A Florida TaxWatch Economic Report
New home construction in Florida indicates growing economy
Housing starts lead the state's economy.
The Forecast for Single Family Housing Starts
Using the March 2014 Florida & Metro Forecast for 2014-17published by the Institute for Economic Competitiveness at the University of Central Florida, the future for housing starts is expected to continue its positive trajectory. (chart, below)
This forecast shows that, compared to actual 2013 levels, housing starts for single-family homes are expected to double by 2016, with substantial increases during 2014 and 2015. This would create a substantial amount of economic activity in terms of construction jobs, furniture purchases, and many indirect and induced jobs. Multi-family housing is also expected to more than double, from 2013 actual numbers to 2017.
Florida’s home construction industry continues its strong recovery from the Great Recession. Recent increases in home construction indicate future improvement in Florida’s economy given the role of that statistic as a leading indicator of the direction of future growth.
This trend of a recovery in residential construction, along with an increase in commercial construction will help improve job creation and increase tax receipts for the state of Florida. As shown in a previous Florida TaxWatch report2, increases in Private Domestic Investment lead economies out of recessions, and drops in that same statistic lead economies into recession.
Knowing the importance of spending on new homes and new commercial buildings in private domestic investment, a healthy construction industry is a large component of a healthy recovery from recession. The construction industry provides jobs for many Floridians, as well as contributing to the growth of other sectors such as housing services, home improvement stores, furniture retailers, realtors, and title companies.
Given the forecasts of even healthier future growth in home construction in both single-family and multi-family construction, along with positive indicators such as record Florida tourism, lower unemployment rates, and increasing consumer confidence, Florida is well-positioned to increase its growth rate and create even more jobs for Floridians.
2 Florida TaxWatch, When Will Economic Growth Accelerate?, March 2012.
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