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SC economy expected to see full COVID-19 recession recovery in 2022 USC economists say

joey von nessen

University of South Carolina economists Joey Von Nessen, left, and Doug Woodward, right, predict a full economic recovery from the COVID-19 pandemic for South Carolina in 2022. The two spoke as part of the school's annual economic outlook conference Dec. 7 in Columbia. Jessica Holdman/Staff

COLUMBIA — South Carolina companies are employing more people now than they did before the arrival of COVID-19, making it one of only 11 states to have completely recovered its pre-pandemic workforce, according to University of South Carolina economists.

That, along with a rise in consumer spending and goods produced, has experts predicting a return to full financial health in the new year, particularly for the coastal regions and the Upstate.

In fact, in South Carolina as in other states across the country, unprecedented federal aid has led to a recovery so fully felt that a tight labor market is once again one of the main issues holding back further growth, economists Joey Von Nessen and Doug Woodward told attendees of USC's annual economic outlook conference.

The total size of South Carolina's labor force is now 1.8 percent above February 2020 levels and unemployment is below 5 percent.

Feeding its growing labor market, South Carolina had the second-largest in-migration rate in the country, both in 2020 and 2021.

"So the question becomes then: Why are businesses struggling to find workers if both of those are a reality?" Von Nessen asked. "The short answer to that is demand. Demand has been very strong for both goods and services."

For every three people who moved here, two were age 55 or older. 

"All three of them are going to be purchasing goods and services but only one of them is likely to be in their prime working years," Von Nessen said.

Nationally, consumer spending on goods alone is up 25 percent over early 2020.

"This has been great news for South Carolina manufacturers over the past year because this represents growth in demand for the products that they are supplying," especially vehicles, Von Nessen said.

By contrast, in the aftermath of the Great Recession in 2008, it took South Carolina and much of the nation six years to fully recover its employment losses.

"This (coronavirus) was a recession that was induced, not because of any economic failing, but rather because of a government-imposed shutdown. And, so, as a result, when the economy reopened, it was able to do so far faster than what we would normally expect, following a standard recession," Von Nessen said.

One area of the state that continues to lag is in its Capital City, Woodward said. While the Columbia area has grown its population, it has not matched that of other major metros over the past decade.

Charleston and Greenville have started to mature, attracting younger, workforce-aged residents. But Columbia, with its multiple universities, including the University of South Carolina, has struggled to hold on to the talent it produces.

"They like Columbia but they just don't see the job opportunities they see in the major urban areas," Woodward said of his students, who look instead to places like Charlotte and Atlanta.

As a result of its stagnant growth, the city has slipped in other economic metrics, like home values, Woodward said. Among the state's larger towns, only Sumter has seen less home value appreciation, he said.

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Reach Jessica Holdman at Follow her @jmholdman on Twitter.

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