It was yet another go-go year for the seemingly unstoppable Charleston-area economy.
The highlights of 2019 run the gamut, from the uncertainties that a global trade war can stir up in a port city to a still-buoyant housing market.
The head of steam coming off the long-running U.S. economic expansion — it hit the milestone 10-year mark in July — presented some challenges as well.
For one, the labor pool continued to contract even further in 2019, making it tougher for employers to fill openings with qualified workers.
And real estate values kept on climbing, making the prospect of buying or renting homes and commercial space less and less affordable.
All in all, though, few would disagree that it was another exceptional run, as demonstrated by some of the high points and low points of the past year.
Tariffs were trending
President Trump’s tariffs on Chinese-made goods were expected to dent cargo shipments through U.S. seaports. Not so at the Port of Charleston, which continued to set records even in the face of a bitter trade war.
The State Ports Authority moved 1.36 million containers across its docks in the fiscal year that ended June 30, breaking the previous mark set the year before. Then, in August, the port set an all-time high for a single month by moving 233,110 cargo boxes.
CEO Jim Newsome credited the port’s Southeast location, where manufacturing and population continue to grow, for its ability to buck expectations. He projected that efforts to diversify the local cargo base will continue to pay off.
Hoping to rein in some of the tourist-fueled growth on the peninsula, Charleston changed the rules for future hotel projects in an effort to restore some balance to the downtown market.
The prospect of an "overconcentration" of guest rooms has worried many local residents for years, but the issue reached a head in February when a proposal for a 252-room lodging on Meeting Street was approved. Some members of the zoning board that voted for it said they thought it wasn't a good idea but felt their hands were tied under the old rules.
The revised ordinance is supposed to give that board more teeth and more power to deny projects. Also, the updated regulations were crafted to prevent hotels from displacing existing offices, residences and retail space. In addition, a new cap will allow just four more large hotels to be built in the area of the peninsula set aside for so-called full-service properties.
An already tight employment market got even tighter in 2019, as South Carolina's jobless rate sunk to its lowest point on record as the year wound down.
In September, unemployment dipped below 3 percent for the first time. It edged lower in October, when it went to 2.6 percent, before slipping even further the next month to 2.4 percent, or the second-lowest figure in the country.
The tight labor market has meant some job seekers who normally would struggle to find employment, such as people with criminal records, had an easier time getting on a payroll. Experts have also warn that the ultra-low jobless rate is likely acting as a bottleneck for business growth.
In another sign of Charleston’s emergence as a global tourist destination, the region snagged its first regularly scheduled trans-Atlantic air service, with British Airways launching a seasonal run between the Lowcountry and London.
The twice-weekly U.K.-S.C. flights on a Boeing 787 kicked off in April and ended in October.
The carrier already has announced it will be back in 2020.
Boeing’s North Charleston campus quelled its second labor union challenge in three years when the National Labor Relations Board overturned an election by flight-line workers who wanted to join the International Association of Machinists.
The board’s Sept. 9 ruling said the flight-line segment couldn’t be culled from the rest of the 787 Dreamliner assembly plant’s staff, which had turned back a union challenge by a 3-to-1 margin in 2017. The union, in what it has acknowledged is a long shot, has filed a lawsuit in the hopes of reversing the NLRB decision.
The defeat further cemented South Carolina’s standing as the nation’s least-friendly place for organized labor. Just 2.7 percent of the Palmetto State’s workforce belongs to a union, according to the Bureau of Labor Statistics.
As the year wound down, it turned out that keeping the North Charleston site union-free wasn’t Boeing’s biggest challenge. The deadly crashes of two 737 Max planes grounded its most important jet program as evidence the company put profits over safety eroded confidence in the planemaker. Two days before Christmas, the ballooning crisis cost CEO Dennis Muilenburg his job.
Retail in transition
More national retailers threw in the towel in 2019 as some merchants found they couldn’t compete with Amazon and online merchants in the age of click-and-order.
In South Carolina, the long-ailing Kmart chain shuttered its last remaining stores, disappearing from the landscape along with Fred’s, Payless ShoeSource and Dressbarn, among other struggling merchants.
Symbolic of the struggles of big-box retailers is a new plan to remake Citadel Mall, which lost Sears and J.C. Penney in recent years. Investors in the West Ashley shopping center unveiled their “Epic Center” plans to reinvigorate the property with hotels, offices, businesses and multifamily uses in much of the underutilized parking areas.
Real estate record?
The housing market showed signs of slowing down in 2019, but the Charleston region could still set a new record nonetheless.
The magic number is 1,401: That’s how many deals will have to close in December to hit the new high-water mark.
Meanwhile, more apartment complexes opened and are on the rise, and large housing developments continued to flourish in the growing suburbs. Lower interest rates and booming employment helped to spur the demand for more housing in a region grappling with affordability because of the disconnect between salaries and housing costs.
The aftershock from the failed $9 billion V.C. Summer nuclear plant expansion coursed it way into 2019, taking down one of South Carolina’s few publicly traded companies.
The $14.6 billion shotgun sale of SCE&G and its parent SCANA Corp. to Virginia’s Dominion Energy took effect in early January, about 18 months after the wounded Cayce-based utility companies walked away from the Fairfield County project, which was riddled by delays and insurmountable cost overruns.
The familiar SCE&G brand began to fade by the spring.
Expansion was just what the doctor ordered for the health care industry in 2019.
For starters, the Medical University of South Carolina expanded its horizons, sealing a $137 million purchase of four hospitals in mostly rural areas across the state. The acquisition marked the first expansion for MUSC outside of the Charleston region.
Meanwhile, rival health system Roper St. Francis didn't venture quite so far for its latest growth play. It opened its long-planned and much-delayed hospital in Goose Creek.
The $119 million, 50-bed project, which was bogged down for years by legal challenges, gave Berkeley County residents access to their first full-service medical center in more than four decades.
The dwindling ranks of banks that call South Carolina home marked a reluctant statistical milestone in 2019, slipping below the 50 mark for the first time in recent memory.
The $37.5 million sale of tiny First South of Spartanburg to Raleigh-based giant First Citizens took the figure under the half-century threshold.
It was just the latest in a flurry of mergers and acquisitions that have slashed the number of U.S. banks to less than 5,400 from about 8,300, or about 35 percent, since the last recession more than a decade ago. Over the same period, the lineup of South Carolina-based lenders has declined at an even quicker pace, to 49 from 107, or 54 percent, according to the Federal Deposit Insurance Corp.
Among other factors, rising costs tied to online banking investments and regulatory compliance are prodding small banks with less access to capital to consider sales and other exit strategies.
After six years of planning and delays, work began on the Charleston Tech Center, a $54 million development to lure and house promising technology upstarts.
The city of Charleston bought the land at 997 Morrison Drive in 2013, initially planning to open the innovation hub in 2016.
Work finally began in July. The Charleston Digital Corridor, a nonprofit that promotes the local tech sector, is spearheading the project and will lease an entire floor in the 92,000-square-foot structure. The hope is that the center will help attract and nurture a new crop of high-wage tech employers.