Florida Growth Now Forecast Below 2%
Around the State
Little optimism emanated from state economic forecasters as they looked to Florida’s future growth on the morning after President Obama’s national jobs speech.
Construction, employment, wages and even in-state travel will have to show greater improvement before any rebound can start to be seen, according to members of the Florida Economic Estimating Conference.
While growth remains on a slight uptick in each area, the forecast numbers for each area have been slightly downgraded since the group’s prior estimates were released in February.
Amy Baker, head of the state's Office of Economic and Demographic Research, said the updated forecast indicates less improvements for the coming 18 months than previously predicted.
“When we did our last forecast, the national forecast was predicting a fairly sharp rebound and activity beginning this fiscal year in January and continuing into next year, and we brought that forward into a lot of our forecast,” Baker said. “But that snap back is not in the national forecast anymore. They have improvement in '11-'12, but '11-'12 are now virtually the same in terms of housing starts.”
A big reason for the continued sluggishness is the continuing cycle of consumers holding off on big-ticket item spending -- such as cars and homes -- until they see signs that employment will improve, while employers are waiting to see consumer spending increase.
In the field of new car sales, motorists have been holding onto their vehicles longer, with the average age of vehicles on the road now at 11 years.
Meanwhile, the state's economic numbers show residential construction will remain fairly stagnant due to stock of unsold homes and short sales.
Overall, members of the estimating conference on Friday downgraded year-to-year growth in Florida from slightly higher than 2 percent to just below 2 percent over the next two years, saying they didn’t expect unemployment numbers to drop quickly in coming months.
Two areas projected to see better times in the days ahead remain the Florida staple of service-related jobs as well as some foreign tourism, primarily from Asian and Latin American countries, where the economies are on more solid ground.
Overseas visitors in 2011-12 are now expected to increase 6.8 percent to 7.8 percent, rather than decrease from the past fiscal year. Meanwhile, in-state travel by Floridians is forecast to grow 1.1 percent to 2.1 percent, rather than 2.3 percent.
The recent forecast comes two days after state lawmakers were informed that while revenue was $70 million less than expected in the past two months, no budget shortfalls are projected through 2015.
Contact Jim Turner at email@example.com or at (850) 727-0859.