By James T. Hammond
SCBIZ Daily Staff

COLUMBIA -- South Carolina’s construction sector has lost 16,000 jobs since July 2007, costing the state $516 million in construction wages, according to a new study by the state Employment Security Commission.

The commission study estimated that, if unreported construction is counted, in what it described as a “shadow economy,” the lost wages figure could grow by 40% to $750 million.

The commission reported last week that South Carolina’s jobless rate soared in August to 7.6%, the highest unemployment rate in 15 years. Construction and manufacturing jobs continued to be most at risk, the new data showed. The number of unemployed people increased almost 14,000 between July and August, straining the resources of the Unemployment Insurance Trust Fund.

The commission said it found links to the rate of home mortgage foreclosures, as filings are increasing and no end is in sight. Housing permits peaked in 2005 and have been declining since.

“South Carolina may see a decrease as much as 30% in housing permits authorizing housing starts in 2008,” the commission concluded.

The commission released its findings in a report titled The Mortgage Crisis of 2007 and 2008: Its Influence on Construction Employment and The Greater Economy.

“The crisis is still very dynamic and data is suggesting this crisis may have the most significant impact on the nation’s economy since the Great Depression of the 1930s,” the report states.

“While there are mixed views from various economic professionals about how much of an impact the mortgage/housing crisis will have, it is evident the U.S. mortgage crisis has far-reaching influence on many industries across the nation and around the world, above and beyond construction,” the report states. “The final chapter in this historic event is yet to be written.”

In the new-home sector, the study concluded that overbuilding and the increased foreclosures have increased the number of unsold homes to near historic levels. The result, the study said, is sharp shrinkage in new home construction.

Foreclosures between January 2007 and July 2008 were the highest in Lexington County, followed in order by Richland, Anderson, Charleston, Greenville, Spartanburg, Berkeley, Horry, Beaufort and Sumter counties.

Statewide, foreclosures soared 223% in July when compared with July 2007.