SHARE:
Florida TaxWatch Economic Commentary
A sunny economic outlook for Florida in 2016
Improved job growth contributing significantly to the economy.
Consistent and Stable Job Growth on the Horizon
Since the economic recession and recovery process that has occurred over the past decade, Florida has seen strong but somewhat volatile job growth. While the gains in the job market have been mainly positive, some growth in the job market can be attributed to a return to pre-recession standards. Going into 2016, forecasts project that while job growth will mostly stay positive, the economy will become more consistent and stable.
A leading metric for overall job growth, total non-farm employment is expected to grow 2.2 percent in 2016, according to the University of Central Florida’s Florida & Metro Forecast.3 An alternative forecast published by Kiplinger has a slightly more optimistic view, predicting that Florida will be ranked 3rd in the nation in terms of states with the fastest job growth, forecasting the state’s job growth to be 2.9 percent in 2016 and unemployment to dip to 4.7 percent.4
As the table below shows, Florida’s job growth is led by a resurgence in construction, which took a major hit during the economic recession, but has gradually turned around as consumer confidence has increased, leading to more business expansion and population growth. With increased construction comes new businesses and homes, which allow for growth in many other sectors of the job market.
| Predicted Employment Growth by Sector 3 | |
| Job Sector | Growth Rate |
| Construction | 7.2% |
| Transportation, Warehousing & Utility | 3.8% |
| Prof. and Business Services | 3.6% |
| Edu & Health Services | 3.1% |
| Leisure & Hospitality | 2.2% |
| Wholesale Trade | 1.9% |
| Durable Goods | 1.5% |
| Manufacturing | 1.4% |
| Nondurable Goods | 1.1% |
| Financial Activates | 1.1% |
| Retail Trade | 0.5% |
| Information | -0.7% |
| Mining | -3.6% |
Florida’s Housing Market Continues Its Rise
Since the end of the recession, Florida’s housing market, one of the most widely affected sectors of the economy, has been in a recovery state. A report released by the Florida Realtors in July 2015 found that the housing market was growing at a faster pace in 2015 than expected, and should continue on this path in 2016.5 Aiding the growth of the housing market is a shrinking pool of foreclosures,6which is good news for homeowners in Florida for a couple of reasons. First, fewer foreclosures is a sign of positive economic health for the state; and second, with fewer foreclosures, property values increase due to the fact that there are fewer homes available for purchase.
Additionally, the number of housing starts (construction of new homes) is expected increase in 2016 to meet the growing demand for homes.7 According to the Florida & Metro Forecast, Florida can expect to see more than 125,000 new homes start construction this year, a more than 25 percent increase over last year’s figure.8
3 Snaith, Sean. Florida & Metro Forecast. September 2015. U of Central Florida.
4 Payne, David. “15 Best States to Find a Job in 2016.” http://www.kiplinger.com/. Accessed. 6 Jan. 2016.
5 Snaith, Sean. Florida & Metro Forecast. September 2015. U of Central Florida.
6 Ibid.
7 Ibid.
8 Ibid.
» NEXT PAGE: Indications of a Strong 2016 -- and the conclusion
