Think the recession was hard on Tampa Bay? Its recovery has been even worse.
Among 100 major metropolitan areas, Tampa Bay has posted the third-weakest economic recovery since the recession hit its low point here in early 2010, according to a Brookings Institution analysis released today. The only metros with a more tepid "comeback" in economic activity: Cape Coral-Fort Myers and Sacramento, Calif.
Since early 2010, the bay area's economy has grown by only 0.6 percent, a far cry from the 4.5 percent average growth among all metro areas since their own economies hit bottom.
"There are definitely other elements that feed on it, but the housing bust is the source of all the problems of your region," said Howard Wial, a Brookings fellow and co-author of the report. "So while some other places that have suffered a housing price bust have recovered more strongly, the Tampa area hasn't."
The analysis comes on the heels of other reports indicating the bay area has had a tougher time than most, including fellow Florida metros, in pulling out of the Great Recession. The latest regional scorecard by the Tampa Bay Partnership ranked the area's economic competitiveness fifth among six metros in the Southeast, ahead of only Jacksonville. Meanwhile, government data earlier this week showed the bay area's economy grew an anemic 0.6 percent last year, far shy of the average 2.5 percent growth of other cities.
"Tampa is a very pro-cyclical economy in that it does really good in good times and does really bad in bad times," said economist Chris Lafakis of Moody's Economy.com. "A lot depends on domestic in-migration, and that's not happening."
The bay area trails Orlando, Lafakis said, because it doesn't share the same international draw for its theme parks and tourist attractions. South Florida's boom and bust cycle has been even more pronounced than Tampa Bay's, Lafakis said. But South Florida has the advantage of international finance connections and strong international trade, particularly with Latin America, to help it rebound faster.
Scott Brown, chief economist with Raymond James & Associates in St. Petersburg, cites another drag locally: the lack of Fortune 500 companies.
"There is a reliance on small businesses here and that's been the noticeably weak part of this recovery," he said. "Corporate profits are at record highs, but small firms are still credit constrained and still not seeing a big increase in demand for the goods and services they produce."
Jim Parrish, assistant director at the Small Business Development Center at the University of South Florida, will attest to that. Some small businesses he deals with are making more money than ever, but they're doing it by being more efficient, not necessarily by increasing sales.
"There's very few people convinced we're going to see any significant recovery in the short term," he said.
Even though there's been an increase in people coming to the Small Business Development Center offices in Tampa to launch a small business, the number of SBA loans has remained flat. The SBA made 399 loans in the Tampa Bay area through June 30 compared to 411 the year before. Nationally, SBA lending is poised to hit a record year.
Parrish said banks are making loans, but stricter criteria is limiting the pool of borrowers.
"A 680 (credit) score was good prior to the recession; now, it's marginal," he said. "There's too many businesses that are just struggling now and they're not generating enough cash to let them borrow."
Low all around
Change in economic output was one of 15 indicators used by Brookings in its MetroMonitor report, which tracks the performance of 100 metros through the second quarter of this year.
Tampa Bay scored low enough in most measures to continue to rank among the bottom 20 metros overall. Though it specifies individual ratings in various categories, Brookings breaks down overall rankings of the 100 metro areas only in five, 20-city groupings.
Florida and California dominated the bottom 20, accounting for 15 of the hardest-hit cities (seven in Florida and eight in California). In addition to Tampa Bay and Cape Coral, other weak-performing Florida metros were Lakeland, Miami, North Port, Orlando and Palm Bay.
In contrast, Texas led the way with five of the 20 strongest-performing metros, followed by New York with four. No Florida cities made the top 20.
There was one surprising bright spot in wages, Wial noted. Unlike a majority of metros, Tampa Bay average wages are still up compared to the outset of the recession, though by less than 1 percent.
Tampa Bay's best mark came in its one-year change in its unemployment rate, where it ranked 21st by cutting unemployment almost a full percentage point. However with an 11.1 percent jobless rate as of the end of June, it remained in the bottom 15 in the jobless category.
The new report found the recovery continues to be uneven and unsure. For instance, unemployment rates remained very high, but manufacturing employment continued to get better.
House prices hit new lows in all 100 top metros this spring, even though the number of foreclosures fell in half of those areas.
If there was any commonality among troubled economies, it was that most of the metros were epicenters for the dramatic housing boom and bust over the last decade. One notable exception was Detroit, hurt more by its heavy dependence on the auto industry.
Nearly all the metro areas that ranked high in the Brookings report relied substantially on government, education or energy production. Hence, Washington, D.C., and several state capitals were among top performers, along with the smattering of Texas cities with oil and gas industries.
Jeff Harrington can be reached at (727) 893-8242 or firstname.lastname@example.org.