North Augusta Economic Outlook Discussed at Chamber of Commerce Meeting
North Augusta, South Carolina – On December 10, 2024, Dr. Nancy Albers, the dean of the USC Aiken School of Business Administration, addressed local business leaders at the North Augusta Chamber of Commerce to share insights into the near-term economic outlook for Aiken County. Albers presented data illustrating the current economic landscape and potential future trends influenced by various factors, including housing affordability, labor market conditions, and construction growth.
Rising Interest Rates Impact Housing Affordability
One significant point raised by Albers was the anticipated decline in housing affordability in Aiken County. A report projected that the Housing Affordability Index will drop to 0.85 by 2025, falling below the healthy level of 1.0. This decrease in affordability, as Albers explained, is primarily due to rising interest rates that make it more difficult for families to secure new mortgages, particularly for smaller “starter” homes. A lower index suggests that homes are becoming less affordable for the average family, placing additional stress on the housing market.
Construction Growth Amid Challenges
While discussing the construction sector, Albers noted an increase in new construction permits issued in 2023. However, she cautioned that the industry faces challenges due to labor shortages and ongoing supply chain issues. “Post-storm rebuilding” efforts following Tropical Storm Helene could lead to modest growth in construction, estimated between 2% to 3%. This growth is expected to focus more on infrastructure rather than residential home construction.
Long-Term Economic Factors
Albers also highlighted the significant investment by Meta Platforms in the area, particularly its recent $800 million commitment to develop a data center at Sage Mill Industrial Park. While the precise impact of this investment on the local economy is yet to be fully assessed, Albers indicated that it would contribute positively to the area’s economic development.
Further insights from Albers revealed current economic conditions are influenced by a combination of interest rates, inflation, the labor market, and consumer spending. She explained that rental markets are becoming more competitive due to higher demand stemming from rising home prices, which keeps vacancy rates low. The rental market, therefore, is expected to see some increases in prices, although not as steep as in previous years.
Future Labor Market Improvements
Looking ahead, Albers projected a growth of South Carolina’s labor force, potentially increasing by up to one-third in key industries such as education, energy, healthcare, manufacturing, and professional services. This growth is essential due to a longstanding labor shortage that businesses have faced in the state. Albers emphasized that such a development would require better training and alignment of skills with industry needs.
Institutional Initiatives in Education
As part of the solution, Albers noted that USC Aiken is taking proactive steps by implementing “micro credentials” within its curriculum to align educational outcomes with market demand. These micro credentials—certifications from major companies—validate a student’s skills, particularly in technology and business sectors.
In conclusion, while the near-term economic outlook for Aiken County shows some challenges, particularly regarding housing affordability and labor market shortages, the foundation for longer-term growth appears to be in place with educational initiatives and significant investments. Albers’ insights provided a comprehensive view of the interconnected factors shaping the economy today and into the future.
