Historic Charleston is a beautiful city with lively music, great Georgian architecture, smart hotels, good restaurants and high quality retail. And the tourism is going well – hotel occupancy this June was a very healthy 87.6%, with revenues for the year to date up 8% on a year ago. Condé Nast Traveller Magazine last year named Charleston the world’s top tourist destination.
But the economy depends on much more than tourism. The port is the 4th largest in the US. There is a heavy dependence on US defence spending with 10% of all jobs based on the military.
The Boeing Dreamliner is assembled in North Charleston and production of this is now set to double to 10 a month by the end of 2013.
BMW makes its sports utility vehicles (the X3, X5 and X6) and its sports cars (Z4 and previously the Z3) in Spartanburg nearby and they are distributed around the world through the port of Charleston.
Joint Base Charleston is the host to the US Navy’s Space and Naval Warfare Systems Command with the mission for the US to ‘maintain information dominance’. The spin off from this into other information technology businesses locally is impressive and Charleston is one of the US’s information technology hotspots.
As a result, although Charleston was very badly hit by the recession with employment falling 5% in a year in 2009, the loss of jobs has been fully reversed in the past 4 years. House prices have been edging up for 3 years now and the number of home sales in 2012 was nearly back to its pre 2007 peak.
As Americans drift towards attractive places to live, the outlook for Charleston’s economy would be highly impressive. But there is a fly in the ointment – the 25% cut in defence spending projected by 2020. This is bound to hit a centre so dependent on defence spending. But I would judge that given the underlying dynamics of the economy, it should be possible to absorb these cuts, even if economic growth is subdued for a period.
Douglas McWilliams, Cebr Chairman
For other updates in Doug’s US series, please see: