Transcript Slide 1

South Carolina’s Economy 2006 & Beyond:
How It Affects You
Dr. T. Bruce Yandle
Dean, Clemson University College of Business
February 2, 2006
Opening Comments
Welcome – J. Scott Keim, Partner
Special Comments – Dr. Sheila Breitweiser
Our Mission:
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Introduction of Dr. Bruce Yandle
Is this a Global Post-Katrina
Recession-Adjusting Economy,
or What?
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First, a Report Card
The Dynamic Economy
Swimming Upstream…at Niagara Falls
The Economy in Gear
And now what?
Bruce Yandle
College of Business & Behavioral Science
Clemson University
[email protected]
The Year Past & Ahead
2004
Actual
2005
December 2006
Year Ahead
2005___Year Ahead
GDP Growth
4.2%
3.7%
3.5%
3.9%
Inflation (Core)
1.8%
2.5%
2.2%
2.7%
30-yr. Mort.
5.19%
6.25%
6.26%
6.80%
Unemploy
5.4%
5.0%
4.9%
4.6%
Prime Rate
5.25%
6.00%
6.75%
7.70%
Dow-Jones
10,600
11,200
10,717
Employ Gain
150M/mo.
150M/mo.
213M/mo. 200M/mo.
Oil
Gold
11,500
$45
$40
$54
$67
$422
$400
$500
$510
GDP Growth and Projections
GDP Growth
Forecast
8
7
6
Rate
5
4
3
2
1
0
2003Q1 2003Q2 2003Q3 2003Q4 2004Q1 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4
U.S. Employment Sectors: 2005
Gov.
17%
Const.
5%
Mfg.
11%
Trade
17%
Services
40%
TPU
FIN
4%
6%
U.S. Employment Sectors: 1972
Gov.
18%
Services
16%
Mfg.
26%
Const.
6%
FIN TPU
5% 6%
Trade
23%
Greenville-Spartanburg-Anderson
Sectors: 2005
Mfg.
15%
Const.
7%
FIRE
5%
TPU
4%
Gvt.
14%
Trade
16%
Services
39%
PRODUCTION-BASED INDUSTRY RANKINGS
1972
1980
Iron/Steel
Apparel
Machinery
Food
Paper
Fab Metal
Chemicals
Autos
Printing
Plast/Rubb
Iron/Steel
Apparel
Paper
Fab. Metal
Paper
Food
Chemicals
Printing
Autos
Plast/Rubb
1990
2000
Printing
Apparel
Plast/Rubber
Food
Chemicals
Iron/Steel
Fab. Metal
Machinery
Plast/Rubb
Autos
Comp/El
Autos
Food
Fab. Metal
Machinery
Food
Chemicals
Printing
Paper
Iron/Steel
2004
12.2005
Comp/El
Comp/El
Autos
Machinery
Food
Aircraft
Chemicals
Fab Metal
Iron/Steel
Plast/Rubber
Plast/Rubber Glass
Machinery
Autos
Fab. Metal
Food
Paper
Chemicals
Printing
Paper
Source: Economic Report of the President, 2005, and Federal Reserve Board.
U.S. Manufacturers are Disintegrating
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From doing it all to doing one thing
And bringing down costs
While maintaining world leadership
Manufacturing and Business Services Employment,
1980-2002
25000
20000
15000
Business Services
Manuf act uring
10000
5000
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
0
The Economy in Growth Phase
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Employment Closes the Gap
Shocks to the System
Whither the Jobs?
Geographic Imprint
Human Capital
A Final Word
D
Ap ate
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Apc-92
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De g-9
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Apc-93
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De g-9
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c
Ap -94
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De g-9
c 5
Ap -95
Au r-9
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De g-9
c- 6
Ap 96
Au r-9
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De g-9
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Apc-97
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Apc-98
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Apc-99
Au r-0
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De g-0
c- 0
01 00
0 M4
01 1M8
M
2- 12
2- Apr
A
2- ug
D
3- ec
3- Apr
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3- ug
D
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Thousand
Total Employed, 16 and Over, Seasonally Adjusted
Household Survey, with Trend
1/1991 - 12/2005
145000
140000
135000
130000
125000
120000
115000
110000
105000
200
150
Thousands
U.S. Mass Layoffs, 1996-2005
350
300
250
100
50
0
-1
05
20
-1
04
20
-1
03
20
-1
02
20
-1
01
20
-1
00
-1
99
-1
98
-1
97
-1
96
N.C. & S.C. Mass Layoffs, 1996-2005
80000
70000
60000
50000
40000
30000
20000
10000
0
1996
1997
1998
1999
2000
North Carolina
2001
South Carolina
2002
2003
2004
2005E
Percentage Change in Manufacturing Employment
1992-2003
5
-15
-20
-25
-30
Data for The Netherlands and China are for 1990-2002.
Source: W.A. Ward, Manufacturing Productivity and the Shifting U.S.,
China, and Global Job Scenes, 1990-2005. Center for International Trade,
Clemson University, Clemson, SC.
Japan
Australia
Germany
China
U.K.
U.S.
Belgium
Korea
France
Sweden
Italy
Taiwan
Netherlands
Rate
-10
Norway
-5
Canada
0
05.16.05
Growth in U.S. Industrial Production: 1998-2005
2.5
A sian " melt d o wn"
g enerat es d isrup t io n
in U .S. market s.
2
Fe d r a t e i nc r e a se s
br i ng st r onge r dol l a r &
l oss of e x por t a dv a nt a ge .
R ecessio n b eg an
3 / 0 1, end ed 11/ 0 1.
D e c l i ne be gi ns M a y 2 0 0 0 .
1.5
1
Recession
0.5
0
Hurricanes
-0.5
September
2001
-1
-1.5
1998
1999
2000
2001
Iraq invasion
Six-month moving
average.
2002
2003
2004
2005
05.16.05
Growth in U.S. Industrial Production: 1998-2005
2.5
F ed rat e increases
b ring st ro ng er d o llar &
lo ss o f exp o rt ad vant ag e.
A sian "meltdo wn"
generates
disruptio n in U.S.
markets.
2
1.5
R ecessio n b eg an
3 / 0 1, end ed 11/ 0 1.
D ecline b eg ins M ay 2 0 0 0 .
1
Recession
0.5
0
-0.5
September
2001
-1
-1.5
1998
1999
2000
2001
Hurricane
s
Six-month moving
average.
2002
2003
2004
2005
05.16.05
Growth in U.S. Industrial Production: 1998-2005
2.5
Fed r at e i ncr eases
Asi a n "me l t down"
2
br i ng st r onger dol l ar &
ge ne r a t e s di sr upt i on i n
l oss of expor t advant age.
U. S . ma r k e t s.
Re c e ssi on be ga n
D ecl i ne begi ns M ay 2000.
1. 5
3 / 0 1, e nde d 11/ 0 1.
1
R ecession
0.5
0
- 0.5
-1
- 1. 5
Hurricanes
Six-month moving
average.
September
2001
1998
1999
2000
2001
2002
2003
2004
2005
South Carolina Unemployment Rates by County
December 2005 State Unemployment Rate = 7.0%
Greater Than 10.0%
5.0% to 10.0%
Less Than 5.0%
Compared to November 2005, the
unemployment rate fell in 38 of 46 counties.
Cherokee
7.3
Pickens
6.3
Greenville
5.4
York
6.8
Spartanburg
7.7
Oconee
9.1
Union
10.4
Anderson
7.1
Chester
10.4
Lancaste
r
8.6
Laurens
6.8
Fairfield
7.9
Abbeville
7.5
Chesterfiel
d
8.9
Kershaw
6.6
Newberry
6.5
Greenwood
9.3
Lee
10.1
Saluda
6.5
McCormick
10.8
Marlbor
o
10.5
Dillon
10.1
Darlingto
n
8.0
Marion
13.6
Florence
8.7
Richland
5.6
Lexington
4.7
Sumter
8.8
Horry
6.0
Edgefield
8.8
Calhoun
7.0
Clarendo
n
10.4
Aiken
6.5
Barnwell
10.4
Williamsbur
g
12.3
Orangebur
g
9.7
Bamberg
9.6
Allendale
11.7
Dorchester
5.0
Georgetown
9.3
Berkeley
5.0
Colleton
6.9
Hampton
7.9
Charlesto
n
5.0
Jasper
5.2
Beaufort
4.6
Source: SCESC/LMI
US Unemployment Rate by
Educational Attainment
December 2005
Education is the key to labor market success –The unemployment rate for persons
with a bachelor’s degree or higher held steady at 2.2%.
7.5
Less than a HS Diploma
4.6
HS graduate, no college
Some college or associate
degree
3.9
Bachelor's degree and
higher
2.2
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
percent
Employment status of the civilian population 25 years and older by educational attainment
Source: Bureau of Labor Statistics
US Unemployment Rate by
Age, Race and Gender
December 2005
The unemployment rate for African Americans aged 16 to 19 fell to 24.4% in December from
38.4% in November.
White
African American
24.0
24.4
20.0
percent
16.0
13.4
12.0
8.0
4.0
9.3
4.3
8.6
3.8
8.5
3.8
0.0
Total
Men
Women
Both Sexes (16-19)
Source: Bureau of Labor Statistics
S.C. Income & Employment Growth
8
4
Employment Growth
Personal Income Growth
7
3
2
5
1
4
0
3
-1
2
1
-2
0
-3
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Employment Growth
Income Growth
6
Imagination is more
important than knowledge.
Knowledge is limited.
Imagination encircles the
world.
Patents Per 1000 People by Southern Metropolitan
Area, 1995-1999
Leading Southern Metropolitan Areas
1.
2.
3.
4.
5.
6.
7.
Austin-San Marcos
Baton Rouge
Raleigh-Durham-Chapel Hill
Gainesville, FL
West Palm Beach-Boca Raton
Houston
Dallas-Fort Worth-Arlington
4.28
3.71
2.66
1.96
1.75
1.52
1.49
8. Melbourne-Titusville-Palm Bay
1.45
14.
29.
31.
50.
51.
64.
82.
104.
Greenville-Spartanburg-Anderson
Florence
Charlotte-Gastonia-Rock Hill
Charleston
Columbia
Augusta-Aiken
Myrtle Beach
Sumter
1.16
.79
.75
.56
.54
.39
.31
.17
Total R&D Expenditures at Universities and Colleges, 1998-2000
Total R&D
1998-2000
R&D Expenditures
Per Capita
1,193,191,000
713,914,000
893,001,000
703,565,000
388,843,000
410,689,000
260,924,000
2,550,055,000
$7.81
4.63
4.09
3.62
3.46
2.56
2.26
2.12
Area
Leading Southern Metropolitan Areas
1.
2.
3.
4.
5.
6.
7.
8.
16.
20.
21.
22.
54.
68.
NR
Bryan-College Station, TX
Athens, GA
Gainesville, FL
Baton Rouge, LA
Hattiesburg, MS
Charlottesville, VA
Auburn-Opelika, AL
Raleigh-Durham-Chapel Hill, NC
Columbia
Charleston
Greenville-Spartanburg-Anderson
Augusta-Aiken
Charlotte-Gastonia-Rock Hill
Myrtle Beach
Florence
NR Sumter
Source: National Science Foundation
305,927,000
179,002,000
306,074,000
133,100,000
36,745,000
1,638,000
0
0
$.57
.33
.32
.28
.02
.01
0
0
Share of Adult Population with College Degrees, 2000.
Leading Southern Metropolitan Areas
1.
2.
3.
4.
5.
6.
7.
8.
10.
19.
23.
58.
Charlottesviille
Raleigh-Durham-Chapel Hill
Gainesville, FL
Bryan-College Station
Austin
Tallahassee
Athens, GA
Atlanta
Columbia
Charlotte-Gastonia-Rock Hill
Charleston
Augusta-Aiken
40.1%
38.9
38.7
37.0
36.7
36.7
34.1
32.0
29.2%
26.5
25.0
20.9
60. Greenville-Spartanburg-Anderson
20.7
74. Florence
75. Myrtle Beach
99. Sumter
18.7
18.7
15.8
Source: U.S. Census, 2000
Entrepreneurial Growth Companies as a Share of
Business in Labor Market Areas, 1991-1996.
Entrepreneurial Growth Companies
- Annual employment growth rate > 15%
- Employment growth > 100% for 1991-96
Southern Metropolitan Areas
Labor Market Area
Austin
Atlanta
Nashville
Pensacola
Raleigh
Little Rock
Charlotte
United States Average
Florence
Green.-Spart.-Ander.
Columbia
Augusta-Aiken
Charleston
Sumter
Companies
20,915
69,279
24,458
10,863
25,768
13,036
28,383
High Growth
1,514
4,479
1,465
643
1,507
757
1,544
12,091
22,771
13,577
9,106
12,350
3,185
567
1,049
607
393
507
118
Source: National Commission on Entrepreneurship, 2001.
Share
7.2%
6.5
6.0
5.9
5.8
5.8
5.4
4.7
4.7
4.6
4.5
4.3
4.1
3.7
How Strong is the Foundation?
GSA Rank
 Patents per 1000
14
 R&D at Universities
21
 Labor Force/Profess.
38
 Share, College Degree.
60
 Share, High School
93
 Share, Professional
73
Share, Growth Firms 4.6%/4.7%
Q&A
Any Questions?
In Closing
Closing Comments – Jay Peay, Partner
Special Thanks
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