State of the Low Country: Charleston County: The Big Three Medicine, Manufacturing, and Tourism will Continue to Ride a Wave of Growth in 2018
May 10, 2018 07:54AM
By Makayla Gay
By Chris Haire
Charleston’s economic outlook for 2018 remains strong, with the area’s Big Three industries—service, tourism, and manufacturing—once again driving growth.
“These are so large, it would take a major shift—like an Amazon locating here—to replace their ranking,” said Frank Hefner, director of the Office of Economic Analysis at the College of Charleston. “All three will continue to grow and remain vibrant.”
None of that accounts for the significant contributions of higher education, the military, the thriving state ports, or the burgeoning tech industry, which has its hopes of transforming the Holy City in the Silicon Harbor.
In 2018, Charleston is set to bring in high tourist traffic again—those No. 1 rankings in travel magazines and high-profile celebrity chefs and television appearances certainly help—while construction on an ambitious medical complex is nearing its end.
Adding to that optimism: a steady stream of out-of-state residents moving to town, resulting in an unprecedented explosion in multi-family housing on the peninsula and off.
However, trouble looms on the horizon, namely in the form of increased traffic, a shortage of service industry workers, a lack of affordable housing downtown, unchecked gentrification, and dramatically increased instances of flooding in the Holy City, flooding which brings some of the town’s biggest commercial areas to a near halt.
Here’s a look at the biggest stories for the Big Three in 2018 and beyond.
The Medical University of South Carolina and the Roper St. Francis health system remain vital parts of the local workforce. According to the U.S. Bureau of Labor and Statistics, approximately 30,000 people are employed in the healthcare business, with even more jobs on the way.
Enter WestEdge, a biotech-centric development located near MUSC and Roper, as well as The Joe, the beloved home of the Charleston Riverdogs. It’s designed not only to be a hub for the city’s budding biotech industry but also area workers, retail, and restaurants.
WestEdge Foundation CEO Michael Maher calls it “a live-learn-earn environment.” “As a more diverse urban place than a typical research park, it also provides a new lever for attracting and retaining talented researchers and entrepreneurs,” Maher said.
The company predicts the development will bring 4,280 new jobs, 100-200 new companies, more than 50 new shops, and 2,500-plus new residents.
“WestEdge provides an ideal location for companies that might spin out of research and innovation at the medical district, or companies that might choose to come to Charleston to collaborate with MUSC or other medical entities,” Maher said.
At the present time, WestEdge’s first two mixed-use buildings are set to be completed this year, with, Maher said, a Publix Super Market opening in the fourth quarter. This spring will bring construction on a third building, a research lab, and an office complex.
The tourism numbers for 2017 aren’t ready just yet, but Doug Warner, media relations director for the Charleston Area Convention & Visitors Bureau, thinks 2018 is looking just fine.
“The spring season got off to a great start with the Southeastern Wildlife Expo (SEWE) setting a record for number of attendees and for art sales,” Warner said. Reports indicate that the attendees jumped from 43,000 to 45,000. “This is a positive indicator for the rest of the year.”
While Spoleto Festival USA gets all the press—locally, nationally, and internationally—SEWE is grand dame of the Charleston festival season, bringing with it an economic impact of $50 million, according to the organization. (For comparison's sake, Spoleto Festival USA generates $43 million, while the Cooper River Bridge Run nets $30 million, according to multiple reports.)
In 2016, 5.44 million people visited the Charleston area, Warner noted, spending, on average, $227 per day and generating an overall an economic impact of more than $4.2 billion.
Couple that with Charleston’s continued reputation as one of the nation’s premier restaurant scenes and all the positive press that brings with it, and those numbers will likely go up. “The outlook for the tourism industry is to continue growing at a reasonable and sustainable rate through the rest of the year and into 2019,” Warner said.
Positive growth aside, the city is currently in the grips of a severe restaurant worker shortage—if not an overabundance of new restaurants.
According to the Kennedy Commercial Real Estate company’s quarterly Charleston Restaurant Report, the Holy City said hello to 90 new restaurants and sayonara to more than 50. The report estimates that more than 275 new restaurants have opened in the last five years, with 55 restaurants opening soon.
The tourist industry employs an estimated 47,000 residents in the Charleston area, the vast bulk of whom don’t live on the peninsula because of a lack of affordable housing, adding to the city’s growing traffic woes.
As for the hotel industry, it appears that the boom that has dominated the Charleston landscape for past several years is coming to an end—and it has nothing to do with Mayor John Tecklenberg’s campaign promise to put a moratorium on hotel construction. That effort failed.
“Everyone sees high occupancy rates, so a number of firms jump in the market creating a potential excess supply problem, which takes a while to resolve,” Hefner said. “Additional supply will wait until the occupancy rates increase and remain high.”
Although rates will fall, that will not be an indication that the Holy City has lost its tourist-friendly luster. “Charleston will continue to be a destination city,” Hefner said.
Traditionally, Charleston is not a large-scale commercial manufacturer. However, the arrival of Boeing in 2011 changed that.
When the aerospace giant opened its 787 Dreamliner plant in North Charleston—the retail heart of South Carolina—it brought along suppliers and nearly 1,000 jobs. Today, it has approximately 7,500 employees.
Sales of the 787 seem to be cruising at a comfortable altitude, with Turkish Airlines recently placing an order for 25 Dreamliners and Hawaii making a surprise decision to cancel an Airbus order in favor of the Boeing 787, putting in the call for 10 new planes.
And things could get better in Charleston if Boeing decides to make a middle-market plane here. The jet in question: the so-called 797. (The official name for the plane has yet to be made public.)
“If they decide to do that here, it speaks volumes for our community and our workforce,” said Becky Ford, director of global business development for the Charleston Regional Development Alliance. “Charleston offers the space, the capability, the business-friendly climate, and a nimble workforce culture that values flexibility and allows Boeing to stretch the limits of innovation to produce world-class aircraft.”
Ford said she remains bullish about the aerospace market. “I attended a meeting of aerospace CEOs in California, and they forecast a need for 41,000 new aircraft over the next 20 years,” she said. “We expect the Charleston region to play a significant role as the CRDA and our partners work together to grow this high-impact cluster ecosystem.”
Manufacturing in the Lowcountry is about more than plans. The automobile industry has increased the size of its South Carolina footprint with the new Volvo Cars plant in Ridgeville. The first batch of S60 sedans are set to roll off the assembly line by the end of the year. The carmaker intends to begin manufacturing a second car at the Berkeley site in the near future, upping employment at the plant from the estimated 1,500-2,000 reportedly needed to make the S60 to 4,000 workers in all.
Meanwhile, the Mercedes-Benz Vans plant in Ladson is in the midst of a significant expansion. Once the project is complete, it should employ 1,300 workers and have invested $500 million. The expanded plant is expected to be fully operational in 2020.
Although the two automakers are not located in Charleston, Frank Hefner says the impact will still be favorable to the city and county. “There are so many interlocking connections that a plant locating in one county has spillover effects in the other two,” Hefner said. “The outlook for the region is for continued solid growth.”