By Andy Brack, editor and publisher | Feel like you’ve got a bit more of a cushion — a little bit more of cash in your pocket? Many in South Carolina do as favorable economic conditions tend to overshadow any potential problems.
Just look at some leading indicators: Home sales are up; gas prices are among the lowest in the nation. Unemployment is still higher than average, but not in the double digits statewide like it was just a couple of years back. And state sales and income tax collections — they’re at historically high levels.
“Recent numbers show a steadily strengthening economy,” said state Department of Revenue Director Rick Reames III.
Commerce Secretary Bobby Hitt says the growth of existing industry in a state with a proven record of success is fueling efforts to recruit more businesses.
“We’re leading the Southeast in manufacturing job growth, and thanks to a terrific team-first approach, we have successfully recruited more than $5 billion in capital investment to our state in three of the last four years,” Hitt said. “From aerospace to automotive, agribusiness to tourism and everything in between, South Carolina’s diverse economy is healthier than it’s ever been, helping us ensure financial prosperity for South Carolinians today and in the years to come.”
South Carolina Realtors CEO Nick Kremydas sees an improving economy in real time.
“The only thing hotter than the weather this summer has been the real estate market, especially in the metro regions along the coast and Upstate,” he said.
New numbers from his trade association show home sales were up 15.7 percent in July 2015 compared to the previous year. Pending sales are up 7.5 percent for same time period — the same percentage increase in the average sales price, which now is $230,093.
One reason prices are going up is because there’s more demand — more people moving into the state or buying homes — than there has been lately. There were just over 40,000 homes for sale in the state in July, down 6 percent from the previous year.
“It’s rather simple,” Kremydas said. “As job conditions improve so does the real estate market.
“Our quality of life in South Carolina continues to attract families from across the country. New construction has not caught up to demand (yet) and that is driving prices up and inventories down in many markets.”
Other favorable indicators
More income. Personal income increased 1.2 percent to $183.7 billion in the first quarter of the year, according to the U.S. Bureau of Economic Analysis.
More workers. Nonfarm employment rose 0.5 percent by 10,400 workers in June from the previous month, according to the S.C. Department of Employment and Workforce (DEW). While the labor force declined slightly from May to June, the state had a historic high in terms of the number of citizens working — 2,112,034, according to DEW.
“Our economy is making phenomenal progress with 67 consecutive months of employment growth,” said DEW Executive Director Cheryl Stanton. “Over the last 5½ years, there are more than 215,000 additional South Carolinians working, an expansion of more than 10 percent of the state’s workforce.”
Lower unemployment. The state’s unemployment rate dropped 0.2 percent to 6.6 percent in June. If you drill down and look at employment on the county level, four counties (Allendale, Bamberg, Marlboro and Orangeburg) had unemployment rates of 10 percent or more in June 2015. Two years earlier, 19 of 46 counties had unemployment rates of 10 percent or more, according to DEW data. More: Monthly trends.
More tax income. With more people working, there’s more revenue generated by state government in sales and income taxes. Collections of those taxes provide an immediate indicator of the health of an economy because they’re collected and reported on a weekly and monthly basis.
“The June 2015 total General Fund tax collections were nearly $900 million dollars — $898,107,789 — the largest on record for the state of South Carolina,” Reames said. “In addition, FY 2014-2015 General Fund collection was up 7.1 percent compared to the prior year.”
Be on the lookout
While tax and job numbers have rebounded, not all indices are going up. Though the changes are slight, keep your eyes on these indicators too:
Leading index. The state’s Leading Index dropped 0.34 percent in July to 101.8, which is still considered positive because it’s above 100. The index predicts economic growth over the state for the next three to six months.
Stock index. The South Carolina Department of Commerce keeps up with Bloomberg’s S.C. Stock Index, which was 3.2 percent lower at the end of June compared to the previous month.
Hours. Commerce also highlights that average manufacturing weekly hours in May dropped 1.6 percent to 42 hours. Similarly average hourly earnings of all employees in private industry were slightly down across the state from about $22 in March to just under $21 in June. That metric is important because it provides an indication about the mix of jobs — manufacturing jobs tend to pay more than service industry jobs, for example.
In June, Clemson economist Bruce Yandle questioned whether the U.S. economy was losing its steam. He pointed to weak data on retail sales, low employment growth, slowing manufacturing activity and tame productivity growth.
We Can Do Better, South Carolina!