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Construction, port brighten 4th quarter economic forecast
By Dennis Quick
Senior Staff Writer
The Lowcountry’s economy will continue flexing its muscles in the fourth quarter and have a stronger showing than the fourth quarter of 2004, according to local economic forecasters.
Home sales for this year’s fourth quarter should outpace last year’s by more than 13% and reach the 3,600 mark, the number of residential building permits are expected to increase by 11.7% to 2,300 permits with a total value of
$370 million, and the dollar value of home restorations and additions are predicted to outdistance fourth-quarter 2004 figures by 4.56% and reach $55 million.
On the commercial construction side, the dollar value of building permits for fourth-quarter 2005 is expected to soar past fourth-quarter 2004 figures by nearly 170% and reach $125 million.
“Essentially, we have an incredibly strong economy right now,” said Al Parish, of the Center for Economic Forecasting at Charleston Southern University, who co-authored the fourth-quarter forecast with researchers at the Charleston Metro Chamber of Commerce.
Parish pointed to the “continued boom in construction and home sales” and potential record-setting performances by the Port of Charleston and Charleston International Airport as some of the drivers behind the region’s robust economy.
The number of 20-foot-equivalent cargo containers, or TEUs, the port will handle in the fourth quarter is expected to surpass the fourth-quarter 2004 figure by 5.53%, while the airport should see the number of arriving passengers increase by nearly 22.3%, according to the forecast. The port’s ability to unload trucks faster and the arrival of discount airline Independence Air are the reasons behind the increases.
Also, the lodging industry is enjoying a jump in daily hotel room rates of 14% for the year, Parish noted. Average daily rates are projected to reach $130 in the fourth quarter compared with $115.60 for fourth-quarter 2004.
Although attraction attendance is expected to drop nearly 9.7% this fourth quarter compared with fourth-quarter 2004, the reason is tourists are finding more things to do in Charleston, explained Mary Graham, vice president of the chamber’s public policy and regional advancement department. Tourists are spending more time at the area’s beaches, restaurants and shops than at the area’s traditional tourist attractions like the historic district.
Even though the region’s labor market continues to grow at an “above-average pace,” this year’s fourth quarter forecast shows a 5.1% decline in employment compared with the same period last year, a nearly 5% reduction in the area’s labor force. However, Parish attributes these figures to the change in which the U.S. Bureau of Labor Statistics collects its figures rather to an actual drop in employment.
Finally, retail sales for fourth quarter 2005 are forecast to increase by 8.3% over the same period in 2004 and reach nearly $3.8 billion. The reason is tied to the area’s booming residential real estate industry, explained Scott Moore, director of the chamber’s Center for Business Research. As more houses are built, more retail outlets will be open to accommodate the new housing.
Nearly half the forecasts for the 21 economic indicators experts analyzed show decreases from the previous quarter.
Residential building permits are expected to be 18% fewer than in third-quarter 2005, home sales are expected to decline by 3.6% and attraction attendance is forecast to drop by nearly 6.4%.
Parish attributes these declines to seasonal changes.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@crbj.com.
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