USC professors offer economic forecast for 2013
COLUMBIA — University of South Carolina economists predicted Wednesday that the state will enjoy stable economic growth in the coming year, but only if Washington politicians reach agreement on spending cuts and taxes to avoid the so-called “fiscal cliff.”
Researchers Joey Von Nessen and Douglas Woodward said they expect job growth of 1.2 percent in the coming year and the increases to occur across a broad array of industries.
“Though manufacturing has largely been responsible for South Carolina’s economic recovery, we’ve started to see other industries expand this year, and we expect more diverse growth in 2013,” Von Nessen said.
Von Nessen and Woodward released their annual predictions for the state’s economy during a conference at the Darla Moore School of Business.
Von Nessen said he expects growth in the transportation, warehousing, health care, education and even construction sectors of the economy.
The state’s jobless rate is at 8.6 percent, the 12th-highest unemployment in the country. But the October figure was the state’s lowest jobless rate in four years.
Von Nessen said projected job gains in 2013 should come from temporary hiring and contract labor.
“Residential construction turned a corner in 2012,” Von Nessen said. “Sales activity is up and house prices are rising again, which suggests a better year for housing ahead.”
Von Nessen said the pace of construction will increase through 2013, and he anticipates job growth in the industry for the first time since 2008.
He warned that the “fiscal cliff” means the state and nation face prosperity or peril depending on the actions of Congress and the White House.
“The demand is there, but the resolution of the fiscal cliff is a major piece of the puzzle that remains,” Von Nessen said.
If the politicians are not able to come to an agreement on the so-called “fiscal cliff” talks, the economist said South Carolina is sure to feel the effects because of potential increases in tax rates, payroll taxes or reductions in federal funding.
He said this is due to the large effect that could occur because of a potential elimination of extended unemployment benefits, or the major cuts in the military spending would come if no agreement is reached.
The “fiscal cliff” refers to the Dec. 31 deadline to stop the expiration of Bush-era tax cuts and separate across-the-board spending cuts that are the result of Washington’s failure to complete a deficit-reduction deal last year.
Susanne M. Schafer can be reached on Twitter at http://twitter.com/susannemarieap