Sunday, Oct. 24, 2004
picture is muted, at best
SC Statehouse Report
24, 2004 -- South Carolina's economic picture for the next
year appears to be mixed at best. Some see it as a glass that's
half full. Others see the glass as half empty.
Consider the positives in recent news:
Overseas investment remains high. The state ranks
second nationally in the percentage of workers employed by
American subsidiaries of foreign firms. More than 123,000
people - - about 8.1 percent of private-sector workers - -
are employed by large companies like BMW and Michelin and
smaller ones across the state.
"South Carolina has aggressively marketed itself in
the global market," said College of Charleston economist
Frank Hefner. Had it not, the state's job picture would be
The real estate market is strong, particularly on the
coast. While new home construction is sagging some and
the state has lost some construction jobs due to recent bad
weather, the market overall is strong, notes Charleston Realtor
John Settle III.
"The resale housing market is doing nothing but going
up, up, up and up," he said. "It's just phenomenal."
Some corporate profits are up. In news this month,
the South Financial Group, which owns Carolina First bank,
announced quarterly profits of 30 percent. South Carolina
Bank and Trust announced slightly higher profits. Arthur State
Bank of Union said it would open offices in Columbia because
of a better business environment.
And Sonoco, the Hartsville-based packaging giant, showed
quarterly profits that nearly quadrupled due to higher sales
and lower costs. Observers often say if basic product providers
like Sonoco are doing well, the economy of the near future
likely will do well. It makes sense - - if a company needs
more packaging, it probably expects to produce more.
WORLD: Spam, spam, spam
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Other news doesn't provide as much comfort:
Unemployment is up. South Carolina's unemployment
rate rose to 6.9 percent in September. Tourism and construction
jobs were down, but some seasonal jobs were up.
Not reflected in job loss figures for September were two
just-announced plant closings. Delta Woodside in Piedmont
said it would close a mill by Nov. 20, which would be put
361 people out of work. Nearby in Oconee County, Piedmont
Home Textile Corp. said it would close, which would leave
122 without work by the end of the year. Both closures reportedly
are due to foreign imports, a new wave of which is expected
to flood the market in January when quotas are lifted.
Fuel prices are up. Anybody knows gasoline is now
above $2 per gallon in many places. But energy experts predict
home heating costs to rise this winter because natural gas
futures are up more than 300 percent and coal prices are expected
to rise stiffly too.
As one top-level energy executive recently noted, higher
energy prices might dampen growth from higher sales and a
slightly rebounding economy. Ryan's Restaurant CEO Charles
Way told reporters recently he anticipated a difficult business
environment to continue because higher oil prices would sap
Hefner agreed that consumer confidence might go down if gas
prices hit $3 per gallon, but that wasn't likely. If prices
went, say, to $2.10 or $2.20, people would continue to spend
because Americans see travel as a necessity. He predicted
consumers likely would continue to spend - - even if they
had to go deeper in debt - - unless things got real bad.
The unpredictability of the economy presents a challenge
Wednesday to the state Board of Economic Advisors, which is
expected to present an economic forecast that is the first
step in next year's state budget-making process.
If the BEA is too conservative, lawmakers will face another
lean budget year and potentially cut more services, which
many already believe are on life-support. If forecasters paint
too rosy of a picture, lawmakers may face an easier time in
2005, but have shortfalls to deal with down the road.
10/24: Spam, spam and more spam
The latest from cartoonist Bill McLemore:
LEARN MORE DAILY
best way to get South Carolina news is to augment your morning
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SOUTH CAROLINA SCORECARD
Here's a "thumbs up" and "thumbs down" related to various
political events from the past week:
Tenenbaum. The Democratic State Superintendent is
holding her own in what appears to be a race coming down to
the wire. GOP nominee Jim DeMint, however, still seems to
McMaster. Hats off to Attorney General Henry McMaster
for a crackdown on dogfighting. Now if he could get out of
the people-fighting in the Carolina Investors case ...
Joblessness. The state's unemployment rate hit 6.9
percent - - not too good of a record for those in power.
Carolina Medical Review. The nonprofit shouldn't have
tried to link vaccinations with voting.
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Notes veteran lawmaker Sen. Glenn McConnell: "Statehouse
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