By LC Leach III
More public jobs, more public jobs and more growth opportunities in 2021 – this was the opinion of several expert economists during a webinar at the end of last year, during the 40th Annual Economic Outlook Series.
Conducted by the Darla Moore School of Business at the University of South Carolina at Columbia, the webinar featured a banker from the Federal Reserve and two professors and researchers from USC, all of whom, despite the continued increase in coronavirus (Covid-19), said anticipate another economic boom sometime in 2021 because of signs and trends happening across the state.
“South Carolina’s economy has returned strong and is almost completely recovered in many areas,” said Professor Joseph Von Nessen, research economist at Darla Moore. “We saw some very strong recovery rates over the course of this year.”
With a virtual presence of around 300 people, Von Nessen used slides and graphics to address more than 15 recovery topics, including:
Recovery from unemployment
In February 2020, general unemployment in South Carolina was 2.5 percent (58,000 people) – what Von Nessen called “a historic low”.
All of that changed in March and April, during the first two months of the pandemic, when unemployment started to rise in all 46 municipalities.
In March, the South Carolina Department of Employment and Workforce (DEW) reported that the number of unemployed had risen to 61,000. In April, it increased to 288,000 and finally passed the 300,000 mark.
The hardest hit areas included almost the entire interior of the state, with a sharp decline in industry; and, almost the entire coastal region, which stretches from Cherry Grove to Hilton Head, due to the sharp drop in leisure and hospitality, and the presence of the Covid-19 pandemic.
But while the number of pandemic cases continued to increase throughout 2020, the state’s economic recovery began as early as June – when unemployment numbers dropped to about 210,000.
In August, those numbers dropped again to around 152,000 – and in October to 100,333.
“The important thing is that these people left the ranks of the unemployed because they got a job, not because they gave up looking for a job,” said DEW Executive Director Dan Ellzey.
And Von Nessen added that, except for leisure and hospitality, which, at the very least, should not begin to fully recover by the end of 2021, unemployment in all other sectors of the state’s economy is approaching pre-pandemic levels – a key indicator for further economic growth.
“We are now at 4.2% unemployment – which is within two percentage points of the pre-recession unemployment rate,” he said. “This is even closer to being comparable to where we were in February.”
Job recovery by region
At the height of the pandemic outbreak, employment dropped 12.8% in 23 counties across the state – including eight in Upstate, in addition to Charleston, Beaufort and Horry around Myrtle Beach.
By November 2020, employment across the state had returned to about 76.5% of what it was before Covid-19.
But only in and around Greenville County, von Nessen said the rate was even higher.
“It’s because Greenville, and Upstate, is the most manufacturing-centric region in South Carolina, an economy that makes intensive use of goods,” he said. “Compared to other places, Columbia and Charleston, for example, are more service-based sectors. So this is great news for Greenville and great news for the interior of the state. “
Domestic and real estate market
Despite experiencing a second wave of Covid-19 cases during late summer and a third major wave in the fall, South Carolina remained firmly in the middle of a huge market for residential sellers, due in part to low inventory levels and low interest rates.
South Carolina Realtors (SCR) released its November 2020 state real estate data reflecting another month of exceptionally high sales. Closed sales increased 13% statewide in November, compared to the previous year.
South Carolina’s housing market remained strong and homes continued to sell for a record period – in November, it was 64 days. A year earlier, the houses were sold on average in 80 days.
Sales prices increased again in South Carolina throughout November. Compared to the previous year, prices rose 19%, from $ 218,460 to $ 259,995.
The Hilton Head, Aiken and Pee Dee areas saw the biggest price increases, while the Midlands saw a slight decrease.
Unemployment insurance claims
Since March 2020, more than 777,000 people in South Carolina have applied for unemployment insurance with SCDEW.
Von Nessen said that most unemployment insurance claims come from hotel and leisure workers – meaning that the state’s economy will continue to be harmed until the sector recovers.
“This recovery is now being driven by biological rather than economic factors, which makes it unique,” he said. “The vaccine is still our best bet to restore consumer confidence. And a full recovery for South Carolina is not expected until at least the third quarter of 2021. ”
Douglas Woodward, director of research and professor of economics at the Darla Moore School of Business, said it is equally important to understand how certain economic trends will affect people in South Carolina in the near and post-pandemic future.
They include:
More Globalization
Despite the coronavirus, Woodward said global trade has barely lost its pace, especially in South Carolina.
For example, the volume of the container terminal in November 2020 fell only about 1 percent from the same month in 2019. Internal ports, such as Greer’s, are growing. And, with the US-China trade war progressing to the point where Woodward said “the trade war is over,” supply chains outside the US borders held up well during the pandemic.
“And that bodes well for South Carolina,” said Woodward. “Usually, in a recession, we see double-digit declines in trade. But the volume of trade is resurging faster than in previous recessions – and with the Port of Charleston as a pillar, South Carolina is well positioned to further develop our logistics sector and serve the expanding market ”.
More migration to SC and more remote work
From 2010 to 19, South Carolina had a net migration of about 414,000 people from other states to the state – and it wasn’t just because of the pleasant climate and the beaches.
This urban exodus was the beginning, said Woodward, of a growing trend for people who wanted to live in places with lower populations, although they could work remotely from almost anywhere.
“People are looking for space to be able to work at home and (maintain) a quality of life,” he said. “And it will work in our favor.”
Instead of lasting only during the Covid-19 crisis, Woodward and other economic experts hope that the trend will gain permanent control over the economy.
For example, Global Workplace Analytics (GWA), a research-based consulting firm in San Diego, California, which helps organizations optimize work at home, distance work and workplace strategies, estimates that 25-30 percent the US workforce will be working from home several days a week until the end of 2021.
Last April, the company conducted an online survey of 2,800 global workers to find out their preferences for working at home or in a traditional office away from home.
The findings were that 76 percent of global office workers and 82 percent of U.S. office workers say they want to continue working from home, at least once a week, when the pandemic is over. “
“There are approximately 75 million employees in the United States,” said GWA President Kate Lister, adding that if work at home happens to so many employees, the demand for offices in the United States could decrease by more than a billion square feet. “The impact on the commercial real estate sector would be huge.”
She said that likelihood is still somewhere in the future because the survey also revealed that “only 16 percent (19 percent in the U.S.) want to say goodbye to the office forever, with the majority preferring a little of both.”
“But … as workplaces are redesigned for the future of post-Covid work and rents are renewed, we will certainly see the impact,” said Lister.
This means that South Carolina’s low population density – as well as its beaches and pleasant climate – will make it even more attractive to residents of other states in the coming year, as remote work becomes a stronger trend in the workplace. job.
“This will be an advantage for companies as the economy recovers in 2021 and 2022,” said Woodward. “The increase in population growth in the Southeast region means a greater demand for goods and services in this dynamic region of the country. We were in good shape before the Covid crisis, moving to more remote work, and I think we will continue to see this trend. “
Tom Barkin, president and CEO of the Richmond Fed, agrees.
“I see promising signs for business investment and recently I am also hopeful about a vaccine,” he said. “So, my perspective is for a slow and steady recovery. You can say we got off the elevator, but we’re going to need to go back up the stairs. “