Robust industrial growth continues statewide
- Positive absorption, new construction and rising rental rates are expected throughout South Carolina markets in 2018.
- New legislative bills and tariffs will not hinder the South Carolina industrial market’s success.
It is clear that federal policy will affect the industrial market within South Carolina with new legislation. Many business owners are contemplating whether the outcome will be positive or negative, but the statewide industrial market continues to grow quickly. Two major governmental policies that are frequently discussed are the Tax Cuts and Jobs Act (TCJA) and Section 232 of the Trade Expansion Act.
In 2018, the widespread effect of the TCJA tax law will include benefits for pass-through businesses such as limited liability companies, S corporations and partnerships, who will be able to receive tax rate deductions. While the increased tax deductions may not spur individuals to become investors, it may incentivize current investors to reinvest their tax savings in real estate. Also, corporate tax cuts will be permanent and will not fade over time like the individual and pass-through tax cuts will; therefore, corporations will have more money to spend or use to plan future developments, which is a positive sign for the expanding South Carolina industrial market.
In addition to the TCJA, business owners in South Carolina are having lively discussions about the passing of Section 232 of the Trade Expansion Act: the steel, aluminum and solar cell tariffs. While the motivation for the tariff act was to protect U.S. manufacturers, businesses fear it will cause a spike in prices for all steel and aluminum products. The industrial market has reason to worry this tariff will adversely affect the construction industry by causing delays and building material shortages. Due to the vast increase in global trade activity, many South Carolina businesses are also concerned about retaliation from U.S. trading partners.
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