the lifeblood of state commerce - sccompetes

Joseph Von Nessen, Ph.D.Research EconomistSeptember 8, 2020

[email protected]

The Lifeblood of State CommerceThe Economic Impact of S.C. Logistics on South Carolina

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-50.0%-45.0%-40.0%-35.0%-30.0%-25.0%-20.0%-15.0%-10.0%

-5.0%0.0%5.0%

South C

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Min

ing & Lo

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Constructio

n

Manufa

cturin

gTTU

Info

.Svs.

Financial S

vs.

PBS

Educ.&Health

Svs.

Leis.

&Hosp.

Other S

vs.Gov't

-5.1% -6.7%-0.6% -2.6% -4.1% -2.9% -1.3%

-2.4% -4.6%

-19.6%

2.5%

-3.6%

April July

S.C. Employment Growth by IndustryListed Growth Rates: July 2020 vs. July 2019

Source: U.S. Bureau of Labor Statistics

S.C. Employment Growth Trends

-14.0%-12.0%-10.0%

-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%

Jan.'18 Jul.'18 Jan.'19 Jul.'19 Jan.'20 Jul.'20

South Carolina Trans. & Warehousing


+2.4%

-5.1%

South Carolina Employment Changes

Time Period Job Losses/Gains

March 2020 to April 2020 -275,900

April 2020 to July 2020 +149,700

--------------------------------------------------------

Pct. of Jobs Recovered +54.3% for S.C. (vs. +44.6% for U.S.)


2020 Job recovery in S.C. is outpacing the

U.S.

(Year/Year Pct. Growth)

Real Personal Consumption Expenditures

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Consumer spending is approximately 70% of GDP!

Source: U.S. Bureau of Economic Analysis

Goals

(1) Document the current economic impact of SC Logistics on the Palmetto State

(2) Examine the evolution of SC Logistics over time given ongoing changes in market dynamics

Defining Logistics…

The processes associated with the flow of goods and services from a point of origin to the point of consumption

Internal/External Provider Functions

(1) Provider Functions: Logistics functions existing primarily to transport raw materials and/or final products from one firm to another or from a firm to a final consumer

(2) Embedded Functions: Logistics functions existing within a firm in service of that firm’s operations

LogisticsCluster

Embedded Functions

• Logistics defined as a set of related occupations, not as a set of related industries

• Master occupation listing obtained from U.S. Bureau of Labor Statistics Occupation/Industry Matrix

• Master list customized for South Carolina through data cleansing efforts

• Provider functions span 20 occupations; embedded functions span 2 occupations

S.C. Logistics – Size and Scope

Embedded Functions Int./Ext. Provider Functions

Occupation Description Total Employment Occupation Description Total Employment

Logisticians 2,910 Laborers and Freight, Stock, and Material Movers 64,150

Transportation, Storage, and Distribution Mngrs. 1,250 Heavy and Tractor-Trailer Truck Drivers 29,350

N/A N/A Light Truck Drivers 12,430

N/A N/A Industrial Truck and Tractor Operators 10,030

N/A N/A Packers and Packagers 8,420

Total Direct Employment in S.C. Logistics: 139,650Percentage of Embedded Function Occupations: 3.0%

Source: U.S. Bureau of Labor Statistics, Occupational Industry Matrix

Additional Occupations within S.C. Logistics


Int./Ext. Provider Functions

Occupation Description Total Employment

First-line Supervisors of Transportation and Material Moving Workers 6,860

Couriers and Messengers 1,690

Cargo and Freight Agents 1,660

Air Traffic Controllers 190

Airfield Operations Specialists 190

Sailors and Marine Oilers 180

Motor Vehicle Operators 130

Transportation Workers 130

Railroad Brake, Signal, and Switch Operators 80

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Breaking Down Components of S.C. Logistics

Internal Providers Total Employment: 87,807

External ProvidersTotal Employment: 47,683

EmbeddedTotal Employment: 4,160


Employment Growth Over Time

Category 2017 2020 Ann. Growth Rate

Embedded 4,007 4,160 +1.2%

Internal Provider 74,044 87,807 +5.8%

External Provider 35,814 47,683 +10.0%

Totals 113,865 139,650 +7.0%


A majority of logistics-related growth in South Carolina is due to the higher overall demand for transportation-based services.

The Economic Impact of the Logistics Cluster on South Carolina

South Carolina Economic ImpactTotal Employment: 139,650

Total Compensation: $6.8 billion

Total Economic Impact: $37.2 billion

Source: U.S. Bureau of Labor Statistics; S.C. Council on Competitiveness

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

113,865139,650

2017 2020

A Growing Impact: Employment


+7.0%annual growth

$4.00

$4.50

$5.00

$5.50

$6.00

$6.50

$7.00

$5.38

$6.76

2017 2020

A Growing Impact: Total Compensation


+4.4%annual growth

In B

illio

ns

$25.00

$27.00

$29.00

$31.00

$33.00

$35.00

$37.00

$39.00

$32.99

$37.17

2017 2020

A Growing Impact: Total Economic Output


+4.0%annual growth

In B

illio

ns

U.S. Average Hourly Earnings


0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Jan.'10 Jan.'11 Jan.'12 Jan.'13 Jan.'14 Jan.'15 Jan.'16 Jan.'17 Jan.'18 Jan.'19

U.S. Personal Consumption Expenditures

Source: U.S. Bureau of Economic Analysis

1.1%

1.3%

1.5%

1.7%

1.9%

2.1%

Jan.'13 Jan.'14 Jan.'15 Jan.'16 Jan.'17 Jan.'18 Jan.'19 Jan.'20

Average Annual Wage Comparisons


$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000

All Jobs in S.C.

All Jobs Supported by S.C. Logistics

Direct Jobs within S.C. Logistics (Provider)

Direct Jobs within S.C. Logistics (Embedded)

$45,189

$48,412

$47,547

$76,592

Evolution of SC Logistics

S.C. Tech

S.C. Logistics

Advanced Manufacturing

0.0%1.0%2.0%3.0%4.0%5.0%6.0%

2010 2020

1.7%

5.1%Increased Reliance on SC Tech

à The percentage of total expenditures made with SC Tech by the SC Logistics cluster has tripled over the past decade!

Source: S.C. Council on Competitiveness

Percentage of Business Purchases (inputs) from External Provider Firms

6.6% 3.1%Avg. S.C. BusinessAvg. Business within Advanced

Manufacturing

Source: S.C. Council on Competitiveness

Trends Among S.C. External Provider Firms

Logistics Emp. Growth S.C. Emp. Growth

2005-2007 +2.0% +2.0%2010-2015 +0.7% +2.5%2016-2019 +4.0% +2.2%

Logistics Employment Growth has Gained Momentum in Recent Years

Source: U.S. Bureau of Labor Statistics, QCEW

-12.0%-10.0%

-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

South Carolina Southeast

S.C. - 2010-2019: +17.5%Southeast - 2010-2019: +18.0%

Logistics Employment Growth(Graphed: 2-Year Rolling Average)


Logistics Cluster Growth Rate by Southeastern State

StateGrowth Rate (2010-

2016)State

Growth Rate (2010-2016)

Florida +27.6% Arkansas +6.7%

Kentucky +24.6% Alabama +5.5%

Georgia +15.5% South Carolina +5.3%

North Carolina +14.8% Tennessee +3.2%

Virginia +11.1% West Virginia +2.9%

Mississippi +9.0% Louisiana +1.5%


Logistics Cluster Growth Rate by Southeastern State

State Growth Rate (2010-2019) State Growth Rate (2010-

2019)

Florida +33.7% Tennessee +10.1%

North Carolina +30.4% Virginia +9.5%

Kentucky +27.2% Arkansas +9.2%

South Carolina +17.5% Alabama +8.1%

Georgia +13.3% Louisiana +6.4%

Mississippi +11.9% West Virginia -5.0%


The Future of S.C. Logistics

Embedded Functions as a Pct. of Total Logistics Employment


State Percentage Ranking

Virginia 5.7% 1Alabama 4.5% 2Georgia 3.7% 3Florida 3.2% 4

Arkansas 3.0% 5South Carolina 3.0% 6North Carolina 2.8% 7

Tennessee 2.7% 8Kentucky 2.3% 9

Mississippi 2.3% 10West Virginia 2.1% 11

Annual Growth in Embedded Functions Employment (2010-2019)


State Percentage Ranking

Florida 8.6% 2Mississippi 7.8% 3

Georgia 6.0% 4

Tennessee 5.3% 5Kentucky 4.7% 6

Arkansas 4.6% 7North Carolina 4.6% 8

Alabama 2.6% 9Virginia 2.3% 10

West Virginia -0.1% 11

South Carolina 15.7% 1

Embedded

Providervs.

Thank You!

the lifeblood of state commerce - sccompetes

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