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Construction, port brighten first quarter economic forecast
By Dennis Quick
Senior Staff Writer
Take lots of hammering and sawing at building sites, throw in plenty of cargo container traffic, add steady tourism and you have the ingredients for the tri-county area’s strong economy.
That same combination will continue to support the area’s economy during the first quarter of this year, according to Charleston Southern University Center for Economic Forecasting economist Al Parish and Scott Moore, manager of the Charleston Metro Chamber of Commerce’s Center for Business Research.
The economists project first quarter 2006 to be sunnier than first quarter 2005.
Parish and Moore project the dollar value of first quarter 2006 construction permits for homes and commercial buildings to reach $520 million. In the first quarter of 2005, that figure stood at more than $438 million.
The port should also enjoy a vigorous first quarter, transporting more than 500,000 20-foot cargo containers, compared with 480,935 that were transported in first quarter 2005.
Attendance at local attractions is expected to rise during the first quarter, the size of the labor force is projected to increase and the employment rate should inch upward.
On the cloudier side, the projected number of people flying to Charleston will decline, due largely to Delta Airline’s cutback in flights to the Lowcountry and to discount airliner FLYi’s bankruptcy.
Still, the region’s economy continues to attract people from other parts of the nation. The result is that the real estate and construction industries are “booming,” Parish said.
Building permits
Non-residential building permits for first quarter 2006 are projected to reach $140 million in value, compared with $112.2 million in first quarter 2005.
Meanwhile, the housing market will continue to bustle. The dollar value of residential building permits is expected to jump from a first quarter 2005 mark of $326.3 million to $380 million in first quarter 2006.
And the number of homebuilding permits issued in first quarter 2006 is projected to reach 2,750, compared with the 2,522 permits issued in first quarter 2005.
Existing home sales in first quarter 2006 are expected to reach 3,900, surpassing first quarter 2005 home sales by 375 homes. The average sales price of a home in the tri-county area is $288,197, according to the Charleston Trident Association of Realtors.
“A lot of people are moving here from areas of the country where housing is more expensive,” Parish said. “A lot of them are retirees; a lot of them are executives who don’t live here all the time.”
The port
The Port of Charleston is projected to handle about 502,000 cargo containers in the first quarter, 21,065 more containers than it handled in first quarter 2005.
The port’s expansion in North Charleston will be “vitally important,” increasing the port’s container cargo capacity by 60%, surpassing the New York-New Jersey port’s capacity and rivaling that of Long Beach, Calif., Parish said. Long Beach is the nation’s second-busiest port.
The Charleston port could become even busier if DaimlerChrysler expands its Sprinter van plant in Ladson to the point where the plant starts manufacturing parts for the van, rather than simply assembling it, Moore added.
“That would mean more exporting,” he said.
Labor force
The Lowcountry’s labor force will grow from 293,000 in first quarter 2005 to 303,000 projected for first quarter 2006.
Accountants, lawyers, physicians and other skilled professionals—many of them newcomers to the region—comprise a growing sector of the Lowcountry’s labor force, Moore said.
First quarter 2006 projections show 10,366 more people employed than in first quarter 2005, dropping the unemployment rate from 5.6% to a projected 5.2%.
Tourism
The Lowcountry’s tourism industry is projected to remain healthy during first quarter 2006.
Attendance at area attractions for the first quarter is projected to increase by more than 2% over first quarter 2005, according to Parish and Moore.
“We’re seeing new visitors to the market, in addition to repeat visitors,” Parish said.
A key reason for this is hotels are offering more “value-added” packages that include tickets to attractions, Parish said.
Occupancy rates at Lowcountry hotels are projected to reach 64% in the first quarter of 2006, compared with 62.9% in first quarter 2005.
The average number of room-nights sold at hotels is projected at 795,000 for first quarter 2006, compared with 759,440 for first quarter 2005.
Daily room rates at hotels are expected to reach $128 for the first quarter of 2006, up from $112.80 in first quarter 2005.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.
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