Economic Outlook Conference 2021: National and Regional Forecast

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Economic Outlook Conference 2021: National and Regional Forecast

Regional Economic Forecast

2020 brought on many unexpected challenges, propelling the nation into a recession, while unemployment rates hit record highs. However, the strength of our diverse economy has allowed the Charleston region to be resilient. While some sectors have seen tremendous losses, we anticipate a healthy recovery.

Here are a few highlights from the full regional forecast:

The region’s labor force remained stable overall during 2020. Local labor force is predicted to grow by 1% in 2021 and 2022, as employment grows at 2-2.5% each year, returning to growth levels of 7,000 to 9,000 jobs per year.
While retail sales saw an overall decrease of about 12%, consumer spending is indicating a positive outlook. It is forecasted that retail sales will see an increase of 2.5-3% this year.
Despite the pandemic, homes in the Charleston Metro Area sold at record levels in 2020. Local home sales are anticipated to increase by 3.5% in 2021 and 1.5% in 2022. The continued demand will also elevate prices as inventory shrinks, which will only further exacerbate our housing attainability crisis.
The Charleston International Airport’s 2020 activity was cut by more than half as both domestic and global air travel came nearly to a halt for many months. As 2021 progresses, travel is expected to begin to resume, with increased passenger volumes of about 10-15% each year as the world gets back to traveling.

“Before the pandemic, the Charleston region had a healthy, thriving economy,” said Jacki Renegar, Director of the Center for Business Research. “It is this foundation that will allow for a quick recovery. There have been many great lessons and innovations that will improve the resiliency of our region and ensure a prosperous future.”

To view the full recording of the presentation, click here.

To view the Regional Economic Forecast presentation,click here.

To view the Regional Economic Forecast book, visit www.charlestonchamber.org/economicforecast

National Economic Forecast

Anirban Basu, Chairman and CEO of Sage Policy Group, discussed some of the economic trends in 2020 that many of us may be intimately familiar with – a drop in GDP, massive job loss and total economic shutdown during the first quarter of the year. However, he also noted that for the most part we have seen a v-shaped recovery in most of these areas – the steep decline in March and April was soon followed by a steep incline. For example, total retail sales are up 7% from 2020 (although type of sales have shifted); national unemployment rate was 4.4% in March 2020, shot up to 14.7% in April and has dropped to 6.2% in February of 2021.

“We lost 4.3 million people in our labor force.”
Anirban Basu

Many industries and groups of people have been affected disproportionately and recovery is not happening at the same rate across the board – certainly we are not back to our pre-COVID economy, but overall we are trending in the right direction.

“Policy making differences have major implications.”
Anirban Basu

In order for an economy to flourish, both the supply and demand sides of the economy must participate; with additional stimulus forthcoming, demand gets a boost, but supply will be constrained by ongoing lockdown measures. As a result, the U.S. savings rate will climb once again, spring loading the economy for rapid growth once vaccines become more broadly available.

Overall, the back half of 2021 should be spectacular for economic growth. However, there will be a day of reckoning as deficit hawks come back into fashion, creating the possibility of greater austerity during the years ahead.

To view the full video of the presentation, click here.