Florida could be heading toward $1 trillion economy, forecast says

By Marcia Heroux Pounds Sun Sentinel
Public Opinions International
8th  April 2017
Florida's economy is expected to accelerate at a faster pace than the nation's for the next four years, becoming a $1 trillion economy by 2018, said University of Central Florida economist Sean Snaith in his latest forecast.

The economy is projected to expand at an average annual rate of 2.9 percent through 2019, according to the second-quarter forecast.

A booming economy would bring new businesses, jobs, housing, more consumer spending and other economic benefits.

Snaith said Florida's growth course could potentially be weakened by the U.K. decision last week to leave the European Union, known as Brexit. The initial impact on financial markets was swift, and the British pound fell to record lows.

Snaith, who completed his forecast before the U.K. vote, said it will be a wait-and-see game to determine Brexit's effects on the U.S. economy.

Florida's tourism, for example, could be affected because "everything is 10 percent more expensive now" for U.K. visitors, he said.

"It's easy to cut out the holiday to Florida when you're worried about losing your job," Snaith said. "The really big picture is [whether] this is the start of the crumbling of the European Union. That would knock much of the world into recession."

South Florida, especially Miami, already is being hurt by global woes in Brazil. Snaith said Brazil's troubled economy is hurting Miami's hotel industry.

But domestic tourism remains strong, Snaith said.

According to Snaith's forecast, Florida is expected to break the $1 trillion mark in 2018 and climb to $1.074 trillion in 2019. That would make Florida's economy the 16th largest in the world, according to rankings by the World Bank.

That also would mean a rise from a state gross domestic product of $902 billion during the last quarter of 2015, according to the U.S. Bureau of Economic Analysis.

The economist attributed Florida's growth to continued strength in the housing market and its job growth outperforming the U.S. labor market.

The region's workers can expect wage growth of 3.6 percent this year over a year ago, and enjoy the second highest average annual salary, $58,500, of the state's metro areas, Snaith said. Average annual salary is higher in the Naples-Marco Island region.

He said the pace of Florida's labor market recovery is expected to continue to exceed the national job market recovery through 2019, with the labor force growing at an average of 2 percent from 2016 to 2019. Payroll job growth is expected to average 3.9 percent this year, then slow to 2.4 percent in 2017, 1.1 percent in 2018, and 0.8 percent in 2019.

In housing, Florida's median existing home price has risen to $213,000, compared with $122,200 during the housing crisis.

But the state faces a growing shortage of single-family housing.

"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."

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