New economic report shows future is bright
Florida’s economy continues to outpace the nation and is evolving in ways that enhance the state’s long-run competitiveness, according to a new report by economists at Wells Fargo Securities. Production, trade, employment, and home building are all up, despite hurricanes and other calamities, with the state poised to continue to benefit from federal tax reform.
“Its strong performance is particularly noteworthy given the severity of the Great Recession in Florida, and the considerable adversity the state has faced from devastating hurricanes, citrus greening, constant trade uncertainty and slower global economic growth,” according to Wells Fargo Senior Economist Mark Vitner, a long-time and respected voice on Florida’s economy. He authored Florida Economic Outlook: June 2019
According to the report:
- GDP grew 3.5% in 2018, about half a point faster than the U.S. average
- Net population grew 322,510
- Unemployment is 3.4%, outperforming the U.S. average
- Three of the ten fastest growing metro areas remain here: The Villages, Cape Coral-Fort Myers, and Orlando
The report forecasts Florida’s economy to continue to perform at a high level, even though some tailwinds will dissipate. After rising 3.5% throughout 2018, the forecast calls for real GDP to rise 3.8% this year. Nonfarm employment should rise 2.5% and the unemployment rate will likely fall slightly further. Homebuilding is expected to remain strong, particularly in areas attractive to retirees, while commercial building has strong momentum.
“We expect economic growth to moderate this year, as the national economy slows,” Vitner wrote. “Florida is poised to remain one of the nation’s fastest-growing states, however, and growth remains remarkably broad-based across industries and geographies.”
The report notes some of the moderation reflects the economic impact of Hurricane Michael, which struck the Panhandle last October. Vitner writes that the data tends to exaggerate the effects of hurricanes on economic growth, particularly in the short-term. Of course, the rebuilding adds to reported growth in following years. As we know, insurance payouts add tremendously to post-hurricane construction boons and represent a silver lining later to the immediate devastation.
LMA Newsletter of 7-1-19