Charleston’s diverse economy has kept the metro region afloat during the pandemic, according to experts at the 30th Annual Economic Outlook Conference, presented by the Charleston Metro Chamber.
Jacki Renegar, director of the Center for Business Research, and Alan Shao, dean of the School of College of Charleston reinforced the resilience of Charleston’s economy at the event, presenting data from key economic indicators that drive the region’s economy. They gave their predictions for 2021 and 2022 in the 2021 Economic Forecast (.pdf).
“Before the pandemic, the Charleston region had a healthy, thriving economy,” Renegar said. “It is this foundation that will allow for a quick recovery. There have been many great lessons and innovations that will improve the resiliency of our region and ensure a prosperous future.”
Thirty years ago, Charleston was heavily focused on military and tourism, but when the Naval Base closed in North Charleston, thousands of jobs were lost.
Since then, the region has been purposeful about diversifying its economy, and the strategy has led to the metro’s successful growth, Renegar said. Between 1990 and 2019, Charleston’s population has increased 58%, the labor force 66% and private sector employers 73%, according to the forecast data.
Along with the economy’s resilience, the Charleston region’s labor force has remained stable overall in 2020. Though area unemployment hit a high of 12% last April, it is now back to pre-pandemic levels of 4%.
Sectors that have seen increases between January 2020 and December 2020 include financial activities, natural resources and construction, and trade, transportation and utilities.
Over the next two years, the labor force is forecast to grow by 1%, as employment is anticipated to increase 2% to 2.5% annually, returning to growth levels of 7,000 to 9,000 jobs per year, the forecast determined.
In total, the forecast predicts an increase of 28,000 new jobs in the next five years.
While the Charleston Metro Area’s total retail sales were down 12% year-over-year at $27 billion, home sales hit record levels in 2020.
Renegar attributes the industry boom to favorable prices, low interest rates and people spending more time at home. Renters looked to buy and many homeowners upgraded or downgraded based on their new needs.
The chamber’s forecast through 2022 is for home sales to increase by 3.5% in 2021 and 1.5% the year after.
Charleston’s leisure and hospitality were hit the hardest of all the region’s sectors. Only 60% of rooms were sold in 2020 compared to the year before and employment was still down 26.5% as of December.
Charleston International Airport was further affected by the lack of non-essential travel and reported activity was down 59% in 2020 with just about 2 million passengers. The previous year’s 4.8 million neared record highs.
With unprecedented disruptions, each sector learned during the pandemic, whether it was how to navigate supply chain disruptions or to pivot business models, Renegar said. But the region’s successful diversification will keep it resilient.
“We’ll still be a travel destination for sure. We’ll still make planes and build cars. We’re still going to have our port and it will probably get better from here because of the shift in e-commerce and logistics,” Renegar said. “Foundationally, I’d say our pillars are in place.”