Friday, December 15, 2017
Business

Economist brings mixed outlook to Pasco business leaders

SAN ANTONIO — Pasco business leaders got good news and bad news Friday about this year's economic outlook. The good news: It won't get much worse. The bad news: It won't get much better.

"In the meantime, here's a puppy," said Raymond James Financial economist Scott J. Brown, showing off a photo of Spartacus, his Parson Russell terrier, at the end of his PowerPoint presentation.

Brown was the guest speaker at the annual Business Development Week luncheon at the Tampa Bay Golf & Country Club sponsored by the Pasco Economic Development Council.

The public-private partner- ship puts on the event each year to cap a week of seminars and networking events for area businesses.

This year's speaker also was a representative of the firm that last year announced plans to build two office towers, each 100,000 square feet, at State Road 56 and Mansfield Boulevard. According to documents provided by the county, Raymond James expects to bring 100 jobs to the site by 2014, and would have 750 jobs by 2024.

Brown, who told the Times he was not allowed to comment on when the company might hire workers and help grease Pasco's economy, gave attendees a primer on the Great Recession and how it differed from other downturns.

Because it originated from a financial crisis, he said, it's deeper and the recovery will take longer than downturns caused by the normal business cycle.

"This is not your father's recession," he said.

Actually, he said, it could have easily been a repeat of the Great Depression if the government hadn't lowered taxes and interest rates and yes, bailed out the banks.

"I know the public hates that bank rescue," he said. "But that was absolutely necessary. Without that the recession would have been much more severe."

As for the federal stimulus, it kept the economy from getting much weaker, but it did create short-term deficits. However, deficits don't hurt over the short-term, he said. But they will have an effect over the long-term.

Because of those concerns, he said, "expect a much tighter fiscal policy in 2013."

That's when the Bush tax cuts and payroll tax cuts — if they are extended past the two months approved by Congress — are expected to expire. Spending cuts also will kick in.

"In total, that could subtract up to 4 percent from GDP growth," he said.

Expect unemployment to decrease but only gradually, with hiring from smaller and mid-size firms. Technology has allowed larger companies to avoid adding workers and horde cash.

"Job growth is not terrible, not great," he said, adding that he is the only economist at Raymond James, which years ago would have about 10 on staff. Now, because of the Internet, data is readily available so fewer people are needed.

Headwinds are housing, which has bounced along the bottom, and state and local governments shrinking their workforces, along with volatile energy prices.

"For the middle class, that's a big deal," he said. "It's one of the biggest wild cards."

As for Florida and Pasco, companies are hiring, but not enough to ramp up the economy.

"We're treading water," he said. "We're still a long, long way from a full recovery."

Lisa Buie can be reached at [email protected] or (813) 909-4604.

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