- Associated Press - Saturday, December 5, 2015

COLUMBIA, S.C. (AP) - South Carolina’s economy is humming. The unemployment rate is at an eight-year low and lawmakers will open next January’s session trying to figure out how to spend an addition $1.2 billion in projected tax revenue.

Some of the recovery from the Great Recession was expected as part of a typical economic cycle. But University of South Carolina economists said South Carolina has also done some things well to encourage growth.

Here is what the state is doing well, what parts of the economy could be South Carolina’s best path to more growth and what might be the state’s biggest competitor:

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SOUTH CAROLINA’s GROWTH

South Carolina’s growth shouldn’t stop next year. University of South Carolina economists Doug Woodward and Jospeh Von Nessen are predicting the state’s economy to grow by nearly 3 percent in 2016.

Manufacturing helped South Carolina pull out of the Great Recession, but construction is catching up.

South Carolina officials made a smart decision by sticking to the state’s core advantages to help pull it out of the bad times, Woodward said.

“We didn’t turn our back on our heritage, which is in industry and manufacturing. If anything, that was a smart strategy relative to North Carolina,” Woodward said.

More people are also coming to the state. South Carolina added 200,000 people since 2010 and is approaching a population of 5 million, according to U.S. Census estimates.

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WHERE CAN SOUTH CAROLINA KEEP GROWING?

Health care is an obvious choice in a state where 16 percent of its residents are age 65 or over, compared to 12 percent just 15 years ago.

Major health care providers such as the Cleveland Clinic are looking at South Carolina, because of the number of people retiring here, Woodward said.

“We’re got a pretty strong health care sector. If we could make that transition now to become a destination,” Woodward said. “It’s odd, but the sicker people get, the better the economy does.”

South Carolina also needs to continue to emphasize tourism to keep increasing its population by taking people from other states, the economists said.

“People visit, and they keep it in mind. They want to come back here. They see a job opportunity, whether it is in Charleston or the Upstate, or they see a chance to retire. Tourism is a great asset,” Woodward said.

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WHAT CAN GO WRONG?

Infrastructure is key. The economists said South Carolina hasn’t suffered too much yet because of the poor condition of its roads, bridges and other public items. But that could change if nothing is done.

Woodward predicts lawmakers will address the problem soon, before industrial companies look elsewhere to expand or open new plants.

“I think they know that,” Woodward said. “The question is how do you get it done?”

Woodward praised work on the port in Charleston, and the inland port in Greer which uses a rail line from Charleston to the Upstate to move items to the hub along Interstate 85, taking trucks off Interstate 26.

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SOUTH CAROLINA’S BIGGEST COMPETITOR

It isn’t neighbors North Carolina or Georgia, Woodward said. Instead, look south to Mexico.

South Carolina and Mexico used to compete in textiles, leading to big fights over trade agreements in the 1980s. Now the United States’ Southern neighbor is going big into automobiles, which are important to South Carolina with established BMW in Spartanburg, Daimler Vans already near Charleston and Volvo building a new plant in the Lowcountry.

Bigger economic forces are also in Mexico’s favor, Woodward said.

“The strong dollar this year is not going to be good for our export-oriented manufacturing,” Woodward said. “Mexico is going to look much more favorable - the peso has declined.”

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