The number 13 could be lucky for Florida’s economy should the nation avoid slipping into a new recession.The new year – 2013 – has all the signs indicative of increasing momentum for Florida’s economy with housing starts growing, employment improving and the state’s population growth continuing to fuel the state’s economy, said University of Central Florida economist Sean Snaith.
In his 2012 fourth-quarter economic forecast, Snaith suggests that Florida is poised to take off in 2013 unless elected leaders walk the economy right off the fiscal cliff.
The fiscal cliff is the term coined to explain the automatic activation of the Budget Control Act of 2011, which mandates several measures that are not particularly attractive to either Democrats or Republicans. Unless elected leaders come to a compromise, several fiscal changes will kick in including: the end of last year’s temporary payroll tax cuts, the end of certain tax breaks for businesses, shifts in the alternative minimum tax, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law.
At the same time, deep spending cuts to more than 1,000 government programs – including defense and Medicare are also set to kick in.
“Delusions that increasing the tax rates on the highest tax bracket will solve our fiscal problems or that we can leave entitlement programs untouched because they do not impact the budget deficit or national debt are still prevalent and go largely unchallenged,” Snaith said. “That’s wrong. We need to go large to fix this problem, but instead we remain petty and marginal in the proposals made thus far.”
Should no compromise be reached, the economy could falter and slip back into a recession nationwide, which would impact Florida. Should compromise be reached, Snaith suggests 2013 could be the running start Florida needs to get back to solid ground.
“We’re not talking about rocketing back to pre-recession status,” Snaith said. “But it will be a lot better than the stalled recovery we’ve been experiencing for the past couple of years.”
Among the sectors expected to have the strongest average growth during 2013-2016: construction, professional and business services, trade, transportation and utilities, education and health services.
To read the complete Fourth Quarter Florida Forecast with regional statistics click here .
Snaith is the director of UCF’s Institute for Economic Competitiveness. He 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 several 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.