By Bob Bouyea
Executive Editor

South Carolina’s economy is slowing but there are no signs of a recession, according to Paulo Guimaraes, a clinical associate professor in the Moore School of Business’ division of research at the University of South Carolina.

While he predicts slower growth for employment and personal income, what is puzzling is that people aren’t spending, said Guimaraes during the 27th annual Economic Outlook Conference on Monday.

“This is what’s got us worried. We don’t see any spending,” he said.

Statewide retail sales are projected to grow 3.1 percent, just slightly above the inflation rate.

Douglas Woodward, director of the division of research and professor of economics at the Moore School of Business, said part of the issue is psychological. And $100 a barrel oil is playing into that.

“Consumers are sensitive to gas prices. They get nervous when they see increases at the pump,” he said. “Increases in energy costs will affect other areas of spending.”

And if consumers and businesses continue to curtail spending, the unemployment rate could climb higher. Guimaraes predicted that the unemployment rate should stay around 5.8% for the state.

Another area of concern is in the construction industry, a major growth area for the state in the last decade. Single-family housing permits should be off 11.4% in 2008, following a 24.7% slide in 2007. The Charleston and Myrtle Beach areas will be the hardest hit with permits down 20% and 42% respectively, Guemaraes said.

On the brighter side, the economist also predicted that the state will gain around 21,000 jobs in 2008, a 1.1% increase which is down from 1.4% in 2007. The majority of this growth will occur in the leisure and tourism industry and the health services industry.

Also personal income is expected to rise 4.8 percent next year, down from 6.1% in 2007.

“There is more economic uncertainty right now than any time I have seen in 20 years of presenting an annual forecast for the state,” Woodward said. “We see more economic weakness than strength going into 2008.”