Florida & Metro Forecast: ’Tis the Season for Continued Florida Growth
Santa and his reindeer might have to dodge a few blue tarps on rooftops this Christmas Eve, but that shouldn’t dampen Florida’s holiday spirit as the state’s economic growth continues to outpace the national average, says University of Central Florida economist Sean Snaith in his fourth quarter forecast.
“Even Hurricane Irma, doing its best Grinch impersonation, was not strong enough to derail Florida’s economy,” said Snaith, director of the UCF Institute for Economic Competitiveness, which produces the quarterly Florida & Metro Forecast. “Less than three months after the Category 4 storm devastated a good portion of the state, Florida’s growth is returning to trend with job and personal-income growth accelerating faster than the national average and the housing market continues to heat up.”
The latest Florida & Metro Forecast shows Florida’s economy, as measured by Real Gross State Product, expanding faster over the next four years than the U.S. Real Gross Domestic Product. Average annual growth during 2017-2021 is expected to be 3.4 percent, which is 0.6 percent higher than the Institute for Economic Competitiveness’s forecasted average for U.S. Real GDP growth over this period. Real Gross State Product will expand by 2.8 percent this year and 4.1 percent in 2018 and 2019 before easing to 3.1 percent in 2020 and 2.8 percent in 2021.
Payroll job growth in the state continues to outpace national job growth. The forecast shows year-over-year growth averaging 2.5 percent in 2017, 2.4 percent in 2018, 2.3 percent in 2019, 1.7 percent in 2020, and 1.5 percent in 2021. Average job growth over the 2017-2021 period will be 0.8 percent faster than the national economy.
Although Irma’s economic impacts are expected to be short-lived, Snaith said the sectors most impacted will be Florida staples—Leisure & Hospitality saw significant short-run job losses that will take several months to recoup, and Construction, with its already strong growth, will be significantly boosted by repair and rebuilding efforts. The forecast shows labor force growth in Florida averaging 2 percent from 2017-2021. The sectors expected to have the strongest average job growth during 2017-2021 are Construction (6.4 percent), Professional & Business Services (4.8 percent), Financial (2.4 percent), Manufacturing (1.7 percent), Education & Health Services (1.7 percent), and Trade, Transportation & Utilities (1.4 percent). Real personal income growth will average 4.1 percent during 2017-2021, starting with 2.5 percent growth in 2017, rising to 4 percent in 2018, 5.6 percent in 2019, 4.4 percent in 2020 and 4 percent in 2021. Florida’s average growth will exceed the national rate by 0.6 percent over that four-year span.
Snaith said housing starts will accelerate going forward, but not fast enough to completely ease the shortage of single-family housing. The hurricane recovery efforts will further squeeze the market for construction labor.
Total housing starts are expected to be 114,543 in 2017, 146,141 in 2018, 163,689 in 2019, 173,499 in 2020 and 179,315 in 2021.
In addition, retail sales will grow at an average pace of more than 5.25 percent during 2018-2021—after some short-term, hurricane-related volatility—boosted by a stronger national economy, continued strength in Florida’s labor market and rising household wealth. \
For the full forecast, visit: https://issuu.com/ucfbusiness/docs/fl_metro_forecast_dec_2017
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.
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.