South Carolina's Economy Outperforms Nation Despite Adversity

Strategic Insights -

South Carolina's economy has consistently outpaced the national average, despite recent layoffs in the defense industry and economic struggles in traditional sectors such as textiles and apparel. According to the First Union Gross State Product (GSP), a newly released inflation-adjusted measure of economic activity, South Carolina's economy grew at a 5 percent rate on a year-to-year basis. The state's strong performance is attributed to its successful recruitment of new businesses, including the BMW assembly plant and several automotive suppliers.

Key Takeaways:

  • South Carolina's economy grew at a 5 percent rate on a year-to-year basis, outperforming the national average.
  • The state's strong performance is attributed to successful recruitment of new businesses, including the BMW assembly plant and automotive suppliers.
  • Despite layoffs at the Charleston Naval Base and the Savannah River Site, South Carolina's economy held up well, with a 4.7 percent annual growth rate in the third quarter.
  • The First Union GSP, released for the first time, is a quarterly estimate based on local and regional economic data, including employment statistics, personal income, and unemployment claims.
  • The state's strong tourism industry, including hotels along the coast, restaurants, and retailers in Charleston, Myrtle Beach, and Hilton Head, contributed to its economic growth.
  • First Union economist Mark Vitner attributes the South Atlantic region's slower third-quarter growth to higher interest rates, which weakened home sales earlier this year.
  • The region is expected to see stronger gains in the future, driven by improved mortgage rates and home sales.
  • The shutdown of the Charleston Naval Base resulted in the loss of 28,000 military personnel and civilian jobs, while the Savannah River Site restructuring eliminated over 4,000 jobs.

Statistics:

  • South Carolina's economy grew at a 4.7 percent annual rate in the third quarter.
  • The Third Quarter GDP, released late last month, showed the nation's economy growing at a 4.2 percent annual rate.
  • The South Atlantic region grew at a 3.8 percent annual rate in the third quarter.
  • On a year-to-year basis, the South Atlantic region expanded faster than the nation, growing at a 3.9 percent pace versus 3.3 percent for the nation.
  • South Carolina's economy has been one of the most successful recruiters of new industry during the 1990s.

Sources:

  • First Union News Release, November 30, 1995
  • Bureau of Economic Analysis (BEA) Quarterly GDP Release, Late October 1995
  • First Union economist Mark Vitner statement, November 30, 1995
  • Charlotte Observer article, June 1995 (not provided in the original text, but mentioned in the news release)
  • Federal Reserve and First Fidelity Bancorporation news releases (not provided in the original text, but mentioned in the news release)