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Tampa Bay ranks among poorest performing economies

No matter how you slice it, the Tampa Bay area is having a tougher time slogging through the Great Recession than most of the country.

Exhibit A comes courtesy of a Brookings Institution analysis being released today that compares economic indicators for the top 100 U.S. metro areas.

The Tampa-St. Petersburg-Clearwater region ranks toward the bottom in several key measures: 89th in drop in employment from its pre-recession peak; 89th in drop in economic output from its peak; 89th in drop in housing prices over one year; 93rd in rise in unemployment over the past year.

Brookings didn't rate metro areas overall from 1 to 100.

But Tampa Bay, along with seven other Florida metro areas, made its cluster of 19 weakest performing economies. On the flip side, Texas accounts for five spots among the 20 strongest-performing metros.

David Denslow of the University of Florida's Bureau of Economic and Business Research found the report disheartening, but not surprising.

"The reason for it is pretty clear," he said. "It's where you had the combination of the big jump in housing prices and a lot of construction. You had both."

The Brookings report comes on the heels of an FDIC quarterly analysis showing past-due bank loan levels in Florida are as high as last year. Roughly a fourth of Florida's community banks are considered in troubled financial condition, many of them susceptible to growing problems with commercial real estate loans.

Meanwhile, personal bankruptcies statewide are still running at a relatively high rate. Single-family housing permits have rebounded, up 12.5 percent compared with a year ago, but multifamily permits are down 35 percent for the fourth quarter and 62 percent for all of 2009.

Put together, the latest figures underscore two concerns: recovery from the Great Recession is still very tenuous, and high unemployment isn't the only problem holding us back.

"There are plenty of issues here. … It's not just jobs," said Scott Brown, chief economist with Raymond James Financial in St. Petersburg.

He noted, for instance, that cities are still grappling with high property insurance rates driving up the cost of living. And gas prices are headed to $3 again.

With that backdrop, Brown isn't surprised that Florida metros are lagging behind much of the country. "We thought all along that the state that has the biggest housing bubble would have the biggest pop," he said, "and that seems to be playing out as anticipated."

Researchers at the Brookings think tank started out with a simple premise: examine the country's top 100 metro areas to get a clearer sense of how the economy is faring.

Their dissection indicates this recession is unlike any downturn since at least 1981, which is as far back as the analysis went.

Typically, job growth resumes within two years after a recession has begun. This time, most metro areas are still waiting for employers to start hiring again.

"The country is recovering much more slowly from this recession than it did from others over the past three decades," said Howard Wial, a fellow with the Metropolitan Policy Program at Brookings and report co-author.

The job purge has been so deep and prolonged, in fact, that the nation as a whole gained almost no jobs during the last decade.

Yet, as the Brookings report points out, nationwide averages "mask huge differences in job growth rates among the 100 largest metropolitan areas" in the last 10 years. Consider:

• Seventeen metro areas, including Cape Coral, Lakeland and Orlando, posted double-digit job growth from late 1999 to late 2009.

• On the flip side, Detroit, Youngstown, Dayton and Cleveland ended 2009 with lower employment levels than they had seen in more than 20 years.

Like its fellow Florida housing boom towns, Tampa Bay is still up in its job count compared with a decade ago. But the Great Recession has wiped away 61/2 years of job gains here.

The report is pegged to December 2009, when the Tampa Bay area's unemployment rate was 12.4 percent. In January, the rate rose to 13.1 percent.

Florida's unemployment rate is now 11.9 percent, matching a 1975 high, and it's widely projected to peak above 12 percent.

Where does it go from here?

Put Denslow of UF in the camp of optimists.

He maintains that predictions of high unemployment in the bay area lasting until at least 2018 are overblown. "I think they're too pessimistic, and once people realize that we're not going to have 9 percent unemployment in 2014, there's going to be a boom for commercial real estate and that will help the residential.

"That's not to say there aren't problems. The improvement will be gradual," he added. "But I think we've kind of bottomed out."

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.

Tampa Bay ranks among poorest performing economies 03/17/10 [Last modified: Thursday, March 18, 2010 2:29pm]
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