State's jobless rate jumps to highest mark in 3 years

COLUMBIA -- Fueled by the downturn in the housing market and ailing economy, unemployment in South Carolina spiked in July to 7 percent -- its highest level in almost three years.

Construction was down by only 100 jobs between June and July. But that sector has lost more than 16,000 jobs since November, said Sam McClary, labor market analyst for the S.C. Employment Security Commission, which released the figures Friday.

"That's unheard of," McClary said.

McClary said July was the ninth straight month the construction sector has suffered a setback in jobs. "Being a growing state, we should be growing construction jobs at a significant rate."

But the downturn in the housing market has left many in construction out of work, particularly in the specialty trades, such as cabinet making, McClary said.

The state's jobless rate in July was almost a full percentage point above June's level of 6.1 percent and significantly higher than the national jobless level of 5.7 percent.

In the Columbia metro area, the six counties in the Midlands the jobless rate jumped to 6.3 percent in July from 5.8 percent in June.

In July 2007, the S.C. unemployment rate was 5.8 percent, and the Columbia rate was 5.3 percent.

Last month, there were 150,500 people on the unemployment rolls in South Carolina, an increase of 18,700 from June. The number of non-farm jobs dropped nearly 30,000 in July to 1.9 million. Still, the state had 3,900 more jobs than this time last year.

McClary said in addition to the loss of construction jobs, other reasons for the spike in the jobless rate were a falloff in manufacturing and retail trade, and a seasonal drop in local government jobs for example, schools releasing non-teaching staff for the summer.

The extension of jobless benefits in July also contributed to the spike. That put more than 32,000 S.C. job seekers back onto the jobless rolls.

In the housing industry, the downturn is taking a toll on everybody from home builders to suppliers to those in related industries.

Beazer Homes pulled its operations out of Columbia in February, and Boozer Lumber a local supplier of construction materials since 1946 said it would close in July, laying off 160.

Pete Williams, owner of A-Therm Remodelers in Columbia, is feeling the pinch.

Williams said he has not been able to replace two workers who have left in the past year. His gross profits for the year, usually about $1 million, are going to be about half that this year, he said.

Most of his colleagues are in the same boat, he said. "The brakes are on."

He said he hasn't seen business this bad since 1982.

However, Earl McLeod, chief executive of the Home Builders Association of Greater Columbia, said the decrease of 100 jobs in July might be a signal the tide is turning.

At its worst, construction lost 4,000 jobs in January and 3,200 in June.

"Maybe we've bottomed out," McLeod said. "Hopefully, we'll start seeing an upward trend."

McLeod said he hopes a $7,500 federal tax credit for first-time home buyers will help spur more home purchases and put contractors back in business. The credit is part of a stimulus package passed last month.

"That should be a real boost," McLeod said.

Even if the construction sector's numbers improve, McClary said the struggling economy is likely to keep the jobless rate high.

"We're going to be experiencing high unemployment rates for a while."