By C. Grant Jackson
South Carolina can expect continued slow and steady economic growth for 2018, according to economists with the Darla Moore School of Business at the University of South Carolina.
Job growth, which research economist Joey Von Nessen calls the single best indicator of economic performance, is expected to grow at 2.1%.
Von Nessen and Doug Woodward, director of research at the Moore School, presented their 2018 forecast Friday at the 37th Annual Economic Outlook Conference. Some 250 business and community leaders heard from the two economists and state and business leaders.
The forecast predicts that the state’s unemployment rate in 2018 will drop slightly to about 3.6% from its current 3.9%. Total personal income is expected to grow at 4.3% in 2018, up from 2017’s 3.8% growth rate.
But Von Nessen and Woodward both pointed out that there is not much room for significant expansion of the state’s economy without solving potential labor force shortages or improving the rate of productivity.
The bottom line is that South Carolina is approaching full employment. “The labor market in South Carolina is more favorable to workers than at any time in the last eight years,” Von Nessen said. “With the unemployment rate currently at 3.9% — the lowest level since the year 2000 — employers are having to provide stronger incentives, such as higher wages, to attract and retain the workers they need.”
The continued economic expansion has put pressure on the state’s labor market, and dealing with continuing workforce challenges was the theme for much of this year’s conference.
Conference attendees heard from Gov. Henry McMaster, who earlier in the day had attended an announcement of a partnership between USC and Clemson and Samsung Electronics America at the company’s home appliance manufacturing plant in Newberry. “We’re finally seeing the proof of our labors put in a long time ago,” McMaster said of the major plant announcements such as Samsung, Boeing and Volvo Cars.
South Carolina offers significant advantages with its technical education system, the Port of Charleston and two inland ports, McMaster pointed out. “Economic growth is the solution to all our ills,” the governor said, “if we just don’t mess it up.”
Cheryl Stanton, executive director of the S.C. Department of Employment and Workforce, discussed steps the department is taking to revamp some areas of workforce training and connect workers to jobs.
Boeing South Carolina Vice President and General Manager Joan Robinson-Berry spoke about the need to find talent and to explore shifts in how the state educates workers. “We need to figure out where all the talent is,” she said, “and that is not necessarily in a four-year school.”
But even as the state faces labor market challenges, South Carolina’s “market fundamentals are strong, and the state’s economy is in a very good position as we head toward 2018,” Von Nessen said.
The current U.S. economic expansion is in its ninth year and is the third longest in the nation’s history. Barring unforeseen developments, it will become No. 2 in 2018, and, if it continues into 2019, will be the nation’s longest economic expansion.
“It’s important to remember that economic expansions don’t die of old age,” Von Nessen said.