In its first hundred days, the BP oil spill hasn’t just hurt tourism and the environment. It has delayed the entire Sunshine State’s economic recovery for at least a year, says University of Central Florida economist Sean Snaith.
“BP may have successfully capped the wellhead at the bottom of the Gulf of Mexico, but not before the oil spill put a cap on Florida’s economic recovery,” according to Snaith and his latest statewide forecast released this morning.
Snaith’s report gives weight to a trade study released last week by the U.S. Travel Association. That study estimates that Florida could lose $18.6 billion in travel spending over the next three years even though 90 percent of its beaches are untouched by the spill.
While Snaith believes the numbers may be inflated a bit, he agrees with the overall conclusion: the spill will hurt state revenues over time.
“The impact starts in tourism but will ripple out into other areas of the economy,” said Snaith, the director of UCF’s Institute for Economic Competitiveness.
In Pensacola alone, the spill could shrink employment by as much as 10 percent, or several thousand jobs. Many businesses not on the beach — such as the produce wholesaler who sells to restaurants or the mechanic who fixes refrigerated trucks — will be affected by the disaster, and they likely “won’t ever see a dime from BP,” Snaith added.
Snaith also predicts that Florida’s leisure and hospitality sectors won’t grow until 2012 — even after the beleaguered construction sector sees some gains.
His 30-year forecast provides a comprehensive look at Florida and 12 metropolitan regions. Those areas are Pensacola, Daytona Beach-Deltona, Gainesville, Ocala, Lakeland, Palm Bay-Melbourne, Naples, Miami, Jacksonville, Tallahassee, Tampa Bay and Orlando.
To see Snaith’s entire forecast, go to http://www.iec.ucf.edu.
Other highlights include:
— 2010 will be another difficult year for the housing market, and a post-first-time homebuyer tax credit “let down” may give the impression of a larger-than-expected dip. However, it’s the same phenomenon that occurred in the wake of the end of the “cash for clunkers” program.
— Unemployment will remain stubbornly high, and the state’s rate will not fall below 10 percent until the second quarter of 2012. Next year should make the beginning of a long and slow, but steady, decline in unemployment. It could be 2022 before unemployment falls below 5 percent.
— The sectors forecasted to have the strongest growth during 2010-2013 are Professional and Business Services; Trade, Transportation and Utilities; Manufacturing; and Education and Health Services.
— Florida’s housing construction sector bottomed out in 2009, reaching a level that was just 16 percent of the peak number of starts. Housing starts will climb even more slowly than was expected over the next several years. In 2013, housing starts will recover to 2001 levels, rising gradually to 158,600 starts a year.
— Real personal income growth will begin to accelerate in 2010 to 2.8 percent. From 2011-2013, personal income growth will average 3.5 percent and will peak at 3.7 percent in 2011.
“The spill couldn’t have happened at a worse time, when Florida’s economy is extra susceptible because of the housing bust and fiscal crises in state and local governments,” Snaith added.