South Carolina’s Economy: A Snapshot of Resilience, Growth, and Challenges
South Carolina entered the new year of 2024 with a robust economy and promising prospects, bolstered by thriving industries and favorable demographic trends. However, the Palmetto State’s economic journey was not without hurdles, primarily aging demographics, worker shortages, and high-interest rates.
In the early stages of the pandemic in April 2020, unemployment in South Carolina surged from a modest 3.1% to a peak of 11.7%, marking the highest rate since the Great Recession when it reached 12.1% in December 2009 (Bureau of Labor Statistics data). Contrastingly, the United States experienced a more severe surge with an unemployment rate hitting 14.8% in the same month (April 2020). By the year’s end, South Carolina had managed to bring its unemployment rate below 5%, while it took until September 2021 for the US to match that figure. As of December, South Carolina’s unemployment rate stood at a commendable 3%.
The state’s quick recovery was partly attributed to its swift reopening and the fact that it was not as reliant on air travel for tourism compared to other states. South Carolina’s economic growth, which clocked in at a robust 5.7% rate in the third quarter of the previous year, was primarily fueled by two sectors: advanced manufacturing (automotive, tire, and aerospace industries); and retail and distribution (warehousing, ports, and rail). Combined, these industry clusters boasted an impressive estimated economic impact of $48.3 billion and employed over 150,000 people, according to a study conducted by the University of South Carolina in partnership with the SC Council on Competitiveness.
However, South Carolina was not immune to the labor market challenges faced by many other US states. As of December 2023, there were nearly 2.3 jobs in South Carolina for every resident jobseeker, compared to a national ratio of 1.4. The significant population growth, which saw the state add over 255,000 residents since April 2020, was mainly driven by people over the age of 55. This demographic trend further complicated the workforce challenges the state was facing.
To address these challenges, South Carolina has taken a strategic approach, focusing on its extensive network of technical colleges and workforce development programs. For instance, Midlands Technical College in West Columbia reported a surge in demand for shorter-term workforce programs and saw a rise in apprenticeship opportunities. Provost Barrie Kirk noted that the college was witnessing more students interested in these fields, particularly for jobs in advanced manufacturing, healthcare, information technology, and skilled trades. Additionally, there was a notable increase in the number of women seeking education and employment opportunities in these industries.
The future economic growth in South Carolina is predicted to be driven by several factors, including its strategic location for importing and distributing goods throughout the Southeast. The state’s population growth, which ranked it as the fastest-growing state in 2023, is expected to continue fueling demand for industries such as healthcare. Several new hospitals are slated to open in the Myrtle Beach area, which has been named the fastest-growing place in the US for three consecutive years by US News and World Report. Health systems are also expanding their outpatient services to meet the demand, which requires a significant workforce.
Prisma Health, South Carolina’s largest healthcare organization with nearly 30,000 employees and over 1.5 million patients, has been actively working to bolster its talent pipeline through partnerships with schools. The organization begins introducing young people to careers in healthcare as early as elementary school and collaborates with high schools, technical colleges, and universities to train students for jobs in various healthcare fields. Prisma has invested $5 million in a nursing recruitment program at five universities and technical colleges in the state and provided a $1.5 million gift to Greenville Technical College for its Prisma Health Center for Health and Life Sciences.
Other industries are also grappling with labor shortages, forcing them to raise wages to remain competitive. For example, Kent International, the largest domestic supplier of bicycles to Walmart, now offers a starting salary of over $15 an hour and provides good health care benefits and an air-conditioned building. The company added 90 employees after securing a deal with Walmart last year to produce the new Ozark Trail model, which now accounts for nearly all of its annual production of roughly 225,000 bikes.
Despite the economic progress and positive industry trends, South Carolina residents expressed concerns about both their personal finances and the state and national economy according to a Winthrop University poll from May 2023. Many felt pessimistic about their financial situations and those of the nation, with a larger share of Republicans expressing these concerns.
In summary, South Carolina’s economy is showing signs of resilience and growth, despite facing challenges such as aging demographics, worker shortages, and high-interest rates. The state’s strategic approach to addressing these issues through workforce development programs, population growth, and industry partnerships is positioning it well for continued economic success.
