By DENNIS QUICK
Senior Staff Writer

There’s a whole lot of hammering and sawing going on in the Lowcountry, and those construction noises are the music of a bustling local economy that shows no signs of slowing down, says Charleston Southern University economist Al Parish.

During the Charleston Metro Chamber of Commerce’s March 24 regional economic outlook conference, Parish presented a sunny forecast for 2005 and 2006 based largely on a thriving construction industry.

Building permit activity will increase, as developers are expected to seek 8,800 residential permits for this year, compared with about 8,200 last year, says Parish. For 2006, homebuilders are projected to pull 9,500 permits. The permits include both single- and multi-family residences.

The value of the pulled residential building permits is expected to jump from a projected $1.2 billion in 2005 to $1.3 billion in 2006. That figure reached about $1.1 billion in 2004. Also, the dollar value of home restorations and additions is projected to increase in 2005 to $1.9 billion, compared with $1.7 billion last year. Parish expects that figure to exceed $2 billion in 2006. 

“We are not in a housing bubble,” Parish emphasizes. “Our housing market is driven by actual demand. People are moving here.”

Although the number of non-residential building permits for 2005 is expected to be fewer than in 2004—1,214 vs. 1,100—that number is projected to jump to 1,150, thanks largely to the forthcoming 600,000-square-foot Global Aeronautica aircraft assembly plant in North Charleston. Total value of non-residential building permits, which reached more than $301.8 million in 2004, is expected to climb to $450 million in 2005 and $500 million in 2006.

The growth of the region’s residential market is driving the non-residential market, spawning more construction of offices and retail outlets, Parish explains.

For years the Lowcountry has been experiencing a growth in office and retail space. Between 1991 and 2004, the region’s office space inventory rose from more than 3.5 million square feet to more than 7.6 million square feet, according to the Charleston Metro Chamber of Commerce’s Center for Business Research. During that same period, the retail space inventory soared from nearly 9.9 million square feet to about 15.4 million square feet.

All of this coincides with the region’s population growth, which has risen from 506,875 in 1990 to more than 571,630 in 2003, according to the U.S. Census Bureau.

The Lowcountry’s continued population growth is attributing to the rise in housing sales. Since 1992, existing home sales have almost tripled to nearly 14,000 last year, with the average home sale price during that period skyrocketing from about $121,340 to more than $259,000.

Other factors propelling the region’s growing economy are the $5.7 billion tourism industry, which receives about 4.7 million visitors annually and provides an estimated 105,000 jobs, and the port of Charleston, which generates an annual economic impact of more than $3 billion and accounts for 55,000 Lowcountry jobs.

The tourism industry has seen average daily hotel rates rise from $59 in 1991 to more than $112 in 2004. That figure is projected to reach $114 in 2005 and $118 in 2006.

The port is expected to handle more cargo this year, from more than 1.8 million 20-foot containers in 2004 to 2 million in 2005. That figure is projected to reach more than 2.1 million containers in 2006.

Also, the region’s retail sales, which have risen from about $9.9 billion in 1996 to $14.1 billion in 2004, are expected to rise to $14.5 billion in 2005 and $15 billion in 2006, Parish says.

Dennis Quick covers economic development for the Business Journal. E-mail him at dquick@crbj.com.

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