After Christmas, Anchor Sign had a brief, but expected, period when work tailed off. Then came spring, and the slump continued.
“We had an unusually slow March, April and May,” said Hank Cheves, president of the sign maker for Blockbuster Video, Kinko’s Copies and Gateway Computer.
Yet rather than brooding, Cheves is forging ahead. The company, which is located in the Charleston Neck and employs 85 people, is hiring this month as orders pick up.
Anchor’s upbeat outlook is not out of the ordinary locally.
The Charleston area had a seven-tenths percent manufacturing employment increase year to year, even as some analysts contend that U.S. factory production is in a recession.
The rising job figures take into account layoffs or shutdowns at Broyhill Furniture, Western Star Trucks, CertainTeed shingle makers and Quoizel lighting manufacturers.
Just last week, Westvaco annnounced it would shut down its paper mill and chemical operations in North Charleston for a week beginning today, citing market weakness. About 1,000 employees are affected.
Still, the manufacturing job growth is a pointed sign of the region’s flexible economy, according to local financial trackers and business leaders.
The Charleston area reaps dollars from tourists, shippers and contractors but also retailers, airlines and goods makers.
“We’re still bucking the national trend and moving ahead,” said Al Parish, economist at Charleston Southern University.
For corroboration, consider the quarterly economic forecast of Charleston Southern and the Charleston Metro Chamber of Commerce’s Center for Business Research.
According to the report, total employment in Dorchester, Charleston and Berkeley counties is accelerating, Parish said.
“It’s a little bit the big guys (hiring),” said Jacki Renegar with the Center for Business Research. But it’s also hundreds of small businesses adding two or three jobs, Parish said. The resulting net gain: 1,000 jobs a month, he said.
The forecast is not just numbers-crunching. It is influenced by working-world remarks from a panel of 21 business owners and professionals who review the findings. They adjusted two indicators, reducing projections for residential building permits and for automotive sales.
The Center for Business Research has developed a new category that may become an indicator. “Wider attraction attendance” tracks crowds at newer sites, including the South Carolina Aquarium, IMAX Theatre and the Charles Pinckney historic site. The current attraction attendance category follows a dozen established sites, including Patriot’s Point and the plantations on S.C. Highway 61.
What follows is a closer look at various sectors:
Employment and labor force
Even with an increase in the labor force, the Charleston area has more jobs than people to fill them.
The unemployment rate hovers around 3 percent compared with 5 percent statewide.
“We’ve seen some scattered things (layoffs) but nothing like I’ve seen at Greenville, Columbia, or the upper part of the state,” said Gary Crossley, area director of the S.C. Employment Security Commission and a member of the Economic Outlook Board.
“I wouldn’t say we are immune, but less vulnerable,” he said.
Employers are less picky about job seekers’ qualifications. In some cases, there’s just one requirement: “Breathing,” Parish quipped.
“You see a lot of openings in health care,” said Jack Dusenbury, chief executive of East Cooper Regional Medical Center and an outlook board member.
East Cooper has resorted to attending job fairs as far away as Illinois. The center, which employs more than 700 people, meets weekly on recruitment and retention issues and hired a recruitment and retention coordinator six months ago.
“Finding good employees is a challenge for all of us,” he said.
Job cuts expand the employment pool only temporarily. “When you get a national company with layoffs nationwide, they get jobs almost immediately from locally based employees,” Parish said.
Renegar suspects new jobs are a mix of high-paying and more moderate ones. But there are no hard and fast numbers. Wage data lags by more than a year, she said.
Construction and housing
Sectors in a decline include home building and sales. But the flattening out comes after a period of furious growth, Parish said.
“The only slowdown is new construction of residential buildings. It’s more of a normal rate,” Renegar said.
Jeff Bowers, board member and a broker with RE/MAX Professional Realty, said at an outlook board meeting that the era of local families upgrading to larger, fancier homes is ending, with most of the new growth coming from people moving into the region.
Meanwhile, the large stock of new homes on the market is cutting into sales of existing dwellings. Still, home sales and construction should continue to rise, given mortgage rates below 7 percent.
The dollar value of residential permits has slipped slightly as home prices have moderated, Parish said.
Tourism and lodging
Attraction attendance had a blip in the first quarter, tied to Fort Sumter building a new visitors center and chartering a new tour boat.
The wider attraction numbers showed seasonal movements with a decline from the third to fourth quarters and a flat first quarter. “In the second quarter 2001, it will probably go up,” Parish said.
After several boom years, lodging construction is taking a breather with just 500 new rooms coming on line this year.
Meanwhile, Renegar said, “The growth rate in room nights sold is in single digits. Demand is definitely catching up with supply.”
What’s kept hotel business strong is that the daily room rate is up 3 percent or more, including a projected average price of $122.50 in the second quarter.
“The daily rate is really saving hoteliers,” she said.
Charlestonians opened their wallets in the past year, with sales up 8 percent compared with a 2 percent rise nationwide. Parish cited newer shopping centers, such as Towne Centre in Mount Pleasant, that attract shoppers without drawing them away from other areas.
“The next place to go (commercial) is Daniel Island,” he predicted.
At the same time, he said, the totals are “kind of perverse.” Surging gas prices are a major component in the rising retail figures, which are based on sales tax receipts. Another less significant factor is rising hotel room tax income.
Automotive sales and leases
The slowing economy is more pronounced in car sales. First quarter totals are down from a year ago.
“It’s a more postponable purchase,” Parish said. “If you move here you look for a place to live but you have a car to drive.”
Graham Eubank, executive vice president of Palmetto Ford and a member of the outlook board, is predicting a sales pickup in the third quarter as the national economy is expected to improve.
“That’s the big problem now. They’ve got big inventories built up,” Parish said.
Forecasters expect an increase in arriving passengers at Charleston International Airport, primarily due to the addition of new airlines Trans World Express, and Air Canada with international flights to Toronto.
Even with more carriers serving the Charleston area, Delta has maintained an 85 percent capacity, Parish said.
The airport has kept up its passenger count even as Charleston remains one of the more expensive places to book flights. He said a mid-week round-trip ticket to and from Atlanta is $700, compared with $90 at Savannah.
But while leisure travelers will drive to Myrtle Beach or Savannah for the lower fares, business travelers – who make up the bulk of passengers – don’t have the time, he said.
Forecasters are predicting a slight increase in traffic through the port of Charleston into the fall. That’s after the port had a downturn in the first quarter of 2001, dropping 4 percent to 393,855 20-foot equivalency units, or TEUs.
The slowdown was caused in part by unseasonably cold weather nationwide in February.
Even with expected growth later this year, the docks aren’t keeping up with the 13 percent yearly growth rates in 1998 and 1999, Parish said. One problem he cited is a lack of room to expand.
State Ports Authority director Bernard S. Groseclose Jr., an outlook board member, said the port will run out of space in 2007 without expansion.
Port figures are based on TEUs, or how much traffic is loaded and unloaded based on the standard 20-foot container. Previously, the port had used tonnage figures. Parish said the new system is more accurate.
Tonnage figures tended to be biased toward heavy loads rather than light ones. “A truck could be a truck of feathers, or of lead,” he said.