PrintPrintThe annual forecast, developed by the Charleston Metro Chamber of Commerce, the College of Charleston and a panel of local business representatives, said the region will see stronger growth in 2011. Employment, one of several components of the forecast, is expected to remain a trouble spot over the next two years, even as new jobs come to the Charleston area.
By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published March 24, 2010
The Charleston region’s economy will stabilize during 2010, with expansion beginning by the year’s end, according to an annual forecast from the Charleston Metro Chamber of Commerce that was released today.
The forecast, developed by the chamber, the College of Charleston and a panel of local business representatives, said the region will see stronger growth in 2011.
Despite calling for expansion, the forecast says the region’s unemployment rate will rise to 9.8% from last year’s 9.5% and fall only slightly to 9.7% in 2011. That leaves the region a long way from its 2007 and 2008 unemployment rates of 4.4% and 5.6%, respectively.
The jobs forecast is based on growth in the labor force over the past year, which officials expect to continue as job seekers move to the Charleston area as a result of job announcements.
While the region will see new jobs this year — thanks in part to several companies’ announcements late last year that they will invest and expand here — job losses will continue in 2010, the forecast says.
The theme of this year’s forecast is similar to last year’s, which predicted a “flat” 2009, with gradual expansion beginning late in the year and into 2010. By many measures, that did not turn out to be the case.
But chamber officials last year were upfront about the uncertainty in their 2009 economic forecast. The introduction to last year’s report cautioned that with the economic meltdown of 2008, modeling a forecast based on past trends was difficult.
“No one is sure when recovery will occur,” last year’s report said. “We are experiencing more uncertainty and volatility than any other forecast in the last 19 years.”
Last year, the forecast was for the region’s 2009 unemployment rate to be 6.5%. In reality, it was 9.5%. It predicted the average home sales price would be $293,726. Actual sales prices averaged to $251,604, which was a 16% decline from the previous year.
The volume of home sales during 2009 increased 10%, where the forecast had predicted a 30% drop. This year’s report notes that federal tax credits aimed at first-time homebuyers helped spark sales in late 2009.
This year’s forecast calls for home sales to increase 12.7%, with average prices rising 2.2%. Building permits for new homes, however, are expected to remain sluggish for the next two years as the inventory of existing homes is absorbed.
Commercial real estate will continue to suffer this year, the report says. Because of the lending climate, all types of speculative building are expected to be “nonexistent for the foreseeable future.”
Retail sales fell by more than 13% in 2009 as consumers curtailed spending. This year’s forecast is for 3.3% growth in retail sales, followed by a 1.6% increase in 2011. Consumers who have held off on spending for the past 12 to 18 months, along with a boost from new cruise business, are expected to fuel the increase.
After four consecutive years of declines in container volume at the Port of Charleston, capped by a dramatic 27% drop in 2009, this year’s outlook calls for 2% growth in twenty-foot equivalent units. An additional 5% uptick is forecast for 2011.
The projected gains are based on increasing volumes in the global shipping industry and the S.C. State Ports Authority’s efforts to attract new port business to the area.
Forecasts for the region’s tourism industry are largely flat this year.
“Although the visitor industry should experience a boost in business from the added cruise ship business, the corporate meetings market is not expected to rebound and will continue to hurt overall (hotel) occupancy in Charleston County,” the report says.
The annual outlook is based on data collected locally and from state and federal agencies. Working with the College of Charleston, the chamber uses time series modeling. Insights from 16 local industry representatives are incorporated into the forecast where appropriate.
Chamber officials presented the forecast at a lunch conference today. Matthew Martin, senior vice president and Charlotte regional executive of the Federal Reserve Bank of Richmond, was the keynote speaker.
Reach Ashley Fletcher Frampton at 843-849-3129.
Print