May 17, 2024

The Nerve Archive

Where Government Gets Exposed

Palmetto State’s Economy Improving, But Big Hurdles Remain, Economists Say

HurdlesSouth Carolina’s economy is moving in the right direction, though there is plenty of room for improvement, state economic researchers said Monday.

The S.C. Board of Economic Advisors reported that general-fund revenue collections since the start of the fiscal year on July 1 through November totaled nearly $2.8 billion, up $173.5 million, or 6.6 percent, over the same period last year.

The BEA had projected a 4.7 percent growth rate for the period. The board’s general-fund revenue projection through next June is nearly $6.7 billion, which represents 28 percent of the state’s total $23.6 billion ratified budget for this fiscal year.

The increase in revenues over the past five months was driven primarily by an 18.5 percent jump in collections of corporate income taxes, followed by increases of 5 percent and 4.7 percent in collections of sales and individual income taxes, respectively.

Meanwhile, state employment numbers also have risen recently. BEA economist Robert Martin reported that the state gained 34,500 jobs in October, noting that every job sector experienced an increase except for natural resources and mining.

But Martin also said that as much as half of those gains were seasonal or temporary positions.

“Some of these jobs will stay around; a lot of the jobs will go away in the next month or so,” he said.

The S.C. Department of Employment and Workforce reported that the state’s seasonally adjusted unemployment rate decreased in October to 8.6 percent from 9.1 percent in September, with the number of unemployed workers statewide dropping by nearly 11,000 to 183,024.

But the total labor force in the Palmetto State grew in October by less than 4,000;  and for the second straight month, the sector gaining the most jobs was government (an increase of 5,100 jobs in October), according to DEW records.

In comparison, the nation’s unemployment rate in October was 7.9 percent. The BEA reported that South Carolina currently has the nation’s 11th– highest unemployment rate, and that many people have left the labor force.

The state’s housing sector is still in a slow recovery, Martin said. While the number of sold homes is up 20 percent, average selling prices have declined, he said.

“People cannot qualify for those bigger mortgages that got us into the trouble back in 2008,” he said, referring to the mortgage crisis of 2008.

Going forward, Martin, continued, the “big question mark” for his office in making general-fund revenue forecasts is what Congress will do in the next several weeks regarding the “fiscal cliff,” a term referring to the economic effects that would result from automatic tax increases and spending cuts next year if an alternative plan isn’t approved.

Martin concluded that South Carolina’s economic progress overall was “nothing fantastic, but at least we’re moving in a positive direction.”

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