It’s hard to believe that we’re already two months into the new year of 2016, but things are beginning to feel differently across the Charleston Industrial market. The slowdown in China has been felt at all U.S. ports, as the shipping industry struggles with over-capacity. The continued lack of real estate lending, due mostly to over-regulation, constrains the supply of new spec product. With the Panama Canal widening now at 95% complete, the anticipated seismic shift from west to east coast ports won’t be fully felt for at least another 12 months.
Locally, the big industrial announcements we cheered in 2015, namely Boeing, Mercedes Benz Vans and Volvo Cars, are all “work in process”. Each major site is laying the necessary groundwork for a future labor force and this expansion phase takes a lot of time. Expect the pace of many new announcements to slow as our market needs time to digest what we have before us.
Leaders across Charleston, Mount Pleasant and Summerville are all tapping the brakes on new development, as residents rightly ask to catch their breath and assess the long-term implications of all of this activity.
We have entered the inevitable stage of the economic cycle where everything seems to drag on longer than before, a condition business people are very familiar with: the “election year slowdown”. The most unpleasant part of business is watching the political dysfunction at the national level have a paralyzing effect on industry. This pathos then flows down to local markets and smaller businesses.
Fortunately, our Country is Greater than any one man or woman who may occupy our highest office. With this in mind, I say add risk cautiously, but always bet on the resilience of the American economy and our way of life. Expect a great release of pent-up energy near the end of 2016, as we get back to business…and business will be good!
Next month: “New Players Expand the Bench”