The rate of economic growth in South Carolina, and the Charleston area in particular, is slowing down, says an economist with the University of South Carolina.
“The bottom line is that we're expecting slower growth for the rest of this year and going into the new year,” Joey Von Nessen told the Palmetto Business Daily in a telephone interview. “And that's for a number of reasons.”
Among those reasons, he said, are the slower global growth that emerged in 2019, the uncertainly associated with the ongoing trade war with China and the end of the stimulus associated with the 2018 tax cut.
As opposed to the “stimulated” economy of almost two years ago, South Carolina is in what Von Nessen calls a “decaffeinated” economy—still growing, but at a less frenetic pace.
“On the flip side, we have a very strong labor market,” he said. “(It is) the best market that South Carolina and Charleston have seen in over a decade, and that is continuing to generate more employment opportunities and an increase in wages.”
Consumer spending is also strong, he added.
“So the economy, as we move forward, is still stable and consistent in terms of the overall growth that we're seeing, but it's just not going to be at the same level that we experienced in 2018," Von Nessen said.
According to Von Nessen, uncertainty about tariffs and overseas markets continues to loom, however. China and Germany are the state’s two largest markets, and one is of course in a trade war with the United States and the other is nearing a recession.
“It (the trade war) has affected South Carolina, if the tariffs continue and the trade negotiations continue to drag on, that is going to have a have an adverse effect on South Carolina's economy," Von Nessen said. "There's no question."
“We’ve seen some of that already. Export activity has declined since basically the summer of 2018, and we've also seen a decline in the workforce among many manufacturers, specifically among contingent labor.”
Agriculture, especially soybeans, has also taken a hit, he said.
Barring worsening trade relations, however, he said the state’s economy will continue to grow, just more slowly.
“Slower growth, on the margin may not be a bad thing, because given the strong labor market, it's hard to sustain these higher rates of GDP (gross domestic product) growth, so some tapering off is not necessarily a bad thing.”