Coming out of the dramatic economic slowdown of the COVID-19 pandemic, South Carolina’s economy has become and will remain much better, according to Dr. Bruce Yandle, adding that “there’s a lot of strength behind this economy.”
Dr. Bruce Yandle
Yandle, who is dean emeritus of Clemson University’s College of Business and Behavioral Sciences, recently addressed the outlook for South Carolina’s economy during the SC Community Development Association’s Annual Meeting.
At the same time that the economy has shown strength, it has remained in an unusual situation, with shortages of materials impacting manufacturing, and shortages of labor resulting from the substantial loss of labor participation early in the pandemic and the societal changes that have
come since then.
“This year has been a very tough one for a lot of people. A lot of us have lost loved ones, good friends, and family members to the coronavirus itself,” he said. “A lot of people have suffered because of interruptions to their lives and in their work. Sometimes it’s because schoolchildren were at home, and one of the parents or both had no choice but to alter life.”
Even with an economy changing through the ordeals of the pandemic, he said there has been innovation as a result of it.
“We are learning that we can do things at lower costs, in some cases, working from home than we did when we went to work [in person],” he said.
He noted that estimates of growth in gross domestic product had been improving, and the large sums of stimulus money available through the American Rescue Plan will contribute to this further. The forecast from the Congressional Budget Office in February predicted GDP growth of 3.7% in 2021 and 2.4% in 2022. In May, Wells Fargo predicted GDP growth of 6.4% for 2021 and 5.7% for 2022. Growth in employment, which cratered in early 2020, has improved, with South Carolina outperforming North Carolina and the nation. At the same time, the growth of population in the South continues its trend of outperforming other regions, which dates back to about 1950.
“The South has become the nation’s most populous region, and a lot of people are coming our way,” he said. “People vote with their feet. It’s the highest compliment another family or group can pay is when they say, ‘I think I’m going to move my stuff down to your neck of the woods.’”
Yandle stressed that economic trends tend to not be consistent across geographic regions. When reviewing year-over-year changes in payroll growth ending in April 2021, he pointed out that the Charleston area was down 5.31%, the greatest decline in the state.
“Charleston, in this case, is the big negative. Why? Because tourism was hit hard,” he said.
Reflecting on the economic advantages of the South, he said that the region has attractive cities with relatively low density — important in a time where many people have stressed social distancing. The region also has the benefit of a young, skilled and adaptive workforce, he said.
In reflecting on whether to be pessimistic with lingering pandemic problems and even political division, Yandle said he saw many reasons to be optimistic. These include a “flurry” of small business startups since the pandemic, he said, and they need support and room to grow.
“There is a literal explosion of small businesses occurring in South Carolina,” he said.