Key end-of-year moves by Boeing and the Clemson wind turbine project toughened an already strong local manufacturing posture.
That's among the standout findings from NAI Avant's Charleston Industrial Market Report for fourth quarter 2013.
Derek Mathis, senior broker with the commercial real estate firm's Charleston office, authored the update.
"Not unlike the third quarter, we continue to see the local economy outperforming national averages in key areas such as home building, construction and job growth," says Mathis, noting that increased employment stands to be the best economic indicator.
Solid automotive, housing and durable goods markets are driving steady growth in the national manufacturing sector, he says.
Likewise, state jobs increases are resulting from another round of manufacturing expansions. Mathis says the size of the workforce is expected to increase 1.7 percent in South Carolina this year.
In the past three years, South Carolina unveiled 233 manufacturing expansions showcasing 26,000 new jobs and $9.5 billion in investment.
The state's latched on to a trend of "re-shoring" jobs to the U.S. that had previously gone overseas. Sparking the trend are "a weaker dollar, increased shipping cost due to oil prices and closing of the wage gap between Chinese and U.S. workers," Mathis says.
Major companies such as Michelin, Colgate-Palmolive and Chinese textile outfit Keer Group revealed big expansions in the fourth quarter, showing that South Carolina continues to attract interest from super-large manufacturers.
In the Charleston area, Boeing aircraft maker generated the most buzz in the fourth quarter "due to recent announcements and high expectations for 2014," he says.
"With large land acquisitions recently completed and the announcement that in fall 2014, the (stretch) 787-9 will be assembled in the South Carolina factory, we can expect Boeing to be a significant economic driver for years to come," Mathis notes.
The Charleston port, meanwhile, played a prominent role in the region's industrial growth. Container traffic rose more than 6 percent in November, he says, and export growth caused container volume to jump 12.5 percent year over year.
"Shipments of agricultural products, particularly grain, were a significant driver of export gains," he says. In fact, agricultural exports have surged 16 percent since 2009. That's prompted SC Ports to add five transload operations in the past three years, he says.
The port also benefited from a pumped up tire industry. Michelin opened an 800,000 square foot tire plant in Anderson County to make earthmover tires, which will primarily be shipped overseas via the State Ports Authority cargo terminals, according to Mathis.
Paralleling the port growth, Boeing announced it would add 300-400 research jobs in its Center for Manufacturing Technology in North Charleston. The positions are part of the 2,000 new jobs Boeing promised in the $120 million incentive package it was offered in the spring, he says.
Boeing now employs about 6,100 people at the 787 Dreamliner campus, Mathis says.
Separately, Clemson University in November dedicated an $100 million, 82,000-square-foot wind turbine operation - named the SCE&G Energy Innovation Center.
The plant, set up on the former Navy base property in North Charleston, would test large drivetrains for offshore wind farms. It will employ about 70 people and house another 200 graduate students. "The goal is to attract other energy-related businesses to cluster on the campus," he says.
In terms of industrial construction, Mathis sees moderate growth this year. Limited availability of top-notch distribution buildings and warehouses constrains the market, "but we anticipate speculative space to come on line in 2014," he says.
Mathis expects 200,000 to 300,000 square feet of distribution space and 100,000 square feet of flex space to open up by the end of the year.
. Expect more industrial building sales, following three such transactions taking place in late 2013 in the Summerville area priced from $50 to $70 a square foot. Tenants are looking to own to take advantage of favorable financing and incentives, he says.
. Piggly Wiggly's fall disclosure that the grocer would move out of its 612,000 square foot distribution center "adds a significant amount of available space in the Jedburg sub-market," Mathis says. He expects the building to fill up before any new construction occurs in that area.
. In October, American Tactical Imports said it would relocate gun manufacturing and distribution operations from Rochester, N.Y., to Eastport Industrial Park in Summerville. The company will invest $2.7 million and will create 117 jobs. The Charleston area may see another "large" gun manufacturer announce a move here in the next two months or so, he predicts.
. Mathis foresees a defense sector slowdown from "SPAWAR making cutbacks and pulling its program managers out of private sector lease situations and putting them into government owned space."
All the same, "we expect a strong first quarter in the industrial real estate sector with increased demand driving rents and land prices," he says.
For more information, visit www.naiavant.com.
Reach Jim Parker at 937-5542 or email@example.com.