The economy should grow steadily during the next few years, but current growth is still two-thirds of what it should be, says Mark Vitner, an economist for Wells Fargo Securities.
For local residents, the slow steady growth means “don’t take big risks because there won’t be enough growth to bail you out of a bad decision,” Vitner said Friday.
Vitner’s advice followed his annual economic forecast breakfast at Winthrop University. About 150 business and government leaders attended the event.
He estimated the annual economic growth for 2015 will be about 2.4 percent, up from 2.1 percent this year. Before the recession, the annual economic growth rate was 3.3 percent.
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“I don’t think we’ll get back to there,” Vitner said of the pre-recession rate, noting that much of the previous growth was fueled by people and businesses assuming debt. While credit is flowing again, it’s not as easy to get as it once was. New regulations on the credit industry will also slow the pace of growth, he said.
Aiding the recovery is a broader economic base, he said, with South Carolina the third strongest state in growing its manufacturing economy. He said the state’s successful recruitment of BMW in 1994 showed that a quality product could be built and exported from South Carolina.
BMW has expanded its plant five times since 1994. The latest $1-billion expansion, announced in March, will increase plant capacity by 50 percent and add 800 workers. With the addition, the Spartanburg plant will be BMW’s largest.
Lancaster and Chester counties are reaping the benefits from BMW’s recruitment, Vitner said.
The Keer Group of China is investing $218 million to build a 236,000-square-foot textile manufacturing plant and a 10,000-square-foot office building in Indian Land off S.C. 160. Keer America plans to hire more than 500 area residents within three years.
In Chester, Giti Tire, based in Singapore, will invest $560 million to build a plant that will employ 1,700 people with the possibility of more jobs.
The recruitment of Keer and Giti “marks a shift for areas that have really been languishing,” Vitner said.
While these plants represent great opportunity, Vitner said, having prospective employees with the right skills for these plants is critical. “New factories require new skill sets,” he said.
The success of companies such as Red Ventures in Indian Land as well as the Riverwalk residential development in Rock Hill with its cycling amenities show that the state’s economy recovery is broadly based. “Charlotte has now come to you,” Vitner said.
While jobs are being added in area counties, Vitner said the resulting economic growth in income will be modest.
“Don’t sit on the fence, but don’t take too big of a risk,” Vitner said.
Larry Carroll, a Charlotte financial adviser who attended Friday’s event, said Vitner’s analysis was accurate, but “people haven’t bought into the idea” of economy recovery.