Fall economy expected to be better than a year ago, but uncertainties weigh on consumers

dbryant@thesunnews.comSeptember 22, 2012 

Long-awaited improvements in real estate will make this fall’s economy along the Grand Strand better than a year ago, though uncertainty will continue to weigh on consumers, economists said.

“Things seems to be getting better in this region, particularly since housing is finally starting to rebound,” said Rob Salvino, research economist at Coastal Carolina University. “Once that picks up more and builds a more stable footing, it becomes more noticeable. That’s what’s been dragging.”

The Grand Strand’s tourism-dependent economy slows down after the busy summer season, with fewer visitors and fewer employees on the payrolls. Still, the overall economy is better than a year ago, economists agree, but uncertainties this fall will leave consumers keeping their dollars in the bank instead of spending -- which is a key part of the economy.

“People aren’t spending it,” said Paul Lehman, chief investment officer for First Citizens bank who tracks the economy. “There’s just enough to keep us distracted.”

The presidential election in November, the crisis in Europe and U.S. lawmakers’ decision on scheduled tax increases and spending cuts leaves too many questions for consumers to feel comfortable opening their wallets or businesses expanding or hiring, Lehman said.

“It’s going to be better than last fall but disappointing on the whole,” he said. “There are just so many distractions right now. People are reticent to go out and spend.”

Despite the short-term blips this fall, longer-term trends are positive, Lehman said.

“Although we are not growing as much as we’d like, we are still growing,” he said.

HOUSING

Inventory of houses for sale along the Grand Strand have started to dwindle, and prices are starting to tick up again after plummeting because of the large supply of cheaper foreclosures and short sales -- positive signs for an industry that has struggled for years, Salvino said.

Nationally, real estate has shown steady progress, with new home sales up, builder confidence at its highest level in more than six years and increases in home prices.

“There’s positive movement in the housing sector,” Salvino said. “It’s actually on its way back up. It’s just simply the beginning of a recovery.”

But Lehman said expectations for improvements in real estate might be too high.

“We are still hopeful that housing has come back,” he said. “We are probably ripe for some disappointment there.”

JOBS

Unemployment will grow as usual this fall with the end of the busy summer tourism season, but more residents along the Grand Strand will be employed this fall than last fall, according to Salvino’s forecast.

About 3,000 more residents in Horry and Georgetown counties will have jobs during September, October and November than the same three months last year, according to Salvino’s forecast. He anticipates some construction jobs might also return if housing continues on a projected path of improvement and more stability.

Educational institutions and hospitals in the area are two of the segments generating some of the new jobs.

“Jobs just continue to grow slowly,” Salvino said.

The holiday season should bring more jobs, though temporary. Retailers already have started gearing up for the holidays, with layaways starting and merchandise out earlier than ever. Kohl’s said last week it plans to hire about 52,700 people for the holiday season, up more than 10 percent from last year.

Still, Horry County’s jobless rate is expected to hover just under 11 percent, in line with last fall.

TOURISM

Tourism, which has fared better than other sectors during the recession, will continue doing well into the slower fall season with golfers and special event-goers.

As was the case during the summer, visitors will pay more for a place to stay this fall than they did last year. The average daily rate is expected to be about $72, up from $67 last fall, according to Salvino’s forecast. But the numbers of visitors aren’t growing like the rate, which also happened during the summer when occupancy was about the same as summer 2011.

This fall, the average occupancy rate will hit about 42 percent, in line with the 41 percent during last fall, according to Salvino’s forecast.

Fall is a big time for golfers, as well as visitors participating in festivals and special events such as the fall Harley-Davidson rally and the Myrtle Beach Mini Marathon.

Tourism promoters are trying to lure leisure travelers with a new “60 Miles in 60 Days” campaign reminding folks of the beach’s still nice weather and promoting 60 “secrets” that visitors should check out. The effort, which kicked off in late August, includes TV and online ads, a blogger and social media. As of mid-September, the effort has generated about 50,000 “likes” and comments on Facebook and about 6 million impressions on Twitter, said Nora Battle, spokeswoman for the Myrtle Beach Area Chamber of Commerce, which is doing the campaign.

“This is the first campaign we’ve done of this kind, and I certainly believe it contributes to fall business and shoulder season travel in general in a number of ways,” she said in an email. “I feel strongly that we have garnered the attention of consumers that perhaps we haven’t reached in the past through this campaign and am excited to see the final results.”

The higher overnight rate is helping some tax collections, with increases this fall expected in accommodations tax revenues and Horry County’s hospitality fee revenues, according to Salvino’s forecast. But admission tax collections are expected to stay the same as last fall at about $2 million, likely reflecting the trend of visitors cutting back on spending while here by attending only one theater show instead of two.

AIRPORT

Declines in the number of passengers at Myrtle Beach International Airport are expected to continue for the rest of the year -- at least.

A loss of seats on airlines such as Spirit Airlines -- which carries half the passengers each year at the airport -- combined with the loss of now bankrupt Direct Air, which abruptly stopped flying in March, has led to drops in passenger numbers each month for most of 2012, with declines of more than 20 percent during the busy summer months.

Salvino predicts about 182,200 passengers to fly into the airport during September, October and November -- about 14,600 fewer than the same three months last year.

Most carriers already have trimmed flights or stopped serving the beach for the off-season.

Airport officials and tourism promoters said they have stepped up efforts to lure service and keep it here, with the goal of regaining some of the lost seats by the spring.

Contact DAWN BRYANT at 626-0296 or at dbryant@thesunnews.com or follow her at Twitter.com/TSN_dawnbryant.

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