Florida's economy is about to double dip. But we won't enjoy the second helping.
At a meeting Thursday morning of Florida's top economic development agency, economists warned that Florida's housing-related recession that began a year ago will grow in length and severity as the national recession spills over its borders.
How bad could it get? University of Florida economist David Denslow issued his outlook in a presentation before the board of Enterprise Florida in St. Petersburg: ENERGY
For the first time in history, the number of homes and other buildings hooking into electric meters has fallen statewide year to year. The drop was 7,000 as of August. For a state that relies on migrants, retired or otherwise, it's a discouraging twist of fate. "We've never seen anything like that before," said Denslow, whose department crunched the numbers this week. "We don't know what to make of it." TOURISM
A stronger dollar, combined with a widening global recession, will cut into tourism, one of the rosier segments of the state's economy. That's bad news for the beaches, Busch Gardens and Disney World. Restaurant and hotel employment could suffer.
"It's going to make it more difficult for Brazilians and Europeans to come to Orlando or the Tampa Bay area," Denslow said. CONSTRUCTION
The construction industry, which accounts for a huge majority of the 100,000 lost jobs in the state the past year, faces harder times. Denslow noted that home builders started just 3,232 homes in August. That's a smidgen of the peak monthly rate of 20,000 starts three years ago. As of August, Florida's unemployment rate was 6.5 percent.
Automobile sales will suffer from a deeper Florida recession. The credit crunch is partly to blame. Denslow said auto loan approval rates have plunged from 83 percent to 62 percent. This is happening despite the stimulus from falling gas prices. "You'll see a number of automobile dealerships closing," Denslow said. MANUFACTURING
The state's loss of manufacturing jobs will accelerate. While high-tech manufacturing may remain strong in fields like medical devices, factories that served the building industry are winding down. Think floor tile, roof truss and PVC pipe makers.
But all is not lost. Denslow predicted Florida's recovery would be "L-shaped," meaning a sharp decline followed by a year or two of little or no growth. But by late 2010 and early 2011, when the first wave of baby boomers turns 65, he predicts a strong comeback for the state. "Florida will start growing vigorously again and become a relatively affluent state," he said.