The takeout-only food court at South Carolina’s reopened Anderson Mall on Friday, April 24.
Photo: Dustin Chambers/Bloomberg NewsCOLUMBIA, S.C.—Ghulam Mustafa was back at his jewelry stand at a shopping mall for the first time in weeks. Many of the stores around him remained closed, and few shoppers walked the halls.
As states start to loosen stay-at-home orders, businesses such as Mr. Mustafa’s are slowly coming out of hibernation. Economic activity, however, isn’t.
“I had one sale,” Mr. Mustafa said a week ago.
South Carolina Gov. Henry McMaster eased restrictions imposed to slow the spread of the coronavirus, allowing retailers to reopen April 20. But a look at traffic congestion and hours worked in South Carolina and other states in which lockdowns have eased indicates workers and consumers haven’t resumed their pre-pandemic routines.
Small-business owner Birl Hicks helped a customer at the Area 57 store in the Columbia Place Mall, one of the South Carolina businesses that have reopened since April 20.
Photo: Sean Rayford/Getty ImagesThe early experience in South Carolina and other states is a sobering portent for the country as a whole, suggesting it will take more than lifting lockdowns for economic activity to rebound.
It also illustrates the limits of policy makers’ influence when residents’ and businesses’ behavior depends on their own perceptions of risk. In many places, activity shut down long before governors issued their stay-at-home proclamations. The data so far suggest it will take a while after orders are lifted for the economy to pick up again.
“It’s not like you flip a switch and everything is healthy and back to where it was before,” said Frank Hefner, an economist at the College of Charleston.
South Carolina, along with other Southeastern states such as Georgia and Tennessee, is at the vanguard of a movement across the country to reopen. States from Connecticut to California are weighing lifting restrictions on businesses, and President Trump has at times encouraged them. A revival of growth is important to his hopes for re-election this fall.
But an open restaurant or store won’t help the economy much if customers don’t come. For now, most households appear more concerned about the health risks of the coronavirus than returning to normal life. Two-thirds of respondents said they would be nervous about leaving their homes even if businesses were open, according to an Ipsos survey conducted April 16-19. And 59% said businesses should remain closed until the virus is fully contained.
Shoppers went inside the Sid & Nancy consignment store in Columbia, while others had coffee, a few days after Gov. Henry McMaster eased restrictions.
Photo: Sean Rayford/Getty ImagesAbout 61% of respondents to a University of Michigan survey cited health risks as their most important concern about the coronavirus. Only 13% said they were most concerned about being isolated.
That suggests people will need to feel safe before they venture outside, regardless of what their governors say, Richard Curtin, the survey’s director, wrote in an April 17 report. “Individual consumers will form their own judgments about the risks,” he wrote. “Consumers’ judgments will be based on science, experience and emotion.”
Even after health worries have eased, economic worries could persist. It will take a while for people—many of whom have lost jobs—to feel comfortable spending again, Joseph Von Nessen, an economist at the University of South Carolina, said. He estimates South Carolina’s unemployment rate is now between 10% and 15% and could remain in double digits through the end of the year.
Many South Carolinians seem to prefer staying put for now, even if doing so costs them. Jim Rathbun, a 73-year-old pecan farmer in Lady’s Island, used to sell his wares at a market in Port Royal. Lately he has limited his movements to early-morning grocery runs and said he isn’t sure when he will feel comfortable leaving the farm. “It will be a gut thing,” he said. “We will be more apprehensive about going out until this really starts leveling out.” If people want to buy his pecans and wooden bowls, they have to come to him, and only by appointment.
Randy Dennis, a Columbia resident, isn’t ready to reopen his women’s clothing store. He is hopeful there could soon be a meaningful slowdown in the number of reported Covid-19 cases and deaths and said he would be comfortable reopening his store when that happens. But he is worried looser restrictions will lead people to grow complacent, resulting in more cases. “We can’t start making new rules and justify them by saying, ‘I feel comfortable so my customers will feel comfortable,’ ” he said. About 6,000 people have tested positive for Covid-19 in South Carolina, according to the Covid Tracking Project, with total cases growing by about 200 a day.
Elizabeth Sebulski, manager at Bargain World in North Myrtle Beach, said business has been pretty steady, with some shoppers coming from North Carolina, 10 miles away.
Photo: Justin Baer/The Wall Street JournalResearch by economists from the University of Illinois, Urbana-Champaign, the University of Chicago and the University of California, Berkeley, finds that small businesses didn’t wait for their governors’ stay-at-home orders before paring back and aren’t rushing to reopen as orders are lifted.
Hours worked at small businesses fell dramatically around the country in mid-March, several weeks before many of the orders were issued, the researchers found, based on data from Homebase, a scheduling software company. In South Carolina, Georgia and Tennessee, hours didn’t rebound in the days after restrictions eased.
“It does suggest that state governments can’t entirely control this by themselves,” said Alex Bartik, an economist at the University of Illinois, Urbana-Champaign, who is one of the authors. “There’s a lot that depends on what’s going on with the national economy and how people are perceiving the risks of the virus.”
Some people have responded to the easing of South Carolina’s restrictions. A flea market outside Charleston was open this past weekend, though traffic was light. “I just had to get out of the house,” said Alex Garris, as he browsed the stalls. At Bargain World, a beachwear outlet in North Myrtle Beach that reopened Tuesday, business has been “pretty steady,” said manager Elizabeth Sebulski. Many shoppers came from North Carolina, just 10 miles to the north, she said. That state’s stay-at-home order remains in effect.
Still, traffic data for Charleston, S.C., and Atlanta compiled by TomTom, a location technology company, suggest reopened retail stores and restaurants haven’t lured many people out. Congestion levels over the past few days haven’t changed much since the South Carolina and Georgia eased orders and remain well below mid-March levels.
Another complication is that any state’s recovery will depend in part on global supply chains and on decisions made by customers outside the state. About a fifth of South Carolina’s economy rests on tourism and manufacturing, both of which depend on demand beyond the state’s borders.
Consumer confidence posted the sharpest drop on record in April, making it less likely families will flock to South Carolina hotels this summer. Manufacturers with plants in South Carolina include Boeing, Volvo and BMW, which ships roughly 70% of the cars it produces in the state overseas. That makes South Carolina heavily dependent on global demand. Factories were exempted from Gov. McMaster’s lockdown order, but many shut anyway. They are now preparing to restart.
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Even though retailers can reopen, life remains far from normal. South Carolina schools are closed through the rest of the academic year, so many parents can’t return to work. Hotels and tourist attractions are shut, and many local governments have kept beaches off limits to the public.
In a typical year, North Myrtle Beach’s population swells to 150,000 by July, said Cheryl Kilday, president of the city’s chamber of commerce. That won’t happen this year, she said. The town lost most of its spring tourist season and has halted marketing plans for now.
“We hope to have a good, solid fall,” Ms. Kilday said.
Sun bathers and walkers near the Second Avenue Pier area of Myrtle Beach this past Wednesday.
Photo: JASON LEE/Associated PressWrite to David Harrison at david.harrison@wsj.com and Justin Baer at justin.baer@wsj.com
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