Charleston Real Estate Blog

The Charleston economy is booming, outstanding job growth cited in two reports

The Charleston Post and Courier had two articles recently focusing on how well the Charleston economy has been doing recently. Perhaps that is one reason that the Charleston South Carolina real estate market has been holding up rather well despite the national reporting of doom and gloom in the housing market. Job growth and an overall trend toward population growth aided by the retirees who choose to retire in the Charleston area in addition to many buyers interested in a second home in the Charleston area have helped the real estate market weather some of the storm clouds being reported by the national media. That doesn’t mean Charleston is without problems on the housing front, it simply means that we are doing much better than many other locations around the country and a very good reason for that has been excellent job growth.

While I would normally like to link to the articles and just provide a snippet, the Post and Courier has not converted to free content like the New York Times online has finally chosen to do by supporting the content through advertising rather than charge readers for archived articles. Let’s hope our local paper can come to the same conclusion sometime soon.   

Numbers don’t lie: We’re a hot market by Michael Buettner

Economy in tri-county area diverse, growing rapidly

Signs of economic growth are easy to find around the Charleston region, and now the federal government has released a report that confirms that the local economy isn't just growing — it's booming.

The three-county area's economic output has grown faster in the past five years than South Carolina's and the nation's as a whole, with the latest year's increase ranking among the top 20 percent of metro areas nationwide, according to a first-of-its-kind report on metro area gross domestic product.

The value of Charleston's total output of goods and services in 2005, the latest year for which data is available, was $20 billion, making the Lowcountry the 81st largest local economy among 363 ranked in the report by the U.S. Bureau of Economic Analysis. That's up five spots compared to 2001.

Looking only at metro areas with economies the size of Charleston's or larger, the local area's growth rate ranked 22nd in the nation.

Among South Carolina metro areas, Charleston's 16.8 percent inflation-adjusted growth over that period was behind only Myrtle Beach's 20.1 percent increase. And in the latest year, Charleston's 5.4 percent jump was tops in the state and exceeded by only 63 cities nationally.

And while those numbers are impressive enough, they don't include some of the area's more recent high-profile corporate expansions, such as the Vought-Alenia aircraft manufacturing complex at Charleston International Airport, the ramping up of production and payrolls at armored vehicle maker Force Protection in Ladson, and the Google data center under construction near Goose Creek.

What they do reflect is the vitality of the area's highly diversified economy, said Frank Hefner, an economist at the center under construction near Goose Creek.

What they do reflect is the vitality of the area's highly diversified economy, said Frank Hefner, an economist at the College of Charleston.

Although Charleston is well known as a tourist destination, Hefner noted that the biggest contributors to the economic growth were manufacturing, information and finance.

"If you add up the contributions of all the different industries here, we really are the proof that in economic development, you shouldn't put all your eggs in one basket," he said. "We're diversified across many different categories."

What that diversity does is help protect the region from a slowdown in any one business sector, Hefner said.

"Having so many different kinds of growth areas, we're less susceptible to downturns," he said. "Even the housing market — we'll have a slowdown, but look at all the people moving into the area to fill all the jobs that are being created. That insulates us to some extent."

What a lack of diversification can mean to an area is illustrated by the Greenville region. Its 2 percent growth from 2001-2005 placed it in a tie with two other cities, including Detroit, at 335th in the nation. Like Detroit, Greenville's economy has been tied to manufacturing, and both areas have been hit hard with plant closings and job losses.

Nationally, the fastest-growing metro economy over the past five years was Palm Coast, Fla., which saw its economic output skyrocket 164 percent. Its total output in 2005 was, however, only about one-tenth the size of Charleston's.

Among cities Charleston's size or larger, the fastest-growing was Las Vegas, which posted a 31.2 percent increase in output.

At the opposite end of the scale, Lafayette, La., ranked lowest in growth, suffering a 10.7 percent decline in output since 2001.

For cities Charleston's size or larger, Wichita, Kan., saw its output fall 3.5 percent to place the area 358th on the list. New Orleans was close behind, posting a 3.2 percent decline; the Crescent City's economy shrank as much as Charleston's grew, 5.4 percent, in 2005, the year it was hit by Hurricane Katrina.

What's driving the Charleston economy

TOURISM: The visitor industry (top left) is no longer seasonal in Charleston. More than 4 million tourists flock to the region annually to gaze at historic homes, play golf, soak up the sun at local beaches or sample the city's fine-dining establishments.

MANUFACTURING: Companies such as the Vought-Alenia aircraft manufacturing complex (top right) have helped raised the region's profile as a manufacturing center. Vought makes large fuselage sections for the Boeing Co.'s new 787 Dreamliner passenger jet.

INFORMATION: The region's fledgling high-tech industry was given a big boost this year when Google Inc. (bottom left) confirmed plans to build a $600 million data center in Berkeley County, near Goose Creek. The company will create 200 local jobs and give the region bragging rights to a blue-chip employer and household name.

FINANCE: The homegrown stock-trading firm Automated Trading Desk (bottom right) was started on a shoestring in the late 1980s by two college professors, assisted by some students. This year the Mount Pleasant-based company struck a deal to be purchased by Wall Street giant Citigroup Corp. for a staggering $680 million.

Area’s job growth among best in nation by Katy Stech

Pulling rank

Some of the Milken Institute's "Best Performing Cities" based on job and salary growth over the past year

1. Ocala, Fla.

2. Wilmington, N.C.

3. Riverside-San Bernardino-Ontario, Calif.

4. Phoenix-Mesa-Scottsdale, Ariz.

5. Orlando-Kissimmee, Fla.

10. Raleigh-Cary, N.C.

11. Myrtle Beach-Conway-North Myrtle Beach, S.C.

12. Charleston-North Charleston, S.C.

23. Charlotte-Gastonia-Concord, N.C.-S.C.

Local job growth is outperforming other parts of the country.

Reflecting broader trends in the Southeast, Charleston was rated by the Milken Institute as the 12th-best metropolitan area in the country at creating and sustaining jobs, according to a new study by the California-based economic think tank.

Last year, the city was ranked No. 22.

The Holy City was among a handful of Southeastern cities that dominated Milken's "Best Performing Cities" list, which is based on job and wage growth. Myrtle Beach, Raleigh, Wilmington and five Florida areas also ranked highly.

None of the cities in the top 25 were in the Northeast or Midwest, the report pointed out.

"At least in the case of the Southeast, the cost of setting up a business would be relatively less expensive than other areas," said Armen Bedroussian, a Milken research economist. "There's obviously companies that want to set up shop down there in Charleston, and there's a good reason for that."

During the past five years, Charleston's employment base grew 7.1 percent faster than the national average, Milken found. Wages and salaries also outpaced the rest of the country by 13.7 percent during that period, though more specific figures were not included in the report.

According to the institute, Charleston's low cost of living relative to other cities "provides more opportunities for retirees outside the area, while its diverse industry base attracts skilled workers." Among the examples Milken researchers cited was the opening of the DaimlerChrysler van assembly plant in North Charleston.

It also noted strong growth in data processing and the telecommunications industry, presumably a partial reference to the $600 million data center that Internet search giant Google is building near Goose Creek.

As of August, the state's Employment Security Commission counted 1.936 million jobs in the Palmetto State, up 35,000 from the previous year.

The Milken study, which measures employment and salary growth over one- and five-year spans, is an annual update and ranking of those figures for the 200 largest metro areas in the country.

Columbia earned high marks for its dramatic job growth during the past year: The capital city's overall ranking jumped from 134th in 2006 to 69th this year.

Some areas of the Southeast might not do so well over the next year, Bedroussian said.

He predicted the nation's housing slump will hamper growth in some smaller metropolitan areas, which tend to feel the effects of national trends later than big cities.