By Andy Brack | Statehouse Report
Published July 15, 2009
Slog through this month’s South Carolina business headlines and you might reach a surprising conclusion – that there’s an economic thaw going on.
“All of the indicators are certainly that the recession is losing its steam,” said Ken Goldstein, an economist in New York with The Conference Board. But, he added, it’s going to be a “long, slow, tough slog.”
While the state economy may remain tough for retail and this year’s tourism numbers remain unclear, just look at what’s going on in other major business areas:
Boeing announced it would pay $580 million for a fuselage plant in North Charleston, which could mean opening of a second production line and more jobs to get the 787 Dreamliner jet back on schedule.
A Korean company is looking at South Carolina and four other states to be the plant location to build a low-speed electric vehicle – an investment that could bring 2,500 jobs over five years. (Since BMW picked South Carolina in the 1990s, the state hasn’t landed a car plant as other states have upped the incentive ante; now with state budgets in the toilet due to the recession, South Carolina may be in a better competitive position because other states don’t have money to throw around, Goldstein said.)
An Australian fabric production plant is consolidating operations to its sister plant in St. Stephens.
Michelin, which has its North American headquarters in Greenville, has started a $1 million loan program to help small companies stay out of trouble.
In Bamberg, a company is investing $800,000 in a textile plant; in Summerville, a metal fabricating company is investing $2.3 million. Both mean more jobs for the area.
Other expansions are underway by Zaxby’s and Dunkin’ Donuts in the Columbia area and Fluor in Greenville.
On the down side, the old Georgetown steel mill finally appears to be closing after several years of see-saw existence.
But the point is that after months of a tentative business environment in which companies have downsized, consolidated and held onto their money, something more positive appears to be in the offing.
“We had a lot of announcements that were put on the shelf until the economy picked up,” said S.C. Chamber President Otis Rawl in an interview. “Maybe we’re seeing some of those come off the shelf now.”
He added the big winners from the economic downturn likely would be companies that had little debt before things started going south. Now, he said, they’re loosening the belt to do some additions and make changes when it’s comparatively less expensive to build or buy inventory than it was 18 months ago.
Frank Knapp, who runs the S.C. Small Business Chamber, agreed, noting there was a sense anecdotally that the state’s economy had hit rock bottom.
“I get the feeling now that people just are ready to get back to business,” he said. “Everybody was cautious; nobody wanted to do anything. I think the hunkering down part has gone out.”
Perhaps a silver lining for our part of the country is that it may emerge quicker from the recession than in the past. Through the years, South Carolina was slower to get in – and get out – of recessions because its economy was supported, in part, by a strong military presence, Rawl said. But now with a more diverse economy, it may be get back to a better business climate more quickly.
Goldstein said he thought the business environments of the Colorado-Nevada mountain region and the Carolinas-Georgia region were the two places that likely would start growing out of the recession earlier than the rest of the country.
Our region, he said, had advantages because of its support for building industries due to forest products (lumber) and furniture.
So while unemployment remains high in the state with one out of every eight South Carolinians out of work – and joblessness may stay high for awhile before it starts to go down – the silver lining appears to be a thaw that’s starting to melt the freeze that’s impacted just about everyone. Let’s hope we get back to normal quickly.