovery. The conference featured a keynote address by Dr. Zoltan Acs, chief economist at the U.S. Small Business Administration and a professor at George Mason University, where he is the director of the school’s Center for Entrepreneurship and Public Policy.