COLUMBIA, S.C. (WIS) - The South Carolina economy will recover to pre-pandemic levels by 2021 in the best-case scenario, according to the University of South Carolina Darla Moore School of Businesses' economic outlook.
“2021 will be a year of recovery in South Carolina,” declared UofSC Research Economist Joseph Von Nessen.
However, Von Nessen and Doug Woodward, director of the Darla Moore School’s Division of Research and professor of economics, said when exactly the economy recovers depends on a couple of upcoming events.
“We don’t anticipate a full recovery at least until the summer of 2021 and it could be as late as 2022. So, there are a range of estimates,” Von Nessen said. “More optimistic and pessimistic scenarios depending on different outcomes that we will see in the coming months. Based on the election outcome and other factors based on the pandemic,” he added.
Von Nessen explained the outcome of November’s election will determine future U.S. economic policy and potential stimulus bills. In addition, if the pandemic resurges, a spike could affect consumer confidence.
South Carolina’s economic recovery was speedy at first, following a full shutdown of businesses in March and April, the researchers said. But, it slowed down around July.
Von Nessen attributes the slower pace around that time to spikes in COVID-19 cases in the Palmetto State, government funding like the Paycheck Protection Program running out, and many people struggling to go back to their old jobs.
“After sprinting out of the gate in April and regaining many of our lost jobs, we’ve since dropped back to a modest but potentially more sustainable pace of recovery,” said Von Nessen.
As of the end of September, 62 percent of the jobs lost during March and April have been recovered in S.C., the UofSC outlook says.
In comparison, nationwide, only 51 percent of the jobs lost at that time came back. However, despite the overall positive direction of the state’s economy, some industries will continue to struggle, Von Nessen said. Some of S.C.'s key industries, tourism, hospitality, and tourism, will continue to face tough economic times for longer than most other industries, in particular the small businesses that make up a large portion of this economic sector.
“Most small businesses have limited financial resources to weather any economic downtown. But small businesses that provide in-person services in an era of social distancing have been especially vulnerable,” he explained.
It’s a reality business owner Tim Gardner knows all too well as the owner of Lula Drake Wine Parlor in downtown Columbia. Gardner designed Lula Drake to be an intimate restaurant modeled after European bistros, which he says was an ideal place for people to eat, drink, and meet strangers.
However, the business is the opposite of the kind of place economists say can best survive this pandemic.
“It’s very difficult in a space that’s 12 feet wide to pivot to something else and retain the very thing that was successful for us,” Gardner said.
Since shutting his doors, Gardner has put his energy into a production business he started with his wife. He said many of his employees have found or are looking for other work.
“It’s very difficult for me to walk into a space and all the lights are off all the time. And to think about all the good times I’ve had there,” Gardner said.
He said he isn’t sure when he will be able to reopen his business again, but he hasn’t given up hope. He explained the guidelines on restaurants now are too restrictive for him to sustain his business.
“When you reopen and you are at 25-50 percent capacity. There is no way to stop all those bills from coming in. You have to pay your employees, you have to pay rent, you have to pay insurance,” he said.