UCF Economist: How Florida Got Its Groove Back
If Florida’s economic recovery was a romantic comedy, it could be called “How Florida Got Her Groove Back,” according to University of Central Florida economist Sean Snaith.
In his 2nd Quarter Florida Economic Forecast, Snaith notes that after enduring a recession that was longer and deeper than the national economy’s, Florida has surpassed the national pace of job creation and overall economic growth.
“We are a nation that reveres the underdog and adores a good comeback story. Florida’s economic turnaround fits right into that ethos,” he said.
The housing-market crash and surge in unemployment left Florida in financial ruin as the national economy took a dive. But by 2013, Florida’s economy regained its glow.
Baby Boomers who delayed their retirement plans due to the housing and financial crises are retiring again, and Florida’s housing market is enjoying years of double-digit price appreciation.
Even the weather contributed to Florida’s economic boost.
“The bitter cold of polar vertices that descended upon the northern U.S. this winter helped provide an unanticipated boost in tourism,” said Snaith. “The lure of sunshine and warm temperatures bolstered visitation in the first quarter of 2014.”
Snaith’s forecast this quarter offers long run predictions through 2044 for Florida and its 12 metropolitan regions. Those areas are Daytona Beach-Deltona-Ormond Beach, Gainesville, Jacksonville, Lakeland, Miami-Fort Lauderdale-Miami Beach, Naples-Marco Island, Ocala, Orlando-Kissimmee, Palm Bay-Melbourne-Titusville, Pensacola-Ferry Pass-Brent, Tallahassee and Tampa-St. Petersburg-Clearwater.
- During the next three years, it is predicted that Florida’s economy will expand at an average annual rate of 3.7 percent and payroll job creation will average an annual pace of 2.6 percent. Both measures are well above the pace expected for the national economy.
- Labor-force growth in Florida will average 2.3 percent from 2014-2017. A faster pace of job creation has been a breath of fresh air in Florida’s labor market. In the four preceding years the average growth of the labor force was just 0.9 percent.
- As of May 2014, 41.7 percent of single-family home transactions were cash sales, down slightly from a year earlier. This is the fourth year running at 40 percent or higher, implying continued investor activity in Florida’s housing-market highs.
- The growing labor force and rising labor-force participation rate will make the lowering of Florida’s unemployment rate more challenging. The pace of decline will slow dramatically and could reverse direction as labor force growth picks up. Despite this headwind, the unemployment rate should fall to 5.6 percent by the end of 2017.
- The sectors expected to have the strongest average job growth during 2014-2017 are construction, professional and business services, trade, transportation and utilities, education and health services, and leisure and hospitality.
- Retail sales will grow at an average pace of 4.9 percent during 2014-2017.
For the complete report, click here.
Snaith is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate.
Snaith also is a member of several national forecasting panels, including The Wall Street Journal Economic Forecasting Survey, CNNMoney.com’s survey of leading economists, the Associated Press Economy Survey, the National Association of Business Economics Quarterly Outlook Survey Panel, the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, the Livingston Survey, Bloomberg U.S. Economic Indicator Survey, Reuters U.S. Economy Survey, and USA Today Economic Survey Panel.
The Institute for Economic Competitiveness strives to provide complete, accurate and timely national, state and regional forecasts and economic analyses. Through these analyses, the institute provides valuable resources to the public and private sectors for informed decision-making.