Despite a local economist's assessment that Orangeburg County could be more vulnerable to a potential economic downturn, county business officials are cautiously optimistic 2008 will not see a significant economic drop-off.

The Times and Democrat Region's heavy manufacturing workforce and tourism-based economy could be more susceptible to economic downturns than other, more economically diverse communities, says Dr. Harpal S. Grewal, Claflin University School of Business dean and economics professor.

"The slowdown starts earlier in our area and it lasts longer because of the manufacturing economy," Grewal said. "Our county is in manufacturing and tourism, which are more susceptible to economic cycles."

University of South Carolina research economists are predicting the state's economy will be sluggish in the coming year, but will fall short of slipping into a recession. The report was issued during the university's annual outlook conference held last week.

Grewal says T&D Region counties generally follow trends in the state's economy, but there are some unique features particular to the region that tend to make an economic slowdown more pronounced.

He says for one, the county does not have many of the high-tech, high-growth or service-based industries needed to help lessen the blow.

The news is not too encouraging for a region where unemployment numbers are already often among the state leaders.

The latest October unemployment numbers for Orangeburg County showed the rate at 8.9 percent, down from 9.7 percent in September. But the county had the ninth-highest unemployment rate of the state's 46 counties.

In Bamberg County, the unemployment rate for October fell to 8.8 percent, from 9.2 percent in September. The county ranked tenth-highest in the state.

In Calhoun County, the unemployment rate fell to 6.2 percent from 6.8 percent in September. It ranked 28th in the state.

"We are always higher in the state," Grewal said. "When there is an economic slowdown, the gap becomes even larger. Our unemployment rate increases faster than the rest of the state."

In addition to manufacturing, Grewal said the county also relies on tourism, which is heavily impacted by any downturn.

"We have a transient tourist economy (of people traveling to Florida and North Charleston), where they stop and buy gas and food," he said. "But rising gas prices have an impact on that. Eventually it will show up."

"People need to have money in hand before they start to think of vacations," he continued. "They need to meet other needs first."

But Grewal says Orangeburg County's colleges and universities do provide some stability.

"These are pretty stable organizations," he said. "They provide a buffer because an educational institution does not cut jobs and there are normally increases when there is a recession."

When people cannot find employment, they often go back to college, he said. To handle the new students, college employment remains the same or even increases, he said.

And he says the Orangeburg County Development Commission and the Orangeburg County Chamber of Commerce are both doing all they can to bring in new industry and business to help strengthen the economy.

Official 'cautiously optimistic' about development in 2008

Orangeburg County Development Commission Executive Director Gregg Robinson acknowledged there are challenges in the housing market and for housing suppliers such as heating, ventilation and air conditioning manufacturer Allied Air.

But even there, he says, the approach of winter should help create a spike in furnace sales.

"It does ebb and flow," he said. "We have seen a dip in the residential component of the market ... but Orangeburg is a stable growth market. We don't see the swings in double-digit increases and we don't see the double-digit decreases."

While not commenting on specifics, Robinson did say there have been downturns at companies such as roof truss manufacturer Universal Forest Products and wall panel manufacturer Builders FirstSource. He said the companies have had to lay off some shifts due to slow growth.

"We are constantly trying to keep our heads above water," he said, noting that housing will come back as many people are moving to the Southeast and to South Carolina in particular. "Housing will not stay down forever."

Robinson said he is also "cautiously optimistic" about 2008 in the industrial/manufacturing sector.

"It will be right in line with 2007," he said, noting that 2007 saw a number of announcements from ACO Distribution and Warehousing Inc., Henry SOC's Travel Center, Sims Bark's, Eagan, McAllister Associates Inc. Monteferro America and expansions at Okonite Company and Quality Model.

Robinson says there some reasons for optimism. Jafza International will move forward with its plans to invest about $600 to $700 million the county, there will be a groundbreaking on a new 150,000-square-foot speculative building, about $2 million worth of new roads will be built at the Orangeburg County/City Industrial Park, and the Lake Marion Regional Water System will come on line, which will help open up about 700 acres in the John W. Matthews Industrial Park.

"We have some significant growth initiatives," he said. "You never know what each year will bring to our area. But I don't foresee manufacturing sliding as much as they have indicated. I don't see prospect visits being any less than in 2006 or 2007."

He said the key is to maintain infrastructure and product availability.

Robinson said he foresees people cutting back on travel, but not eliminating it completely. He says while people are not traveling for long periods of time, shorter distance travel is still occurring. The proximity of Interstate 95 and Interstate 26 provide the county a heavily traveled pipeline.

"We have a very stable transportation economy," he said.

Housing, banks, car dealers not listening to prophets of doom

Jeannine Kees, co-owner and broker-in-charge of Century 21 The Moore Group, says the Orangeburg real estate market remains is fairly small and remains pretty steady.

"We don't have investors and speculators coming in here because of the growing demand," she said. The local market usually serves first-home buyers.

"We have some demand, but not like the growing demand of the second-home market," she said.

She said in many ways the Orangeburg market is "doing fine."

Last year, through Nov. 30, the average days for a house to be on market was 154 days, compared to 169 days this year, according to Multiple Listing Service data.

The number of transactions from last year to this year have gone from 1,078 to 1,054 home sales.

"We are seeing good opportunities for people in the sense that interest rates are low and all my mortgage contacts say they will go lower," Kees said. "I see this as a pretty normal market."

In some ways, Kees said what frightens her is not the local housing market but the national media's portrayal of the housing market. She says all the coverage about foreclosures and the recent actions by President George Bush to freeze mortgage rates for subprime loans may paint the picture that the local market is seeing the same problems.

"We are seeing some slower appreciation than maybe has been before," she said, noting that 5 percent to 10 percent jumps may not be the norm as in some past years.

In light of this, Kees said she expects 2008 to put more pressure on the real estate agent to become more informed to what she sees as a more educated and questioning buyer.

When asked about the president's decision to freeze rates, Kees said the move was one, "toward somewhat of a solution."

"We need to do something," she said, acknowledging that for some who have just had to foreclose, the move may be a little too late, but for others it will bring some relief.

Orangeburg County Chamber of Commerce President David Coleman says during informal talks with various businesses in the county, rising gas and energy prices have been a common topic of conversation.

He says there have not been any glaring concerns or panic as most business owners are astute and know what to do in times of uncertainty.

"They will just have to tighten in their outlook," Coleman said, noting that businesses can diversify by looking for new markets and possibly marketing overseas. "Diversifying products, diversifying services and diversifying customer base all are helpful."

Benji Brickle, owner of Orangeburg Chrysler/Dodge Nissan, said he is hoping a downtown stays at bay in 2008 despite the increase in the price of fuel and the general cost of living.

"It takes money out of people's pockets to buy goods," Brickle said.

Brickle said he has seen a decline in the purchase of "more thirsty vehicles" such as sports utility vehicles and trucks, as buyers switch to more economical models.

"Nobody is extending terms out more than normal," he said.

But like the real estate market, he says that Orangeburg's automobile market remains steady during any significant downturns.

"Orangeburg does not suffer like some of the bigger cities do as long as we keep our industries going and keep the paychecks rolling in," Brickle said. With Orangeburg still being an agriculture- and manufacturing-based economy, keeping those two sectors viable is key, he said.

"I hope farmers have a good year every year," he said, adding that a significant concern of his is the fact that people go out-of-town to shop. "If we keep Orangeburg business in Orangeburg, the general economy and retailers would not suffer nearly as bad."

South Carolina Bank and Trust Regional President Gene McConnell said the bank has never gotten involved in subprime loans, which he says have caused a lot of the financial difficulty.

"The loan business has been good," McConnell said. "We have a nice pipeline on the loan demand."

He said while home sales have been down, the refinancing of personal mortgages, "is still a really good market."

"People have gotten into those ARM (adjustable rate mortgage) loans now and have an opportunity to refinance at a fixed rate," he said. "Mortgage fixed rates are good. We have seen an increase in financing now."

And despite the prophets of gloom, he says 2008 might not be a "gang buster" but he does expect to see moderate growth with the Fed looking to lower prime interest rates to help stimulate the economy.

Coleman said his discussions with local businesses have not been filled with gloom and doom.

"People are looking for loans to buy cars, and other things," he said. "Some people are buying and selling their homes. It is not that bad."

T&D Staff Writer Gene Zaleski can be reached by e-mail at gzaleski@timesanddemocrat.com or by phone at 803-533-5551. Discuss this and other stories online at TheTandD.com.

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