COLUMBIA, S.C. (AP) — South Carolina's economy is stable but will remain fragile through the coming year, with employment expected to inch upward 2 percent, University of South Carolina economic experts said Wednesday.
Researchers Joey Von Nessen and Douglas Woodward presented their economic forecast for 2012 at the University of South Carolina's Darla Moore School of Business.
"Although we're on course for another positive year of growth and recovery, the economy is very delicate right now, and any increase in market uncertainty has the potential to knock us off course if it paralyzes business and prevents them from investing and hiring," Von Nessen said.
The researchers said positive economic indicators are present, but a combined effect of the debt crisis in Europe, an uncertain stock market and an election year could dampen business and consumer confidence levels.
Nevertheless, there are no indications at this time that the economy is slipping back into recession, Woodward said.
South Carolina's unemployment rate fell for the second straight month in October to 10.5 percent.
The durable goods market and manufacturing industries will have the biggest employment gains in 2012, although business and health services will likely see increases as well, the researchers said.
Housing and construction also will play a big role in South Carolina's recovery, they said.
"Household formation is significantly below historical averages because unemployment is high," Von Nessen said. "As job growth rises, this will help spur demand in the housing industry, which is very important to the recovery because construction and housing services make up more than 15 percent of overall economic activity."
Von Nessen said construction is expected to drop slightly in early 2012 and then increase throughout the rest of the year.
Projected job growth in 2012 will help reduce South Carolina's current unemployment rate, which is the sixth highest in the nation, but the rate will not fall quickly, Von Nessen said.
"Job growth and economic recovery will attract people back into the work force who left because of a lack of employment opportunities," Von Nessen said. "This will keep the unemployment rate higher than might otherwise be expected."
Their prediction for a 2 percent employment growth comes on top of a 1 percent gain in 2011, which the economists predicted a year ago.
The researchers reported that 2011 total employment growth was positive throughout most of the state.
The biggest gains came in Myrtle Beach at 2.6 percent, Anderson with 2.3 percent, Columbia with 1.6 percent, Florence at 1.2 percent, Greenville at 0.9 percent, Charleston at 0.9 percent and Spartanburg with 0.7 percent. Sumter had virtually no change in total employment over the last year, they said.