Presented by South Carolina Federal Credit Union

Nationally and regionally, we are weathering a tremendous impact to our economy. Each year in March, the Chamber releases an Economic Forecast – this year’s was released before we truly knew what 2020 held.

This high impact panel discussion using data from the Chamber’s Center for Business Research and national modeling provides an update on our national and regional economic outlook as well as a look a local lending and banking trends.

Panelists:

• Joe Grech, Chief Financial Officer, South Carolina Federal Credit Union
• Jacki Renegar, Director, Center for Business Research
• Mark Witte, Ph.D., Professor of Economics, College of Charleston

Key Takeaways

National Outlook

In Q1 of 2020, the national GDP fell precipitously; in fact, we’ve never had a decline so extreme. To accompany that, we experienced massive unemployment. For comparison, from 2008-09, unemployment peaked around 10%; in 2020, it reached 15%.

Regional Status

In the Charleston Metro Area, we also experienced a steep increase in unemployment. We went from a 2% rate up to 12% for both April and May. In June and July, we saw that number shrink to 9% and in August it was down to 6.8%. Another metric that illustrates the rapid change in our market is job postings: on March 19th, there were 15,000 jobs posted online; that number dropped by a third in April and May to 10,000. On a positive note, as of October 1, that number was just under 15,000.

We can also use consumer spending as a proxy for local GDP: in our tri-county region, as of mid-September, consumer spending was actually higher than in January of 2020. Visit tracktherecovery.org for more local data.

Key indicators for our region:

Lending and Business Outlook

Joe Grech, CFO for South Carolina Federal Credit Union, discussed lending and trends from a business perspective. When it comes to lending, some areas are doing better than others. Areas of strength include mortgage (now that we’re spending more time at home, people may need more space for a home office or space for school), automobile and boat/RV (people are finding ways to get out and have fun that are still safe).

Areas of weakness include small business/commercial and unsecured loans. Outside of PPP, business lending has been very contracted; underwriters are in a tough spot because they can’t evaluate a business based on prior years – as we hear so often, these are unprecedented times.

Looking Forward

Grech said that lending standards remain high and that the rate environment will stay flat, encouraging investment. The Fed has stated that rates will remain low until at least 2023. Ultimately, economic stability and growth are dependent on a vaccine and getting people fully back to work.