South Carolina’s economy entered a softer patch in late 2025 as the state shed jobs across several sectors, according to a new TD Economics Report.
TD’s state economic forecast said the impact appeared more pronounced in trade-exposed segments, such as logistics and manufacturing. It also said tariff uncertainty and now an oil shock are both downside risks.
“But we expect this latest slowdown to prove more of a pause instead of a turning point. With a large investment pipeline and supportive policy tailwinds, we anticipate growth in 2026 will advance at a pace of 2.5 percent – one of the better showings in the region,” the report said.
It also said:
What keeps the outlook constructive is the scale of the investment pipeline, particularly in manufacturing and energy. South Carolina remains a magnet for investment, which will be further supported by measures in the OBBBA. Boeing recently broke ground on its $1B expansion project that will help expand 787 Dreamliner production and generate 1000 jobs. In solar manufacturing, First Solar is investing roughly $330M to establish a new facility in Cherokee County, creating 600 jobs, with operations expected to begin in the second half of 2026. In autos, the SODECIA AAPICO JV is investing $120M to open its first South Carolina facility in Orangeburg County (390 jobs). Given South Carolina’s status as the most trade exposed state on the East Coast, tariff uncertainty remains a meaningful swing factor, though the investment pipeline suggests firms are looking through the near term challenges.
High tech investment is also gaining traction, with large data center projects providing support. TigerDC's cancelled $3B data center does mark a setback, but several other initiatives are being followed through. For instance, in Marion County, “Project Liberty” involves a $2.4B data center campus. Meanwhile, in Greenville County, DartPoints is investing $125M to expand its data center facility.
Even with a late year wobble, employment was up 1.4 percent year-on-year in December – the second best showing on the East Coast behind North Carolina . At the same time, the unemployment rate rose to 4.8 percent (from an earlier low of 4.1 percent in mid-2025), in part reflecting unusually strong labor force growth. South Carolina’s labor force is up 2.5 percent year-on-year, the largest increase on the East Coast. This reflects solid population growth, with the state less reliant on international migration, and domestic inflows holding up better than in many peers last year. Population growth is still expected to lead the region this year, despite cooling from 1.5 percent in 2025 to about 1.2 percent in 2026. “We expect investments, such as those mentioned above, to help boost hiring ahead, which combined with a moderate cooling in population growth should help nudge the unemployment rate lower later this year.”
Housing is beginning to stabilize, following a weak showing last summer. Sales activity is still muted (down 3 percent y/y in January), in line with the national experience. But with inventory remaining relatively tight (at 3.7 months’ supply), home price growth has managed to turn positive recently. Housing conditions should continue to improve as borrowing costs ease a bit further and hiring picks up pace. Prices are forecast to advance 2.3 percent in 2026, with this profile reflecting an improving pace as 2026 unfolds to above 3.5 percent (annualized) by the year's end.
Comments
No comments on this item Please log in to comment by clicking here