COLUMBIA, South Carolina — South Carolina's economy will continue to grow at a moderate pace and residents will be in better financial shape in 2015, two University of South Carolina economists predicted on Wednesday.
"Consumers are in the best shape they've been in since 2008," said Doug Woodward, who along with Joseph Von Nessen released their 34th annual report on the state's economy at the Darla Moore School of Business in Columbia.
"If you liked 2014, then you'll like 2015," added Von Nessen. "We are finally seeing South Carolina hitting its stride."
The two said growth in the economy has been positive in most sectors, but that the housing sector continues to lag in many areas of the state.
Also, the "quality of jobs is not what we would expect to be right now," Woodward said.
Job creation is expected to continue at a rate of 1.9 percent, in line with the 2 percent growth rate recorded in 2014, they predicted.
While the manufacturing industry has been a major driver in the economy, the two men said they expect job creation to shift toward the leisure and employment services sectors. The top region to benefit from this growth has been the Myrtle Beach area, they said.
"Consumers are in better financial shape this year. Households are carrying less debt and their net worth has increased," their report said. "This means that consumers have more disposable income, which is increasing demand for tourism-related industries, especially in South Carolina's coastal regions."
Reduced energy prices and a drop in the price of gasoline has turned into a boon for consumers and portends additional economic activity, the two said.
The report added that real income growth is expected to remain relatively mild, with a growth rate of only 1.8 percent for the coming year.
It said real income across most regions in South Carolina has been consistently growing at a rate below the national average, which has been in the 2.5 percent to 3 percent range, Von Nessen said.
The economists said they expect the state's unemployment rate to decline to 6.3 percent over the coming year.
In October, it registered 6.7 percent, but the rate one year ago was 7 percent. The state's labor force has also increased to a historic high of nearly 2.2 million people.
But the economists warn that their positive outlook may be affected by the recent slowdown in the European economy and moderate forecasts for global economic growth.
"As a percentage of total economic activity, South Carolina exports more goods and services to Europe than most other states," the forecast said. "This means that we are more vulnerable to a European recession than other parts of the country."
The analysis revealed major gains in the employment services sector, an industry that includes employment placement agencies, temporary help services, contract labor and staffing firms.
Von Nessen said such an increase normally comes during the early part of an economic recovery "because uncertainty is high." He said this implies that businesses appear to be using staffing firms and contract labor as a long-term hiring model for building their workforce.
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