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2009 Industry Outlook

First, the bad news: Florida is seeing its sharpest decline in gross state product in 16 years. Job losses are among the highest in the nation. The unemployment rate in Florida stood at 7% in October. Just a month earlier, it was 6.6%; a year earlier, 4.3%. There are 156,200 fewer Floridians with jobs now.

2009 industry outlook
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Mark Vitner, senior economist at Wachovia Corp. in Charlotte, N.C., says several indictors “show the conditions in the state are worse than in the last recession and are nearing declines seen in the 1990-91 downturn. The current economic environment may be the worst for the state in the modern era, even eclipsing the 1973-75 recession.”

Now, some bright spots: Exports were solid in the first half of the year, reflecting early year strength in Brazil, Colombia and other Latin American countries. Locally owned, mom and pop businesses are in a position of power to renegotiate leases as big shopping centers lose major tenants. Fast-food sales are up 8% to 10%, even as casual dining tanks, with Bennigans, Shells and other chains filing for bankruptcy.

Florida Economic Indicators
. 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3
Payroll Employment (change from previous year) +2.3% +1.5% -0.8% -1.1% -1.5%
Home Sales (single family) -29% -30% -26% -6.5% +5.3%
Exports (in billions) $17 $18 $16 $18 $19
Source: Washington Economics Group

Looking Ahead

2009 and beyond: Some sectors of the Florida economy will recover earlier than others. The prospects, according to “Florida & Metro Forecast 2008-2011” compiled by the Institute for Economic Competitiveness at the University of Central Florida:

Housing

 “Until the housing market can recover, we expect Florida’s economy to struggle. This process will not take years to unfold, but it will be several more quarters before this process has fully played itself out. We are likely at or closing in on the nadir of housing starts.”

 Housing starts will fully recover by 2011 but at more than 120,000 units below the peak reached in 2005.

 Housing prices will continue to fall into the middle of the year.

Jobs

 “Easing of the credit crisis will allow job growth to resume in mid-2009.”

 The construction industry won’t begin adding jobs until 2010.

 Unemployment will be in the 7% range through the first half of 2009. By 2011, the jobless rate is expected to be 6.3%.

Growth sectors (through 2011)

 Professional and business services (4%); education and health services (2.9%); trade, transportation and utilities (1.8%); leisure and hospitality (1.4%)

Gross State Product

 GSP is expected to rise 1.7% this year and 2.4% next year.