Spurred by rising job growth and home construction, Florida’s economy is expected to continue to grow at a faster pace than the national forecast for the next four years, according to the latest forecast from UCF economist Sean Snaith.
“The fundamental underpinnings of the housing market in Florida continue to strengthen. Job growth in Florida is forecasted to continue outperforming the U.S. labor market and more Baby Boomers continue to reach the end of their working lives,” wrote Snaith in the second-quarter Florida & Metro Forecast. “This bodes well for continued population growth via the in-migration of workers and retirees.” Snaith is the director for the Institute for Economic Competitiveness at the UCF College of Business Administration.
From 2016-2019, Florida’s economy, as measured by Real Gross State Product, is expected to expand at an average annual rate of 2.9 percent through 2019, outpacing the projected average for U.S. real Gross Domestic Product growth for the same period. Nominal Gross State Product is expected to break the $1 trillion mark in 2018, according to the Florida & Metro Forecast, and climb to $1.074 trillion in 2019. This level today would make Florida’s economy the 16th largest in the world, as ranked by the World Bank.
The pace of Florida’s labor market recovery is expected to continue to exceed the recovery in the national job market through 2019. Labor-force growth will average 2 percent from 2016 to 2019 thanks to consistently robust job creation. Payroll job growth in Florida continues to outperform national job growth with year-over-year growth expected to average 3.9 percent in 2016, 2.4 percent in 2017, 1.1 percent in 2018 and 0.8 percent in 2019.
This improved outlook should put more Floridians back in the hunt for employment while also attracting out-of-state job seekers, Snaith said. It should also serve to lift consumer sentiment and consumption spending.
Florida faces a growing single-family-housing shortage due to the shrinking inventory of existing homes and a pace of housing starts that trails growth rapidly pushing prices up in the single-family market. Housing starts serve as an economic indicator that reflects the number of privately owned new houses on which construction has been started in a given period.
“While this looks like another housing bubble, it’s really just an old-fashioned shortage in the single-family market,” Snaith said. “It is expected to correct itself as new housing starts ramp up over the next few years.”
Median existing home prices have reached $213,000 compared to $122,200 during the housing crisis. Yet while housing prices have increased, global property information company CoreLogic estimates 15 percent of Florida’s mortgage holders remain underwater, meaning they owe more in mortgage debt than the value of the home. Florida is second only to Nevada (17.5 percent) in percentage of mortgage holders with negative equity.
To view the complete 2016 Florida & Metro Forecast, visit https://business.ucf.edu/centers-institutes/institute-economic-competitiveness/.
Snaith is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate.
Snaith also is a member of multiple national forecasting panels, including The Wall Street Journal Economic Forecasting Survey, CNNMoney.com’s survey of leading economists, the Associated Press Economy Survey, the National Association of Business Economics Quarterly Outlook Survey Panel, the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, the Livingston Survey, Bloomberg U.S. Economic Indicator Survey, Reuters U.S. Economy Survey, and USA Today Economic Survey Panel.
The Institute for Economic Competitiveness strives to provide complete, accurate and timely national, state and regional forecasts and economic analyses. Through these analyses, the institute provides valuable resources to the public and private sectors for informed decision-making.