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2010 Outlook for the South Carolina Economy PowerPoint Presentation
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2010 Outlook for the South Carolina Economy - PowerPoint PPT Presentation

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2010 Outlook for the South Carolina Economy
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  1. 2010 Outlook for theSouth Carolina Economy Recovery or Relapse? Doug Woodward Division of Research

  2. 2010 U.S. Outlook • 2009 was year of government activism. • Massive fiscal stimulus. • Low interest rates. • Direct monetary intervention in credit (mortgage) markets. • There will be a recovery. • But slow growth for private sector activity in 2010. • Relapse?

  3. South Carolina’s Economic Prospects in 2010 Boeing is big. Leading economic indicators look good.

  4. Uncertainty • Dysfunctional financial system • Leverage and debt • More surprises? • From excessive credit to no credit • Despite bailouts • Choking private expansion

  5. A Lasting Recovery … No Relapse No more financial shocks Virtuous cycle of U.S. GDP growth Spending Investment Jobs

  6. Dr. Doom: No Lasting Recovery • Predicted recession • Possibility of a W-Shape rather than V- or U-shaped. • Unemployment rates in the mid-double digits • 15% or above unemployment rate, with and multi-year stagnation in economic activity. http://www.rgemonitor.com/

  7. V-Shape?

  8. Keys to a Sustained Recovery • Monetary and fiscal stimulus will fade • Consumer spending • Sales • Private investment • Risk taking

  9. S.C. Real Retail Sales‏ 12-Month Moving Average

  10. 07/08 08/09 (up to Oct)‏ 7.3% -14.3% Anderson 0.8% -14.9% Charleston-N Charleston -0.6% -11.9% Columbia 5.3% -11.6% Florence 2.6% -15.1% Greenville -6.0% -13.3% Myrtle Beach-Conway-N Myrtle Beach 5.6% -4.1% Spartanburg -3.4% -12.3% Sumter South Carolina Metro Areas (MSAs):Real Retail Sales

  11. Business Investment

  12. Source: U.S. Department of Commerce: Census Bureau.

  13. S.C. Growth of Single FamilyHousing Permits

  14. Monetary Stimulus Needed • Trillions from U.S. Treasury and Fed • Liquidity • Low, low rates • Extra monetary easing by Fed • Credit crunch continues • A solvency problem?

  15. $800 billion, with half still unspent Shovel-ready projects Infrastructure Restoration of state cuts Short-term: Multiplier effect Long-term: Comb-over effect Fiscal Stimulus

  16. Forecast for South Carolina’s Economy in 2010

  17. Outlook for 2010:Personal Income

  18. Outlook for 2010:Total Employment

  19. Difference %Change 1,100 1.1% Government -26,600 -11.2% Manufacturing -6,700 -2.9% Retail Trade 4,400 2.0% Professional & Business Services -8,000 -3.8% Leisure & Hospitality Services -1,000 -0.5% Education and Health Services -16,900 -14.9% Construction -3,200 -3.0% Financial Activities Employment Growth by Sectors of Activity 2008/2009

  20. Oct 08 Oct 09 %Change 62.8 61.4 -2.2% Anderson 300.8 292.9 -2.6% Charleston-N Charleston 364.2 361.2 -0.8% Columbia 87.9 87.2 -0.8% Florence 320.1 309.5 -3.3% Greenville-Mauldin-Easley 120.7 116.1 -3.8% Myrtle Beach-Conway-NMB 129.0 124.7 -3.3% Spartanburg South Carolina Metros (MSAs):Total Nonfarm Employment

  21. Outlook for 2010:Unemployment Rate

  22. Conclusion • Fragile recovery. • Distress in the financial system. • Running out of tricks. • Weak job market. • Slow growth in income. • Relapse possible.

  23. Additional information available at: http://mooreschool.sc.edu/moore/research/ Thank you!