November 2018 FL Economic Outlook

November 9, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

The Florida Economy Gained Momentum in 2018

The Florida economy continues to show strength as the economic cycle matures. Florida businesses are benefitting from tax reform and the state’s competitive cost structure. This in turn has led to job opportunities which continue to draw workers into the state. The pace of hiring in 2018 has been particularly strong as Florida added 182,400 jobs through September. This is more jobs than the state created in all of 2017. With the state’s unemployment rate sitting at 3.5 percent as of September, we expect job growth to moderate somewhat heading into 2019 as Florida’s labor markets continue to tighten. The Florida economy also continues to benefit from improving domestic demand. U.S. consumer demand and consumer sentiment are strong positives and gas prices remain relatively cheap supporting increased travel into the state. According to Visit Florida, the number of domestic travelers visiting Florida was up 6.8 percent year to date in Q2. An overall growing U.S. economy also supports Florida’s housing market as individuals look for either rental properties or move into the state for retirement. Florida’s housing market continues to show positive momentum, bucking the national trend which has been cooler heading into the second half of 2018. Growing demand for Florida housing should support ongoing construction into next year. While Florida economic activity was solid through Q3, it is uncertain how Hurricane Michael will impact the state’s data for Q4. U.S. employment totals for October did not appear to be impacted by the storm. As with most natural disasters, while a storm can lead to business and personal losses, total economic losses are challenging to measure. In well insured areas, the rebuilding effort from hurricane damage often leads to renewed economic momentum.

For a PDF version of this report, click here: November 2018 FL Economic Outlook

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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August 2018 FL Economic Outlook

August 13, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Moderate Expansion for the Florida Economy

    The Florida economy remains on good footing as we head into the latter portion of 2018. Florida has experienced a steady economic expansion since 2012 which helped push the state economy to over $1 trillion in Q2 of this year. While we expect the current economic expansion to continue for the next couple of years, some of the underlying economic indicators may be near or past cyclical peaks. After peaking in 2015 and 2016, with job growth north of 3 percent, Florida’s job creation engine moderated considerably in 2017. So far in 2018, the state has added a net 99,400 jobs through June, which is slightly better than the pace set in the first six months of 2017. However, tighter labor markets, with the state’s unemployment rate now down to 3.8 percent as of June, will be a limiting factor on the pace of hiring moving forward. Population growth has also been a strong driver of the Florida economy in recent years and is expected to moderate moving forward. Our Florida population forecast was given a temporary boost at the tail end of 2017 as people migrated from Puerto Rico following last year’s hurricanes. Going forward we expect population growth to return to trend and net migration to be driven by job seekers and retirees. While we do not believe that we are past peak housing in the Florida market, there are notable headwinds for construction and home sales. Florida multifamily housing starts have been range-bound in the realm of 30,000-40,000 units since 2015. Single-family housing starts are showing a more discernible growth trend through mid-2018. However, according to Florida Realtors, the year-to-date sales of single-family homes is flat relative to the same time last year. Tight housing supply, rising mortgage rates and a strong U.S. dollar are possible headwinds for Florida’s housing market in the near-term.

For a PDF version of this article, please click here: August 2018 FL Economic Outlook

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Revised Data Changes Florida History, But Economy Still on Good Base

May 14, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Florida had a little less momentum heading into 2018 than originally anticipated. In our February forecast, the official Bureau of Labor Statistics data showed Florida added 213,500 jobs in 2017. That number was revised down by 23 percent, to 163,900 by the BLS earlier this year. Florida’s real gross domestic product also saw a significant downward revision, including a quarterly decline in the second quarter of 2017. The main reason for the weak Q2 real GDP number was a negative revision to government sector GDP. If we look at Florida real GDP for 2017Q2 less the government sector, or total private sector real GDP, it would have been up by 1.4 percent. After 2017Q2, economic activity in Florida rebounded in the second half of the year, with continued momentum into the first quarter of 2018. Strong demand is fueling Florida’s housing industry. The months’ supply of single-family homes for sale in Florida was a tight 3.8 months as of March, according to Florida Realtors. Tight supply of single-family homes is supporting construction activity throughout the state’s major housing markets. While the number of multifamily housing starts have stabilized around 2016 levels, single-family construction continues to rise. Florida single-family housing starts were up to a 90,000 unit annual rate in the first quarter of this year, the strongest reading since 2007. This boosted hiring in Florida’s construction sector, which added 15,800 jobs in the first quarter of 2018. The state is also seeing strong growth in its real estate rental and leasing services industry, which is a significant factor in the Florida economy. Florida’s housing sector is expected to see ongoing positive momentum through the second half of 2018, supporting our expectations for a moderate expansion for Florida’s economy this year.

For a PDF version of this report click here: FL-Outlook-0518.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.
 

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Florida Economy in 2018: People, Jobs and Housing

February 13, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

The Florida economy saw a strong rebound in economic activity as job growth came roaring back in 2017Q4. We expect the state economy to keep this momentum headlining into 2018, supported by positive demographics, sustained gains in the labor market and an improving housing sector. A large number of people continue to migrate into the state, adding about 305,000 new Floridians from 2016 to 2017. Helping to draw workers to the state is Florida’s job engine, which is firing on all cylinders as the three large private sectors of manufacturing, construction and services saw strong job gains again, up 204,700 jobs in 2017. This is creating a virtuous cycle of more people, more demand and more jobs. This is also putting more pressure on home prices as increased housing demand collides with tight home inventories. According to Florida Realtors, the months’ supply of single-family homes for sale were down to 3.6 months as of December. A months’ supply of 5.0 to 5.5 months would be considered a more balanced market. Florida existing home sales, which makes up the much larger portion of the state’s overall housing market, were flat in 2016 and 2017. The supply of new single-family homes, which were up 10 percent in 2017, can help fill that gap. While we expect to see ongoing gains in Florida’s single-family housing starts in 2018, a shortage of construction workers, along with uncertainty surrounding declining affordability through higher mortgage rates, will constrain the number of new housing projects this year. This means tight inventories for Florida’s single-family housing market are likely to persist through 2018, keeping pressure on prices.

For a PDF version of this report click here: FL_Outlook_0218

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Florida Economy Recovers After Irma

November 14, 2017 by Robert A. Dye, Ph.D., Daniel Sanabria

The Florida economy will rebound following the slowdown from Hurricane Irma. While this may seem counter-intuitive, storms can actually drive up economic growth in the ensuing periods due to the recovery and rebuilding efforts. One immediate impact of Hurricane Irma was the loss of jobs as people and businesses pre-pared for the storm. Florida lost 127,400 jobs in September. Job losses were seen in most major industries, but were most severe in the accommodations and food services, administration and waste services, and construction industries. Power outages and fuel shortages made it difficult for people to return home and businesses to renor-malize. So, it is fair to say that September was a drag on Florida economic activity in the third quarter. However, even with the September job losses in Florida, the third quarter as a whole showed positive job growth over the second quarter, indicative of ongoing moderate Florida real gross domestic product growth. We expect economic activity to rebound for the remainder of 2017 and into 2018 supported by strong net in-migration, tourism and a recovering labor market. Florida may experience a spike in people migrating into the state in the next couple of quarters as a result of Hurricane Maria. Residents from Puerto Rico who were able to evacuate the island may opt to stay stateside due to the devastation in Puerto Rico. Also, Puerto Rico’s high unemployment rate, at 10.1 percent in August, will incentivize potential job seekers to look elsewhere. An inflow of migrants to Florida will boost consumer spending, support local businesses and increase demand for housing.

For a PDF version of this report click here: FL_Outlook_1117

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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