Smaller paychecks likely to affect economic growth in Myrtle Beach area this year
01/12/2013 12:00 AM
01/12/2013 12:49 PM
The slow, steady improvement in the Grand Strand’s economy is expected to continue in 2013. But for most, it still won’t feel like things are getting better.
While housing starts are picking up to help fuel growth, jobs will remain hard to come by this year and the end of a tax break that translates into smaller paychecks will put a damper on consumer spending.
“Unfortunately, what the average person is going to notice is that smaller paycheck,” said Rob Salvino, economist at Coastal Carolina University. “That hits every consumer at any income bracket. That is an across-the-board hit.”
Workers will see 2 percent less in their paychecks this year because a payroll tax break has ended. If you make $1,000 a week, this means you’d have $20 less a week in your pocket. Nationally, the end of the tax break is expected to take about $100 billion out of the U.S. economy through consumer spending in 2013, according to the Detroit Free Press.
About two weeks into the new year, some workers are likely starting to receive that first paycheck and see how much money they’ll be taking home.
Taking home fewer dollars will cause nearly everyone to pull back, including tourists -- whose visits and spending have been a bright spot during the economic downturn. They are likely to spend less freely at restaurants, attractions and stores during their beach vacations, Salvino said.
“They are definitely going to have a direct hit to their discretionary income,” he said.
Reservations are coming in slowly at Ocean Drive Beach and Golf Resort in North Myrtle Beach, likely because people were waiting to see the impact on their paychecks -- and what might happen with the economy next, owner Harold Worley said.
“There’s a lot of uncertainty out there,” he said. “People are going to be hanging on to their money, at least that’s what I’m seeing right now. People are holding back.”
That’s especially not good for Grand Strand golf. Golf getaways are usually the first luxury that penny-pinchers cut when they have less income or feel uneasy about splurging. Golfers won’t add that into their budgest until they feel comfortable, and there’s still lots of uncertainty about the national economy.
“That really is the last piece to come back,” said Bill Golden, president of marketing group Myrtle Beach Golf Holiday. Though it’s still early to determine how Grand Strand golf will fare this year, Golden predicts a modest increase in rounds.
“Hopefully we will begin to gain momentum,” he said.
For jobseekers, 2013 likely won’t offer many new options. The Grand Strand’s jobless rate, despite the traditional seasonal swings, is down from last year, but there are still lots of folks out of work. Horry County’s jobless rate was 9.7 percent in November, the most recent statistics available, down from 11.1 percent in November 2011, according to the S.C. Department of Employment and Workforce. Georgetown County’s rate was 8.5 percent, down from 10 percent in November 2011.
“Employment is still weak, the employment rate is still high,” Salvino said. “It’s still a really tight market.”
Statewide, gains are expected in transportation and warehousing, health care, education and construction, according to the 2013 forecast by economists at the University of South Carolina.
There are some bright spots in the Grand Strand’s economy.
You’ve probably noticed more new houses under construction. That’s a sign that real estate -- hammered by the recession and slow to recover -- is finally starting to pick up. Experts say the market is finally stabilized after years of plunging prices and slow sales.
“We will continue to see the housing market improve,” Salvino said.
But residents likely won’t feel that an overall economic recovery has taken hold.
“We are seeing a very slow, steady improvement,” said Tommy Bouchette, South Carolina market president for BNC Bank who is based along the Grand Strand. “That does not mean, by any means, that we are back to what we were experiencing in ’05 and ’06.”
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