Wednesday, April 18, 2018
Business

Will the local business trends of 2012 carry over into the new year?

The Florida economy is better now than a year ago. Tampa Bay can say the same about its financial fortunes.

We aren't talking good jobs for everyone and money growing on trees. But the economy is off the mat and punching back.

Tampa Bay led the state's metro areas in job creation. Local car sales continued their hot streak. Locally grown financial services company Raymond James set revenue and earnings records.

Recovery will remain bumpy. Foreclosures are rising again. Wages remain stagnant. The fiscal cliff looms like a financial bogeyman — real or not it could wobble Florida's fragile financial legs.

As 2012 winds down, we take a look at some local trends that helped get us here and whether they will keep the momentum going in 2013.

BAY AREA TOURISM CAME BACK

Tampa Bay tourism came back in a big way in 2012, and it wasn't just the Republican National Convention.

Both Pinellas and Hillsborough saw strong bed tax revenue collections in the 2011-12 fiscal year that ended in September, just as the RNC wrapped up at the Tampa Bay Times Forum in downtown Tampa.

The tax is a 5 percent surcharge tacked onto the bill of every hotel room and condo. It's also the most solid metric of tourism's strength in the bay area because it shows how many more visitors sprung for a place to stay compared to previous years.

"The bed tax, that's where the rubber hits the road for us," said David Downing, deputy director of Visit St. Petersburg/Clearwater.

Pinellas set a new bed tax record for the year as tourism rebounded strongly despite the dismal economy. The county collected a record $28.7 million in tourist tax revenue during this past fiscal year. That's a 12 percent increase from 2011 and 9 percent more than the previous record, the $26.4 million that Pinellas collected in 2008. Every month from October to September was better than the year before. It also had its single best month ever, when it collected $4.5 million in March.

Hillsborough County collected $21 million in tourist development tax monies. That wasn't far off the 2006-'07 record of $21.8 million. But it was an 11 percent jump from the $19.1 million the county collected the previous fiscal year.

The RNC helped, of course, especially in Hillsborough County. The political convention attracted more than 50,000 delegates, visitors and journalists to the Tampa Bay area during August, which is usually slow for the tourism and lodging industry.

But Pinellas didn't set a bed tax record just because of the RNC. Tourism officials credited a wide range of initiatives: new, focused online marketing efforts targeted at people interested in vacationing here; increased marketing in Pinellas' top feeder markets like Europe, New York and Chicago; the rise of sports tourism, such as the Big East college baseball tournament held in Clearwater's Bright House Field; and the movie Dolphin Tale, which told the story of Clearwater Marine Aquarium's tailless dolphin, Winter, and introduced a wide audience to the bay area.

"Now we're getting the right people to view what we're offering online," Downing said. "We also drilled down in some of our feeder markets in an even bigger way than we did last year. Then you add some of the intangibles, like the great weather we've had, the bump from the RNC, the continued success of Dolphin Tale and the outreach we have going on all the time."

There are lots of moving parts headed into 2013, including how much the aftermath of Hurricane Sandy keeps Northeasterners from traveling to Florida.

"But what we've seen so far this year makes us very hopeful for what 2013 is going to look like," Downing said.

JOBS ARE COMING BACK, BUT …

Gauging the health of Florida's jobs market is never a simple exercise.

Florida's unemployment rate has steadily fallen from 9.9 percent in December 2011 to 8.1 percent as of November. Other more troubling trends, however, threaten to make a return to full employment a still-distant dream.

State economists attribute most of the drop in unemployment this year to people falling out of the labor pool. Some were retirees, but many are part-timers unable to find full-time work and discouraged job seekers who have only temporarily suspended their job search until conditions improve.

Meanwhile, wages have been stagnant and long-term joblessness persists. And some manufacturing and IT employers still insist they are unable to find workers with the education or training to meet their needs.

Economic growth was an anemic 2 percent this past year, and many economists are not expecting much improvement in 2013. Some are calling for quicker growth in the first half of the year and slower growth in the second half — possibly even another recession as lower federal spending and higher taxes take root.

Ball State economist Michael Hicks is among those fearing the worst: "A national recession remains highly likely," he recently predicted.

What does that climate mean for jobs?

The Federal Reserve doesn't see national unemployment falling below 6.5 percent before mid 2015. Florida's rate, the experts observe, will lag behind even that sobering outlook.

BIOTECH STALLS … OR AT LEAST CRAWLS

Everyone knew the bay area's push toward becoming a biotech player wasn't going to happen overnight.

Nonetheless, it has been a year of more fits than starts.

• A promising antidepressant drug developed at the University of South Florida was once envisioned as USF's version of Gatorade — a product of national renown that helped put the University of Florida on the map.

Clinical trails of the USF drug (known as "TC-5214") proved a bust, dashing hopes of heavy royalties coming through a commercial blockbuster. Two drug companies that had sought to develop TC-5214 — Targacept and AstraZeneca — both scrapped their plans and shed their CEOs, in part due to the failure of the clinical trials.

• IRX Therapeutics, a small cancer drug research firm based in New York, announced in October 2011 that it was relocating its headquarters to St. Petersburg. IRX had developed its early cancer immunotherapy technology at USF Tampa a dozen years ago and was lured back in part by state incentives.

But the homecoming, originally slated by the end of 2011, has yet to occur. (IRX officials in New York, including CEO John Hadden II, did not return calls for comment.)

Ernst & Young partner Mike Poland, a longtime advocate for increasing the area's life sciences presence, preaches patience.

"So often people look for short-term success, and with this initiative it's really difficult to judge short term," he said. "The energy is still there; the commitment is still there. You just have to take a very long-term view."

HOUSING FINDS ITS FOOTING

Grab the champagne! The party hats! Tampa Bay's home prices hit bottom!

It's an odd accomplishment to champion but still reason to celebrate. 2012 will mark the first year after a six-year slip-and-slide that home prices ended on higher ground than they began.

Median sales prices jumped about 10 percent, to $131,000, this year in Hillsborough, Pinellas, Pasco and parts of Hernando counties, Multiple Listing Service data show.

We're still $100,000 below bubble prices and short of a long-term norm. But surveys show buyers are confident that prices will keep climbing through 2013.

That's good news even if you're not selling.

Homes in the Tampa metro area rose in value by $7.9 billion this year after crashing $10 billion in 2011, Zillow data show.

Thank the mending economy, but also Tampa Bay's tight supply of homes for sale. Buyers are launching bidding wars for a small crop of listings, driving up prices.

That's the gift. The curse: Inventory has gotten so strained that it's turning away frustrated buyers and slowing sales.

Investors are grabbing up foreclosures, recession-slowed builders are just beginning to thaw, and underwater homeowners still don't want to sell for less than they owe.

With prices recovering, the wish for 2013 will be for growth of a different kind: inventory. And maybe we'll get it.

New homes, including monster subdivisions in Hillsborough and Pasco, are bubbling to life after years of delays. And if prices keep chugging upward, more sellers could hop back into the market, pumping up supply.

But prices could be kept in check if banks retain tough rules for loans, benching potential buyers. Beware the champagne hangover of foreclosures and short sales from years past.

Compiled by Jeff Harrington, Drew Harwell and Jamal Thalji.

 
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