Regional economic outlook points upward for 2007

More residents will be employed, more homes and commercial buildings will be constructed, more cargo will pass through the Port of Charleston and more visitors will keep the area’s tourism industry rolling.

These are some of the factors leading to a bright 2007 economic forecast for the Lowcountry, according to projections from the Charleston Metro Chamber of Commerce’s Center for Business Research.

“We continue to see new industries come to this part of the country and we’re seeing strong employment growth,” said Scott Moore, the center’s director. “A lot of positive things are going on in the economy.”

Even a negative thing—the decline in home sales, which in October were a little more than 2% lower than in October 2005—is not really that negative, Moore said.

“Obviously we’re having a decline in housing, but it’s a decline off a top-peak market,” he said. “So we’re still going to have excellent housing markets from an historical standpoint.”

Although the region’s 2006 economic statistics will not be compiled until early next year, the center has already launched its 2007 predictions.

Building permits

Some 9,750 building permits for single-family homes will be issued in 2007, along with 2,650 permits for new apartment units, according to the center’s projections.

Meanwhile, building permits for non-residential construction are projected to reach 1,850.

Total residential permit valuation will jump to $1.87 billion in 2007. Non-residential permit valuation will rise to $625 million.

Labor

The area’s labor force will grow to 324,000, with unemployment at 4.9%. As of the second quarter of 2006, the center’s most recent figures, the labor force totaled 307,000, with a 5% unemployment rate. In 2005, the area had a labor force of 300,036 and a 4.9% unemployment rate.

Next year’s employment is expected to grow in all industry sectors of the economy, Moore said, particularly in the sectors of hotel and hospitality; manufacturing; and real estate and construction.

Tourism and hospitality

Barring hurricanes hitting the Lowcountry during the summer season, nearly 1.8 million visitors will attend area attractions in 2007. Area hotels, motels, inns and bed-and-breakfast establishments will sell about 3.7 million room-nights. Average daily room rates will reach about $145, and occupancy rates will average 69.3%.

As of June of this year, the region had drawn 559,000 visitors, with hotel occupancy rates averaging 76.5%, daily room rates averaging $138.50 and about 1.85 million room-nights sold.

In 2005, the Lowcountry attracted about 1.7 million visitors, average daily room rates averaged $128.61, occupancy rates averaged 70.1% and about 3.4 million room-nights were sold.

Retail sales

Driven by the region’s population growth, its residential real estate sector and the tourism industry, total gross retail sales are projected to reach $18.7 billion by the end of 2007.

Through the first two quarters of 2006, gross retail sales had reached $9 billion. For all of 2005, that figure totaled $16.3 billion.

Port activity

In terms of cargo containers, the Charleston port is projected to handle 2.06 million TEUs, or 20-foot-equivalent units. In fiscal 2006, which ended June 30, that figure totaled 1.98 million, according to the S.C. State Ports Authority.

Increased trade with India, China and South America are driving the port’s increased TEU activity, said SPA spokesman Byron Miller.

Alliance outlook

As of October, 19 of the Charleston Regional Development Alliance’s 27 active industry recruitment projects fell within the alliance’s targeted industry clusters of biosciences, aerospace, automotive, creative industries and advanced security, according to David Ginn, the Alliance’s president and chief executive.

“We expect to have additional growth in the aviation/aerospace and automotive sectors as the Vought/Global Aeronautica and DaimlerChrysler projects ramp up production,” Ginn said. “We are also seeing growing activity in the biosciences sector, namely with alternative energy and life sciences-related projects.”

Increased trade with Asia through the Charleston port is drawing attention from national developers eyeing the Lowcountry for distribution parks and speculative buildings, which could lead to more activity in the region’s distribution sector next year, Ginn added.

Attending possible industry-recruiting events such as the BIO International Convention, a biotechnology event to be held in Boston, and the Paris Air Show are among the initiatives the Alliance has slated for next year, Ginn said.