Experts are predicting a bumpy 2016 for South Carolina’s manufacturing industry. With a strong U.S. dollar reducing the demand for American goods overseas, the entire American manufacturing industry is suffering.
This national manufacturing decline, which began in 2014 and has continued ever since, is due to a combination of factors. Among them: A strong dollar that’s made U.S. goods more expensive internationally, low oil prices, the upcoming U.S. presidential election and a weaker Chinese economy.
And it’s hitting South Carolina particularly hard.
Across America, manufacturing makes up 12.5% of the GDP, with 8.8% of workers in manufacturing jobs. But in South Carolina, it makes up a much larger 17.3% of GDP and 11.8% of workers. Naturally, a weak manufacturing industry has a strong impact on the state.
Fortunately, it’s not having the same negative impact on all of South Carolina’s manufacturers. Though the aluminum industry has been especially hit due to cheaper competition from China, car manufacturers like BMW continued to thrive, setting record sales and production in 2015.
Despite the weakening economy, there is some hope. The industry experienced a slight rebound in January for the first time since 2014. Still, the slump is not expected to go away anytime soon. Instead, experts believe there will be a period of prolonged weakness before things begin to improve.
Even with the hopeful outlook, there are larger issues facing South Carolina’s manufacturing sector: An intense need for qualified workers and the declining use of coal, which requires manufacturers to use costlier forms of energy. If these two issues aren’t addressed in a meaningful way in the near future, South Carolina’s manufacturing slump will require a much bigger jolt than an improved U.S. economy.
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