Across the forecasting spectrum, from academics to some government watchers to industry groups, there’s a cautious optimism about Florida’s economy in the new year, reports David Royse of the News Service of Florida.
From a recent gathering of economists at a Realtors conference, where the consensus was that the state has already started a bit of a recovery, to employment agencies, to the governor of the state, there’s a sense that finally, the state has turned the corner.
In Florida, where the economic heights of the middle of the last decade were propped up on a booming housing industry, it is in the real estate market that many economists are looking to gauge whether the crash has reached its low point.
And Florida Realtors Chief Economist John Tuccillo said at a recent real estate industry conference that indicators in that industry are good.
“Sales are trending up, listing inventories are falling … we are seeing multiple offers on homes in some local markets,” Tuccillo said. “Our state is in a mini-recovery.”
“Buyers have stepped back into the Florida market,” added Lawrence Yun, chief economist for the National Association of Realtors.
Those projections come as a business survey found hiring likely to increase after the first of the year, nationally. ManpowerGroup earlier this month released its Manpower Employment Outlook Survey, which said that after taking out seasonal variations, employers’ plans for the first quarter of next year are still to add jobs at a plus 9 percent clip, up from the fourth quarter and about the same as a year ago.
“This represents the most promising hiring outlook since 2008,” ManpowerGroup said.
Despite stubbornly high unemployment – 10 percent in November in Florida – and months of low consumer confidence readings, retailers are predicting the largest year-over-year increase in holiday shopping since before the recession, a very welcome sign that things are on the upswing.
The National Retail Federation said sales on Black Friday, the day after Thanksgiving, usually a harbinger of sales for the season, were up 6.6 percent over last year.
Yun said at the Realtors conference in Orlando that prices appear to be stabilizing in Florida, and that South Florida, in particular, is poised to see a new mini-boom.
“Don’t be surprised to see a gain in home prices in the Miami and Naples markets in the next 18 months,” he said in a recent statement put out by the Realtors. “From there, the recovery is likely to roll northward to Central Florida and then North Florida.”
This week, University of Central Florida economist Sean Snaith, agreed with the optimism, though tempering it with less bullishness about the pace.
In his latest forecast from the UCF Institute for Economic Competitiveness, Snaith said slow will continue to be a key word – he predicts unemployment in Florida will remain above 9 percent until the end of 2014 – but that some areas will see growth.
Payrolls and incomes are expected to creep up, retail sales will be much stronger, and housing starts will go up, Snaith predicts.
Still, he said, things won’t look like 2006-2007 for quite some time.
“The year is shaping up to be another year of subpar growth,” the institute said in its report. “Growth, to be sure, will continue and 2012 will be an improvement over a largely disappointing 2011, but economic growth for the year will (be less than) 2 percent and payrolls will expand by just 1.8 percent….
“The near term economic picture for Florida is for a modest acceleration of the pace of recovery, including the labor market over the next two quarters,” the report said.
But, Snaith noted, “the damage to our economy from the recession, housing and financial crises was severe, and the process of rebuilding will take time.”
State economists have come to share Snaith’s caution, after getting a bit giddy earlier in the year. Revenue forecasters for the state had projected strong growth numbers that back in the spring had given lawmakers hope that there might be state budget growth this year, or at least flat tax revenue. But after a couple months of warnings that taxes weren’t coming in as strong as first thought, economists in October reduced their projections fairly dramatically, slicing $1.6 billion from the state’s forecasted tax revenue over the next year and a half.
Much of Florida’s fate is tied to the national economy – as it goes so go the local economies to a certain degree. In Florida, that link is particularly acute because of the state’s reliance on people moving here, either in retirement or for new opportunities – when housing was booming, there was a stream of people moving to the state to take part in that boom – and people coming here on vacation.
Mark Vitner, a senior economist at Wells Fargo in Charlotte, N.C., said in a recent statement that the U.S. economy, in turn, is tied in part to the financial crisis in Europe. But, he also expects a national recovery to continue next year – and that, he noted, makes it easier for retirees and others in other parts of the country to sell homes and buy new ones in Florida.
It also means a recovery in tourism, which helps fuel Florida’s economy.
Gov. Rick Scott made a turn-around in jobs his primary goal. It’s been a mixed year – jobs have indeed been created and the unemployment rate has dropped more than in almost any other state, from around 12 percent when he was elected to 10 percent now. But the state’s jobless rate remains among the highest in the nation.
Scott, too, though is optimistic that the trend is in the right direction.
“We’ve turned the corner,” Scott said in an interview this week with The News Service of Florida. “This was a state that was losing jobs for four straight years and this year we’ve generated 134,800 private sector jobs. … So we’re heading in the right direction.”