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Regional Report: Population and GDP Grow in South Carolina

South Carolina’s business-friendly environment is drawing new businesses that can take advantage of its longstanding workforce training program to fulfill their needs.

Q4 2019
GE Appliances plans to invest $60 million to create a Manufacturing Center of Excellence for the production of water heaters at its existing plant in Camden, S.C.
GE Appliances plans to invest $60 million to create a Manufacturing Center of Excellence for the production of water heaters at its existing plant in Camden, S.C.
In September, GE Appliances announced that it would invest $60 million to create a Manufacturing Center of Excellence for the production of water heaters at its existing plant in Camden, S.C. The investment represents the next step in a strong, ongoing relationship between the company and the state. According to Frank Scheffel, plant manager, this relationship can be traced in part to South Carolina’s commitment to its business community.

“South Carolina is a very welcoming state to new and existing businesses,” Scheffel says. “The economic development teams are committed to growing the employment base in the state and are very efficient and responsive to requests and ideas. They are focused on creating an environment where large and small high-tech businesses can thrive.”

By the Numbers
South Carolina ranked 26th in the country in GDP (about $234 billion) in 2018 and enjoyed an unemployment rate of just 2.9 percent, as of September 2019, the lowest in the state’s history. And South Carolina’s 4.7 percent GDP growth in the past five years is the 11th-largest increase in the United States over that time, according to 24/7 Wall St.

The state’s top industries include advanced manufacturing, advanced materials, aerospace, agribusiness, automotive, and life sciences. No Fortune 500 company is based in South Carolina, though four in the Fortune 1000 do call the state home — Domtar Corp., Sonoco Products, ScanSource, and SCANA Corp. More than 1,200 international companies have operations in the state, according to the South Carolina Department of Commerce.

South Carolina’s Secretary of Commerce Bobby Hitt points to “business-friendly” regulations and taxation (no state property tax, income tax, or inventory tax) that help keep operating and capital costs subdued as a crucial selling point to companies considering the state. Those regulations combined with energy infrastructure investments lead to affordable power costs, with South Carolina’s industrial power costs averaging more than 12 percent less than the U.S. average, according to the state’s Department of Commerce.

Manufacturers in South Carolina account for about 17 percent of the total output in the state — $37.15 billion in 2017 — and employ nearly 12 percent of the workforce. — nearly 248,000 in 2018, according to NAM. Major manufacturing sectors comprise aerospace products/parts, pharmaceuticals/medicine, motor vehicle parts, and machinery, among others.

Much like our neighboring southeastern states, South Carolina is experiencing historically low unemployment. To ensure we have a ready workforce for both existing and future industry, we have to think creatively about our approach to workforce solutions. Bobby Hitt, Secretary of Commerce, South Carolina In addition, South Carolina recruited more than 4,100 office, headquarters, and R&D jobs last year. The state also ranks 27th for net tech employment (nearly 6 percent of its workforce) and had the 21st-highest net tech employment growth in the U.S. for 2017–2018, according to a Cyberstates 2019 report.

Other Advantages
Among the state’s other key advantages for businesses, says Hitt, are South Carolina’s favorable location and robust transportation infrastructure. The state is served by five interstate highways, one of the most productive container ports in the U.S. (the Port of Charleston), two inland ports, two Class I rail carriers, and three major airports.

“South Carolina’s central East Coast location, coupled with an integrated transportation system of highways, airports, seaports, and railways, ensures companies can easily reach every one of their markets, domestically and internationally,” Hitt notes.

Scheffel agreed that the state’s transportation infrastructure boosted companies’ operations: “Having major ports nearby in Charleston and Savannah (Ga.) helps manufacturers like ours and other businesses with access to efficient shipping of components and raw materials…Interstate 20 connects us to other major hubs in the state and region.”

Charleston’s port, as well as its status as a popular destination for tourists, helps make it the state’s busiest metropolitan area. The city’s regional economy was ranked No. 16 in the country, buoyed by cargo growth, according to the Milken Institute’s 2019 rankings. A 2019 analysis from the State Ports Authority detailed that the Port of Charleston generates 10 percent of the state’s economy in partnership with its inland port partners.

A Common Challenge
Despite all its advantages, an economic development challenge that South Carolina faces — one common among its peers — is workforce availability.

“Much like our neighboring southeastern states, South Carolina is experiencing historically low unemployment,” Hitt says. “To ensure we have a ready workforce for both existing and future industry, we have to think creatively about our approach to workforce solutions.”

South Carolina’s central East Coast location, coupled with an integrated transportation system of highways, airports, seaports, and railways, ensures companies can easily reach every one of their markets, domestically and internationally. Bobby Hitt, Secretary of Commerce, South Carolina Scheffel agrees that workforce development and filling the skills gap represent a challenge for supporting a growing manufacturing base: “Companies, government, and schools must work together to create programs to develop this vital pipeline,” he notes. “While the labor market continues to be tight — especially skilled trades — we continue to have employees drive more than 30 miles to work at our plant.”

South Carolina is home to three research universities, and the South Carolina Technical College System has 16 community-based technical colleges, which are helping to address workforce challenges. The technical colleges feature the readySC program, which offers customized workforce training for eligible companies. The program has trained nearly 300,000 people and has served more than 2,000 companies since 1961.

Additionally, last year, the state launched the ManufirstSC program, which is a 62-hour program that enables prospective employees to prepare for manufacturing careers with a certificate rather than experience. More than 1,000 people have graduated from the program, and more than 100 companies have committed to accepting the certificate from job applicants.

Two other recent workforce-related programs include the South Carolina Fraunhofer USA Alliance, a partnership with the South Carolina Competitiveness Council that aims to bring the problem-solving needs of companies to the state’s universities, and SC Codes, which provides a free online coding curriculum and mentoring services.

“Workforce development is about getting the right people in the right jobs at the right time,” Hitt explains. “And the state’s programs for preparing workers are an essential tool in recruiting new companies and supporting existing industry.” And South Carolina’s low cost of living is luring new residents to the state who may help to fulfill workforce needs as well. Its population increased 7.8 percent due to net migration from 2010 to 2018, the fifth highest in the nation, according to 24/7 Wall St.

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