Last year was pivotal for Florida's economy as the pace of job creation picked up and the unemployment rate actually fell below the national average.
Will the momentum last?
It's a good bet, based on a reports and interviews with some leading bank, corporate and university economists who track the state.
Just as Florida suffers more than most of the country during a recession, it tends to outperform the country during an improving economy like today, said Jeff Korzenik, chief investment strategist for Fifth Third Bank.
"We've gone through a period the last couple years where, if there was going to be a surprise, the surprises were always on the downside," Korzenik said. "We're now entering a period where, in our opinion, surprises will be skewed to the upside."
This is prime forecasting season for economists, many of whom travel around Florida offering clients their insights. Here are some Florida-centered predictions:
RICHARD MOODY Chief economist, Regions Bank
• Following on the pickup of multifamily construction in 2013, building of single-family homes will take off this year nationally. "Florida may lag a year or so," Moody says, as it continues to wean itself off a foreclosure overhang. "In Florida, I don't think (construction) of single-family homes will take off until later this year or next year."
• Job growth across Florida will be more broad-based. Already, the state is adding a "decent" number of jobs in professional and business services, Moody said. Even government, the only industry in Florida that was still losing jobs in 2013, shows promise. "In most places, you've seen government and state payrolls flatten out," he said. "It's not that government is going on a hiring binge any time soon … but it's not acting as a drag anymore. It's more neutral."
JEFF KORZENIK Chief investment strategist, Fifth Third Bank
• Florida will become "far more visible" as a destination for U.S. companies and multinationals looking to expand operations, particularly back-office operations that were so popular in Florida during the last big economic expansion. Korzenik notes that Florida state government ranks sixth in fiscal health, and the other five states don't have the same geographic attraction as Florida to lure business relocations.
• Florida's unemployment rate will keep heading down. Sidelined workers who had stopped looking for a new job during the recession won't come back into the job market in droves. Rather, much of the decline in labor force participation will turn out to be permanent with aging baby boomers retiring.
SCOTT BROWN Chief economist and senior vice president, Raymond James Financial
• Higher home prices have lifted many homeowners back above water on their mortgages. It's unlikely that we'll see a lot of home equity extraction, which helped fuel of lot of consumer spending growth before the recession, "but individuals are likely to feel wealthier and spend a bit more," Brown says.
• Income inequality is likely to be a major topic this year. With unemployment still relatively high, there's little upward pressure on wages to change that. "A stronger middle class would be a big plus for Florida, but I'm not optimistic," Brown said. Rather, he sees a "bifurcated economy" ahead — one where spending is strong at the high end of retail and housing, but "lackluster to moderate" otherwise.
MEKAEL TESHOME Assistant vice president and economist, PNC Financial Services Group
• Just a couple of years ago, most economists thought Florida wouldn't get back to a lower unemployment rate signifying "full employment" until 2018. But given job growth trends, Teshome now sees the country reaching full employment by 2016 "and Florida a little sooner than that." Close to home, he sees Tampa Bay's unemployment rate dipping below 6 percent this year and falling even further in 2015.
• Florida is in a sweet spot with housing picking up, an improved national economy helping tourism here and more people moving south again. "Those three aspects are putting this state on this virtuous cycle, instead of the vicious cycle it was in before," Teshome said.
SEAN SNAITH Director, Institute for Economic Competitiveness, University of Central Florida
• Florida's recovery will continue to outpace the national rebound in 2014 in terms of both overall economic growth and job growth. Population growth will continue to spur home construction and Florida's overall economy.
• Home prices won't appreciate as much in Florida this year as they did in 2013. Investors are continuing their exit from Florida's housing market (cash transactions were 50.5 percent of single-family sales in January 2013 and fell to 42.7 percent by December). But the still-limited availability of mortgages to traditional home buyers could impede the transition "from (investment firms like) Blackstone to Mr. and Mrs. Black," Snaith said.
Jeff Harrington can be reached at [email protected] or (727) 893-8242.