August 2018 FL Economic Outlook

Robert A. Dye, Ph.D.

,

Daniel Sanabria

A high rise building next to a beach

The Florida economy remains on good footing as we head into the latter portion of 2018.



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.

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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 the 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.

August 13, 2018
Robert A. Dye, Ph.D., Senior Vice President and Chief Economist at Comerica Bank

Robert A. Dye, Ph.D.

Senior Vice President and Chief Economist
Daniel Sanabria, Senior Economist at Comerica Bank

Daniel Sanabria

Senior Economist

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