Slow but steady.
That's how South Carolina's economy is expected to perform this year, experts said Friday.
"If you felt good about 2013, you'll feel even better about 2014," said Bruce Yandle, an economics professor with Clemson University.
The Palmetto State and the Southeast will see continued population growth, stable employment and rising incomes, Yandle said.
But while things are looking up from a few years ago, growth in many sectors of the economy remains lackluster, said Frank Rainwater, chief economist for the state Budget and Control Board.
"If you look at the 50-year growth rates over time, we had higher double-digit growth rates before the recession," Rainwater said. "Now we're seeing slower, single-digit growth."
Personal incomes are a prime example, he said. They're increasing only modestly, which, in turn, affects income tax revenue.
The state's general operating fund is expected to grow by about 3.7 percent by 2015, Rainwater said.
And while income taxes support about 48 percent of that fund, the sales tax, which is the state's No. 2 generator of revenue, has yet to recover to its pre-recession strength.
"Even though the economy is going up in terms of personal income, the percent of that going to sales tax is declining," Rainwater said.
One reason is that the number of senior citizens is growing in South Carolina.
"We have an older population, and for the most part that mean's they've already bought houses, they've bought cars," he said. "They're spending more on medical ... than on cars or other products. It's just a change in consumption patterns."
Rainwater added that the rise of online shopping also is putting a dent in sales tax revenue because many websites don't collect state sales taxes. And most Internet shoppers don't voluntarily pay it, though they're supposed to.
Rainwater and Yandle were the keynote speakers at an economic forecast in Goose Creek sponsored by the Berkeley Chamber of Commerce.
They agreed that many key parts of the state's economy have recovered from the recession, and they are expected to keep improving this year.
For example, the state's unemployment rate has been steadily edging lower, falling to 7.1 percent in November, down from 7.5 percent in October.
Also, the state is attracting more new residents. In December, the Census Bureau estimated that South Carolina ranked No. 11 in the nation for population growth for the year ended in July.
This month, United Van Lines' annual migration survey ranked the state as the No. 2 inbound destination for relocations, behind Oregon. South Carolina was No. 5 last year.
"You can judge your state's value by the number of people who want to come live with you, or by how many want to get out of your sight," Yandle said. "We've got people coming our way. That's going to give us continued GDP growth. People are coming here, looking for prosperity."
Reach Abigail Darlington at 937-5906 and follow her on Twitter @A_Big_Gail
Notice about comments: