2008 was a lackluster year and Florida's CEOs project 2009 will be similar or worse.
Florida lines up with national indicators
Perceptions of national economic trends in this year’s Florida CEO Trends survey are consistent with state and national economic indicators. The graph above charts the year-to-year percentage change in gross domestic (national) and state product from 1998 through 2007. Nationally, growth began to slow in 2005, but the economy continued to expand, albeit at a lower level. In contrast, Florida’s economic growth accelerated through 2005 but then slowed sharply in 2006, with 2007 marked by no growth at all.
Employment numbers (see chart at left) show sharp reductions in Florida for 2008. Total non-farm employment growth slowed in the wake of the 2000-2001 recession and the 9-11 terrorist attacks, but then picked up again in 2003 and continued in high amounts through 2005, when more than 300,000 jobs were added to the state’s economy. Employment growth was not as great in 2006 but was still very strong, with a net gain of more than 200,000 jobs. In 2007, employment growth slowed dramatically to 38,600, and in 2008 Florida experienced an actual decline in total employment, losing almost 176,000 jobs. Predictably, the state’s unemployment rate rose sharply from 4% in 2007 to 6.6% in 2008, which is comparable to the national unemployment rate of 6.5%.
|» Change in Gross Product
(State vs. Domestic)
|Source: Bureau of Economic Analysis||Source: Bureau of Labor Statistics
(preliminary estimate for September 2008)
Trends in economic growth and employment have brought Florida more into line with national economic conditions.
These trends in employment and economic growth have brought Florida more into line with national economic conditions than the state has been for almost a decade. From 2001 through 2005, annual nationwide growth in real gross domestic product was sluggish, ranging from a low of 1% to a high of 3.9%. Throughout this period, Florida’s growth rate exceeded the rate of growth nationally by at least one percentage point and often by two points or more. However, in 2006 and 2007, Florida’s economy began to deteriorate markedly. Confronted with a combination of declining home sales and property values, rising gas prices and weakening tourism, Florida’s explosive economic expansion could not continue without pause. CEO expectations and economic indicators both suggest that the slump will continue in 2009.