Horizon 2010: Year welcomes recovery with equal parts hope and trepidation

The Grand Strand's economic recovery in 2010 will come in the same way folks will stroll along the new boardwalk this summer: slow and steady.

The $6 million boardwalk - in the works for years - is expected to help buoy the beach's tourism this year, but it won't cure all the ills left by the Great Recession.

Ongoing double-digit unemployment rates, which are expected to hang around all year, will make the slight improvements in tourism, real estate and retail in 2010 barely noticeable to the average resident, who will continue to struggle amid the sour job market. This "recovery" - a term some economists use loosely - won't come like a flick of the light switch; it will come in small, gradual steps throughout the year.

There will be "a recovery, but not a recovery that most people can feel," said Doug Woodward, an economist at the University of South Carolina. "We are stabilizing right now. The economy isn't deteriorating anymore."

Tourism and the 1.2-mile boardwalk's debut this summer could be bright spots for the Grand Strand. The city got a deal on the construction because of the lagging economy, which cut the cost in half. And the project has fueled some private business investment - which economists say is a crucial component for the economy to recover. Businesses have been reluctant to hire or spend money on expansions until the economy is on solid footing.

"It is at a perfect time," said Dave Sebok, executive director of the Myrtle Beach Downtown Redevelopment Corp., which spearheaded the boardwalk project. "It's given the private sector confidence to spend additional money ... at a time when people are generally holding back and have a wait-and-see attitude."

The recession - which started in December 2007 and battered residents and businesses - has ended, most economists agree, though the data confirming its end won't be ready for months.

The recession left deep holes that the economy won't be able to snap out of quickly, economists predict. The overall economy this year will be better than it was in 2009, and that's enough to satisfy some business leaders.

"It might be a slight improvement, but I think we will take it," said Cathy Altman, president of the Brunswick County Chamber of Commerce. "[Residents] want things to be better, and they are trying to make it better."

The Good

Grand Strand real estate and retail have started a slow rise, and experts predict tourism will do the same once the season kicks in this summer.

In addition to the boardwalk, new flights to destinations such as Dallas-Forth Worth, Texas - which opens easier travel to and from the west - and more money to promote the Grand Strand to potential travelers bode well for the beach, experts say. The Myrtle Beach Area Chamber of Commerce will spend millions more promoting the area this year, thanks to the 1 percent sales tax for tourism that Myrtle Beach implemented in August. The boardwalk gives the city a new attraction to promote.

Travelers won't let a lagging economy get in the way of that trip, Woodward said.

"Myrtle Beach is a favorite destination for plenty of tourists," he said.

Retail sales in Horry County have been on a slow climb since the fall, and real estate has had monthly gains in sales for the past six months. Experts predict both of those upward trends to continue - but slowly.

"I'm looking for a frustratingly slow recovery to begin to take hold in 2010," said Don Schunk, a research economist at Coastal Carolina University.

Two large manufacturers are on their way to South Carolina. Proterra plans to build a research facility in Greenville, and Boeing is working to open a 787 plant in North Charleston in 2011 - creating 3,800 jobs during the next seven years. Business recruiters in Horry and Georgetown counties already have started courting Boeing suppliers to locate along the Grand Strand.

Boeing gives hope to Georgetown County, which has been hit hard by the manufacturing woes that have left hundreds of residents jobless. The area won't recover as quickly as Horry County, with retail sales in Georgetown still lagging and no prospects for substantial job growth, Schunk said.

"They are in worse shape across the board," he said.

Still, county leaders are focusing on moving forward. A speculative building to lure a business will be ready this spring in a 500-acre industrial park off S.C. 521 in Andrews, and county leaders already have started talking to Boeing suppliers and other aviation-related businesses that may set up in Georgetown because it is so close to the planned Boeing plant in North Charleston, said Wayne Gregory, the county's economic development director.

The Bad

Unemployment will continue to lag throughout 2010, with no major hiring push in the works for the Grand Strand.

Jobless rates surged to nearly 15 percent in Horry and Georgetown counties at the end of 2009, and they are expected to hover in the double-digits through the year. No significant improvement is expected until 2011.

"We'll be treading water at best," Woodward said. "That's the best we can hope for. We need a lot of growth before we see employment pick up."

Businesses remain hesitant to hire workers until they are sure the economy is on solid footing. Companies need to see more solid signs - including what, if anything, the government plans to do - before making the leap.

"There's a lot of uncertainty about what the government may or may not do," Schunk said. "Businesses hate to and won't make decisions if they are unsure of where the economy and government is heading."

The Grand Strand isn't expected to suffer the job losses it did in 2009; there just won't be a large number created to offset the cuts of the past year.

"We are turning an important corner this year," Schunk said. "But this is not the year we see a strong rebound."

Many businesses also need banks to start lending, which will give them the ability to expand or make investments in their companies. Banks, criticized for loose lending that contributed to the recession, have stricter lending standards that is crippling some small businesses, Altman said.

"Banks have got to start lending," she said. "That will definitely help stimulate the economy."

The Iffy

Economists are keeping a close eye on two things that could derail the fragile recovery: the end of federal stimulus programs that propped up the economy in 2009 and commercial real estate.

Concern has been growing about commercial real estate, which includes shopping malls, offices and hotels. Many of these properties are failing, which also causes delinquencies on bonds backed by pools of commercial real estate loans.

Government programs to aid the economy represent another wild card for 2010. Programs such as Cash for Clunkers provided a temporary boost in 2009, as did the first-time home buyers' tax credit - which was such an aid to real estate that officials expanded eligibility and extended the credits into 2010.

Economists worry what might happen without creative government crutches.

"We don't have any more tricks," Woodward said. "Then we are on our own."