[ ABOVE: Scott Baier anticipates strong growth for the state’s economy in 2016. ]
The South Carolina economy is poised for stronger growth in 2016 than the rest of the country, according to Scott Baier, Clemson economics professor and director of the BB&T Center for Education and Policy Studies.
Baier said the state economy could grow by 3 percent this year, about half a percent better than the anticipated economic growth for the nation as whole.
Manufacturing will continue to be one of the main factors driving economic growth, especially in the Upstate, he said. Although manufacturing across the country is struggling to grow, Baier said, “The trend in manufacturing in the Upstate has looked better than the national trend, and I think that will continue.”
South Carolina is attractive to manufacturers because it is a right-to-work state and the area labor pool is larger than in other parts of the country, he said.
Baier also expects significant growth in the professional services, education, health services and leisure industries.
Growth in these sectors would support other industries and help lower the state’s unemployment rate to under 5 percent, he said. South Carolina’s unemployment rate was listed at 5.5 percent in the latest employment numbers from the state Department of Employment and Workforce.
While Baier sees an optimistic year for the state, he said several factors could hurt the economy. The recent economic problems in China could have a ripple effect and cause growth nationally and in the state not to be as high. “It’s never clear when you see some disruption [globally] how quickly or if it will affect the economy, if at all,” he said.
The low gas prices could also hurt, even though low gas prices are generally viewed positively, he said, as low prices mean that oil companies are getting less of a return on the oil they sell.
In order to increase production and keep up profits, companies are taking on significant amounts of debt to acquire land for drilling, he said. The high debt leaves the oil companies vulnerable to defaulting on their loan payments.
On the consumer side, Baier said the low gas prices don’t necessarily mean that consumers will spend their money on other things until they are assured that the prices will remain low.
“I’m not going to go out and buy an SUV right away just because I see gas at $1.60,” he said.
