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Strong outlook for Charleston Economy

Presentation by Economic Development Directors of County and Mount Pleasant
Warwick Jones, standing in for Shawn Keller who is on military duty in Iraq

Mr. Steven Dykes, Director of Economic Development for the County, was optimistic about the course of the Charleston economy this year and beyond when he made his presentation to County Council last week. He noted that 2004 was a record year and this year had the promise of being another record. Last year, records were broken in housing starts and sales, gross retail sales, airport activity, tourism and perhaps most importantly, capital investment.

Records in many sectors
In the housing sector, Mr. Dykes noted that 8200 single family permits were issued in 2004, up 11% on 2003. In 2005 and 2006, he projects issuance of 8800 and 9500 permits respectively, growth roughly of 7 to 8%. Gross retail sales in 2004 amounted to over $14 billion, up 4% on 2003. This year he is forecasting $14.7 billion or 5% growth.

Growth of port tonnage and air traffic is forecast to be even stronger this year. Port tonnage in 2004 increase by 10% over 2003 to 1.86 TEUs (container equivalents). In 2005, he projects an increase of 11%. And as for air traffic, it was up 13% in 2004 but this year is expected to top 2 million fliers, up 15% over 2004.

Capital spending likely to remain strong
Strong capital investment seems likely to contribute to further strength in the local economy. As Mr. Dykes remarked, two record breaking projects made 2004 a history making year and contributed to launching the County into the top position amongst the 46 counties of the State in both capital investment and new job creation. The County posted $593 million in new capital investment in 2004 and created 1790 new jobs. The two new initiatives were of course the $566 million Vought Aircraft/Alenia project to assemble the Boeing 787 fuselage, and the $25 million Verizon Wireless Call Center employing 1100 persons.

Mr. Dykes did not make a forecast of capital spending in 2005 but he clearly expects it to be strong. He didn't mention it but there will be continued spending by Vought Aircraft/Alenia. He also notes that there are 12 prospects which are considering County locations and will account for $100 million in capital investment and add 1000 new jobs. Six of these prospects involve "competitive expansions" by existing Charleston companies. Aiding investment this year was a change in Enterprise Zone tax credits. These would rise to $2500 per worker available from $1500 in 2004. There was also legislation being considered to cut State taxes and to extend job tax credits to employers creating as few as 2 new jobs as opposed to the present 10.

Strategy to concentrate on clusters
The Charleston Regional Development Alliance has just completed a revision of its recruitment strategy for the next 5 years. It follows on a study undertaken by Angelou Economics of Austin, Texas. The Strategy recommends that resources be concentrated on logical clusters of business within the region. The important clusters are:
• Automotive Suppliers
• Aerospace
• Biosciences
• Advanced security (information technology)
• "Creative" niches such as urban design, historic preservation, movie making.

Each of these clusters can be leveraged on existing community assets such as the existence of Bosch auto part facilities, or the Vought /Alenia facility.

Some impediments to growth
But Mr. Dykes was also concerned about the impediments to growth. He was concerned about education and his first priority was to improve education from kindergarten to 12th grade. This was followed by the necessity to enhance highway infrastructure. He also said that the port needed to remain competitive, that support was necessary to nurture growth of venture capital and to create wet-lab incubator space

Mount Pleasant by passed in economic growth
Mr. Myles Stempin, Economic Development Director of the City made the presentation for Mount Pleasant. His focus was more on the future than on the past. Indeed, it seems that although the Town has experienced strong growth of housing construction over recent years, it has been by-passed in general economic development. This concern and the problems created by such strong urban growth have prompted the Town to become more aggressive in stimulating economic development.

A major objective in future is to focus efforts on creating a 300 acre plus "Innovation Centre" at Carolina Park to attract "high end" projects and allow companies from several target sectors to cluster.

Recognizing that the Town has traffic problems, it was hoping to create more primary income jobs to lessen the number of residents that were commuting out of the town. Also, the industrial development at Carolina Park would effectively create a reverse commute. It would encourage traffic to travel north in the morning and south in the afternoon, in opposite directions to the present main traffic flows.

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