Economists at the University of South Carolina’s Darla Moore School of Business have described the state’s recovery from its pandemic-induced recession as “already off to a good start,” but they hedged that optimistic outlook with a warning: “The state still faces significant economic hurdles in the coming months.”
The school’s 40th Annual Economic Outlook Series Event, which was presented during a livestream on Tuesday, Sept. 29, anticipated a bumpy road to recovery, one that will partly hinge upon the outcome of the U.S. presidential election.
“The pace of the economic recovery in the U.S. is likely to remain sluggish throughout the fall, especially as we head into a period of high uncertainty during the remaining few weeks until the election,” said Douglas Woodward, economics professor and director of the Darla Moore School’s Division of Research.
In response to that uncertainty, the school plans to host a second livestream event at the end of November to adjust its predictions based on the outcome of the election.
But so far, economists at the school have noted a quick rebound in at least some sectors of the job market. South Carolina has now recovered roughly 62% of the jobs that were lost during the mandatory government shutdowns between March and April. That’s a significant snapback compared to the nation as a whole, which has so far recovered just 52% of all jobs lost during the pandemic lockdowns.
But the pace of that bounce-back has not been consistent. South Carolina’s speedy recovery hit a wall in the middle of the summer, economists noted, with the pace slowing from July onward.
“After sprinting out of the gate in April and regaining many of our lost jobs, we’ve since dropped back to a modest but potentially more sustainable pace of recovery,” said Darla Moore School Research Economist Joseph Von Nessen.
Worth noting, however, is the breakdown of where that recovery was most prominent — and conversely, where it was not.
Although the residential housing market remains booming, and companies rooted in logistics and e-commerce are in some cases surpassing where things stood a year ago, most small businesses remain struggling across the board. That was especially true of businesses in the traditional retail, tourism, leisure and hospitality sectors.
“Most small businesses have limited financial resources to weather any economic downtown,” Von Nessen said. “But small businesses that provide in-person services in an era of social distancing have been especially vulnerable.”
The report also found that those without some form of postsecondary education were also being hit hard by the pandemic-induced recession — far harder than in past recessions, according to Von Nessen. For example, employment growth has risen by an average of more than 3% this year across all jobs that require some kind of education beyond high school, but for jobs that do not require secondary education, that number is down by 10%.
All in all, economists expected long-term market trends — such as increased automation, the movement towards e-commerce and the gradual shrinking of the brick-and-mortar sector — to continue at an increased pace due to the pandemic.
But a full recovery for South Carolina, they said, was still a way off.
“Given current market conditions, we don’t anticipate getting back to pre-pandemic employment levels before at least the summer of 2021,” Von Nessen said. “2021 will be a year of recovery.”