May 2019 Florida Economic Outlook

May 13, 2019 by Robert A. Dye, Ph.D., Daniel Sanabria

Central Florida Pushes the State Economy

Florida economic data continues to show a shift in momentum from Southern Florida to Central Florida in early 2019. Driving this shift is the change in locational preference for both new Floridians and new businesses. The Miami-Fort Lauderdale-West Palm Beach metropolitan area remained a top 10 most populous region in the U.S. in 2018. However, the strongest population growth in the state from 2017 to 2018 was in the Central Florida region. The Orlando-Kissimmee-Sanford metropolitan area added 60,045 people in 2018, making it the fifth fastest growing metropolitan area in the U.S. last year. Tampa-St. Petersburg-Clearwater added 51,438 people, enough to be in ninth place for major metropolitan areas in 2018. The relative affordability of Central Florida is helping to boost the area’s commercial and residential real estate markets. According to Cushman and Wakefield, the office space vacancy rate in Miami ticked up from 12.1 percent in 2018Q1 to 13.3 percent in 2019Q1. However, Tampa saw only a minor increase in office vacancy rates from 11.3 percent to 11.5 percent and Orlando declined from 9.5 percent to 9.1 percent in the same time frame. The difference in home price appreciation could also be seen across the three areas. Tampa led the way in home price appreciation last year, up 9.4 percent in 2018. Orlando saw home prices tick up 9 percent, while Miami grew a decent 6.7 percent in 2018. We expect Central Florida to continue to see positive momentum in 2019. Yet, rising home prices and rent costs will begin to eat into affordability this year. The Florida economy as a whole is looking good so far this year anchored by solid job growth and rising incomes. The state is also well positioned to benefit from an overall moderately growing U.S. economy in 2019.

For a PDF version of this report, click here: May 2019 Florida 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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February 2019 Florida Economic Outlook

February 11, 2019 by Robert A. Dye, Ph.D., Daniel Sanabria

The Florida Economy’s Virtuous Cycle Continues

The Florida economy maintained positive economic momentum heading into early 2019. Florida added 231,200 jobs in 2018, up from the 163,900 net new jobs in 2017. In 2019 we expect to see another 230,000 net new jobs. The influx of people moving to the state following Hurricane Maria was a boost to Florida’s labor market in 2018. It increased both the total number of job-seekers and demand for goods and services last year. In Florida, people are attracting jobs, which are attracting more people in a virtuous cycle. We look for net migration to remain positive as workers and retirees continue to flock to the state this year, driving population growth. Florida’s strong population growth also spurred demand for housing in 2018. Single-family existing home sales were up 2.2 percent for the year, according to Florida Realtors. The inventory of existing single-family homes for sale remained tight, supporting an 8.6 percent gain in Florida existing home prices for the year ending in 2018Q3. We expect Florida home price growth to moderate in 2019 as builders supply more inventory this year. The state’s tourism industry has also seen strong growth. Total domestic visitors to Florida was up 7.7 percent year to date through 2018Q3, according to Visit Florida. PortMiami set a record with 5.4 million cruise passengers travelling through its port in 2018. Lower consumer confidence is a downside risk for Florida tourism in 2019. State total trade, the sum of total exports and imports, also improved last year, reaching $126 billion by November 2018. A risk to state trade this year is uncertainty surrounding U.S./ China trade negotiations. We look for ongoing strong population growth to keep the Florida economy on track in 2019 despite U.S. and global headwinds.

For a PDF version of this report, click here: February 2019 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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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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