Charleston economy takes off

Charleston Post and Courier
Brendan Kearney
December 16, 2011

Continuing the region’s recent streak of national recognition, greater Charleston has been tagged as one of the economically healthiest metropolitan statistical areas in the country.

The Charleston-North Charleston MSA ranked 11th in the nonpartisan Milken Institute’s “Best-Performing Cities 2011,” up from 19th last year and from 30th in 2009.

Whereas other plaudits this year concerned Charleston’s traditionally strong tourism industry, the Milken survey released Thursday takes into account growth in jobs, wages and business output over the past five years to determine where the broader economic picture is bright.

Charleston climbed to just outside the top 10 on the strength of its “vibrant aerospace sector,” “stable military presence” and other high-tech, high-skill employers, according to the report.

“These rankings are the result of the investment that’s being made in the community, and I believe it is absolutely logical that as we ramp up our game … that we will move higher up in the ranking,” said Ernest Andrade, director of both Charleston Business Development and the Charleston Digital Corridor. “It really is cause and effect. You don’t get lucky in these rankings.”

Kevin Klowden, director of the Milken Institute’s California Center and one of the study’s three authors, called the North Charleston-Charleston MSA “an overall solid performer.” The city pairing is not dominated by any particular sector, which Klowden said is “actually a good thing in terms of the long-term sustainability of its performance.”

The report cited the Boeing Co. 787 assembly plant in North Charleston and its “positive ripple effects,” such as The InterTech Group Inc.’s decision to build a composites manufacturing facility along Palmetto Commerce Parkway. It also mentioned the region’s data-hosting services and the influx of retirees that will boost the MSA’s health-care operations.

Klowden said Charleston is well-positioned going forward but that the forecast is still “a mix.” He said Charleston’s port “creates a significant opportunity” because of the Panama Canal widening but that the slow growth of the global economy “sort of creates a cap in terms of how far it would go.”

Klowden also praised the area’s “thriving” technology scene but said Charleston still has a ways to go in that category. “It’s been doing pretty well in terms of high-tech growth, even though the overall concentration of high tech in Charleston is still a little bit below the national average,” he said.

Andrade expects further maturation, pointing to the Digital Corridor’s recent wage survey, which showed tech companies are hiring and paying above-average wages. “The issue really, for us, is not really the demand but the availability of the labor force,” he said, adding that he has “a pretty aggressive strategy” to bridge that gap.

While the Charleston area fared well, Columbia slipped from 65th last year to 115th this year. Armen Bedroussian, a senior economist at the California-based Milken Institute and a co-author, attributed the big drop to the slow recovery of the housing market in Columbia and its reliance on government jobs.

Charleston’s regional tech competition also sank in the rankings, with Atlanta dropping 19 spots and Raleigh-Cary, N.C., dropping to 14th from seventh. “Atlanta in particular is suffering from Sun Belt housing malaise,” Klowden said, adding that the telecommunications sector there also took a hit. Raleigh is “a slightly different situation,” Klowden said, because it’s usually not healthy for cities to stay in the top 10 for very long.

Texas dominated the overall rankings, led by San Antonio. Three other Texas MSAs filled out the top 5, and a total of nine made the top 25.

The high marks for Charleston from the Milken Institute are just the latest for the Holy City this year. In October, Charleston was named the nation’s top travel destination in North America by Conde Nast Traveler.

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