Tampa Bay's battered economy has ended its free fall and is slowly getting better, with wages expected to grow near the fastest pace in the state over the next three years.
Those were among the encouraging conclusions of a far-ranging economic forecast released Friday by the University of Central Florida's Institute for Economic Competitiveness.
The report predicts Florida's economy will begin to grow this quarter, ending more than two years of shrinking. But that growth will be tepid at best, the analysis said, as fallout from the housing bust puts the state through "an unleavened recovery."
"Florida's recovery simply doesn't have the yeast that has been an ingredient in previous recoveries," UCF economist Sean Snaith wrote.
"Population growth has been stagnated, albeit temporarily. The construction sector continues to profusely bleed jobs. … We still have the plague of the housing bust to deal with, and the bitter herbs of the labor market to remind us of the recession."
The jobs crisis, in particular, will mute recovery as unemployment is expected to remain above 12 percent statewide for the balance of the year and not fall below 10 percent until the second quarter of 2012.
Within the Tampa-St. Petersburg-Clearwater market, Snaith predicted:
• Personal income will grow an average of 5.4 percent annually between now and 2013.
• Average annual wages will grow 2.9 percent, one of the highest rates in the state.
• Employment rolls will grow an average 2 percent annually, tied for second highest in the state. Jobs in professional and business services will lead the way, growing 6.7 percent each year.
• The unemployment rate, now at 13.1 percent in the region, will gradually recede in tandem with the rest of the state and reach 8 percent by the end of 2013.
His statewide unemployment forecast: After topping off at an average of 12.6 percent this year, the jobless rate will drop to 11.5 percent next year, 9.7 percent in 2012 and 8.1 percent in 2013.
Snaith's predictions that the worst is over statewide echo those of several Florida-centered economists who contend the triple threats of high debt, high unemployment and a still-queasy housing market won't be enough to trigger a double-dip recession.
Among the reasons for optimism: Housing starts have finally started to rise again this year. Snaith, however, predicts Florida is at least three years away from returning to 2001 levels, rising gradually to 167,400 starts.
"2010 will be another difficult year for the housing market, though the worst may be over," Snaith said. "Aside from the cash market for foreclosures and the first-time homebuyer market, housing remains a languishing part of Florida's economy."
After contracting for two years in a row, the Gross State Product (GSP), a measure of goods and services produced in Florida, is expected to expand 2.1 percent this year, 2.5 percent in 2011, and then accelerate to 4.5 percent in 2012, according to the forecast.
Jeff Harrington can be reached at email@example.com or (727) 893-8242.