2023 Economic Outlook
Central Florida's economic forecast for 2023
Regional business leaders talk about the outlook for the year ahead, plus demographics and statistics
Perspectives on the Year Ahead
Senior Vice President, Strategic Planning, Orlando Health, Orlando
- INFLATION: “Nationally in 2023, we expect the health care industry to grow faster than the overall economy, reflecting health care’s continued expanding share of the nation’s GDP. Interestingly, health care costs have not been growing as fast as other consumer staples such as food and gas. This is partially the result of health care prices being set in advance through federal and state programs and through contracting with private insurance payers. Health systems are under pressure through higher labor and supply costs. As a result of these cost pressures and other factors, expect to see additional health system consolidation across the state and nation.”
- HIRING OR FIRING? “While there is still a very competitive labor market in Orlando, we expect to be less reliant on temporary and traveling clinicians in 2023. Orlando Health is putting a significant amount of effort into retaining both clinical and non-clinical staff, bringing back team members who may have left in prior years and recruiting new ones. We do expect the labor market to remain constrained in 2023, since the growing population of Florida means increased demand for health services. Orlando Health will continue hiring in 2023 as we expand our footprint in the Orlando, Tampa/St. Petersburg and Puerto Rico areas.”
- PRESSURE POINTS: “We closely monitor the economic landscape, and locally just about all indicators remain green, including job growth, housing starts, population growth and visitor volume. While we have noted slight moderation in construction material escalation, we are seeing protracted lead times for many equipment components. We also continue to see excessive volatility in energy costs. Despite rising interest rates, we are still seeing historically low unemployment in Central Florida, which has increased labor market competition.”
- CAPITAL INVESTMENTS: “Among our recently announced investments are a 150-bed hospital in Lake Mary, a 300-bed hospital in Lakeland and a 300-bed hospital in the Wiregrass Ranch community north of Tampa.”
Chairman/CEO, Craig Technologies/Sidus Space, Cape Canaveral
- FORECAST: “The budgets when it comes to government, which is much of what traditional aerospace and defense is centered on, are already established. If you think back on 2008, if you were a government contractor and pretty diversified, you were able to ride out some of the recession and then also grow, and I feel like it’s the same thing here. It’s moving along like you would normally expect. The commercial side of space is also growing. I would say people are being a little more conservative because of the market and because of what’s going on right now, but there’s no question that the growth will continue when it comes to commercial space. We’ve got this nice blend with defense, with government and also commercial space. I think that mitigates risk a little bit for a lot of the companies.”
- HIRING OR FIRING? “It’s challenging in certain specialty areas. It’s hard to find an experienced electrical engineer — we’re struggling in that area, but in other areas, we don’t. What we’re trying to do is really have a blend of the experienced and the fresh out (of school) that bring innovative ideas. On the commercial space side, with Sidus Space, our plans are to launch 100 satellites by 2026. Obviously, in order to do that, we’re going to need to grow, so we anticipate continuing to hire and continuing to grow the business. On the other side, with Craig Technologies, it’s kind of the same thing. We bid on a number of contracts, but for the most part, you kind of steadily bring in people. We don’t expect those programs that we bid on, or are waiting on an award for, being cut.”
- SUPPLY CHAIN: “Your lead times are a lot longer. You have to plan ahead; you have to think about purchasing in multiples. If we’re going to launch a hundred satellites, we have to kind of decide do we need to buy one of these or three because we’re anticipating supply chain issues. With manufacturing, there’s always a little bit of a supply chain issue, but it has definitely impacted our process. We’ve really changed the way we focus on our suppliers. It has become a daily focus to make sure those lead times aren’t changing, or if they’re going to change that we’re mitigating the impact on those projects that are time-critical or mission-critical.”
Florida Head/Middle Market Banking, JPMorgan Chase, Orlando
- GROWTH: “The sentiment in Florida especially, and Central Florida as well, has been fairly consistently positive. There are obviously undertones that you hear from the national spotlight. However, the massive growth that we saw over the last two years in Florida is really playing out. It is a pipeline of what’s to come. Private equity/sponsor money coming into the state was pretty impactful over the last two years, and there’s a ton of M&A that happened. That has slightly slowed because of interest rates, so you’re seeing a little bit of slower beam of large fund money come into the state. However, because of the big impact that it has made in the last two years, I think that leads to frenetic growth going forward.”
- WORKFORCE: “We just made a $100-million initiative in Miami to really work through upskilling the tech resources in the city. I think there’s a massive amount of people that have come into the state and (the issue is) matching the skilled labor with what the job requisitions are that are out there.”
CEO, Orlando Regional Realtor Association, Orlando
- GROWTH: “Although we are bullish and optimistic on the Orlando market, nationally economists are predicting a downturn. One of the things we’re doing is making sure we prepare budgetarily to withstand any financial downturn. From a financial standpoint, we’re making sure that we’re doing a lot of conservative budgeting but anticipating the ability to continue to grow.”
- RISING INTEREST RATES: “Real estate reflects the economy. It reflects the national economy, and the first six months of 2023 will definitely be an echo of what happens in Washington with regards to policy and the availability of money, especially as it pertains to Florida. Rising insurance costs, plus the increase in interest rates, are definitely going to be a squeeze on housing. Now, fortunately for Florida, the popularity of moving to Florida has not waned, but the availability of money from lenders, the rising cost of insurance, those things will definitely have an effect on home sales.”
- INTERNATIONAL BUYERS: “We have a great deal of real estate investors because of our vacation market, because of our short-term rentals, because of Disney, because of Universal and that tourist pocket. Orlando gets its healthy share of investors from Brazil, investors from South America, investors from the U.K., investors from Canada, and so we have that third leg that many other cities don’t have — and because of those investment dollars coming from abroad, we tend to have a much more healthy outlook on the real estate market. We haven’t had any indicators as of yet that the international buyers will fall off.”
- CAPITAL INVESTMENTS: “Our new headquarters will be opening at the end of the summer or fall at the earliest. Over 40,000 square feet, and it is a monument to 100 years of real estate in Central Florida.”
President, Ustler Development, Orlando
- GROWTH: “There’s not a crane in the air in downtown Orlando right now. It hasn’t been that way since the Great Recession. Mayor Buddy Dyer said at a meeting a long time ago that the unofficial city bird is the crane because we always had so many cranes in the air, and that’s usually a pretty good measure of how your market’s going. Right now, there are no cranes in the air in downtown Orlando. That’s a very anecdotal way to think about the slowdown. I fully expect to break ground (on several projects in Creative Village) next year. I just think we’re just going to have to enjoy moderation a little bit more. The spigot’s been pretty wide open.”
- FACTORS: “There’s a macro economic environment that’s affecting everyone. In the real estate world, that tends to be interest rates and construction price increases and labor shortages and supply chain issues and unpredictability of the capital markets. There’s a lot going on in the real estate market in general, and there’s been a lot of movement at a rapid pace, so it doesn’t matter if you’re in Tampa, Orlando, Miami or Timbuktu, you’re talking about in the last six to nine months, your costs of borrowing money doubling and your construction pricing increasing over the last year or two at an unprecedented rate.”
- DEMAND: “We’re certainly in what I call a real estate recession. I’m not talking about a real estate depression, but I think 2023 is slower than 2022 or 2021. We’ve kind of hung our hat as an industry on multi-family and industrial — those have clearly been the two market segments where there’s been the most activity. There’s still fundamental underlying demand for a place to live. The pressure continues to be on the price of that housing, but there’s clearly a strong demand in Orlando.”
- HOT SPOTS: “Orlando in particular will continue to be favorably positioned compared to the rest of the state. We’re certainly capturing our fair share of the statewide population influx and continue population growth and continue economic growth. Everything that sort of happened got accelerated post-COVID. You hear about the great population migration — all that continues to be true, but I think at a slower rate. I still think multi-family and industrial are active, and I think there’s fundamentally more demand for it, but I think there’s less of it.”
Economic Development Opportunities in 2023 …
President/CEO, Economic Development Commission of Florida’s Space Coast
“We’ve seen continuing internationalization of our industrial base. Not that many years ago, it was a lot of defense — a lot of U.S. companies, obviously,” Weatherman says. Today, the region is home to Embraer, a Brazilian aircraft manufacturer; Leonardo DRA, an Italian company that makes electro-optical and infrared systems and land electronics; Thales Avionics, a French company that makes in-flight entertainment equipment and other systems; OneWeb Satellites, a French company; and Dassault Falcon Jet, a subsidiary of the French aerospace company Dassault Aviation that is building a facility in Melbourne. “The world is recognizing the opportunity the Space Coast has to offer — so we’ll be looking at that and continuing to build upon the supply chain tied to the aviation companies and working to continue the (robust) launch manifest.”
We’re working very closely with the Space Force to identify missions or compete for missions that can come here. One of the things the Department of Defense is very interested in, in addition to the stuff uniquely germane to Space Force, is the health and well-being and quality of life of their service members and their families. It’s not just defense industries and launch companies and space — it’s also what’s tied to our military.”
President/CEO, Team Volusia Economic Development Corp.
“Our key industries include aviation/ aerospace, logistics and manufacturing. Our proximity to Cape Canaveral and our strategic location on the northern point of the Space Triangle, along with being the home to seven institutions of higher learning, including Embry-Riddle Aeronautical University, are foundational to our unique viability with the aviation and aerospace sector. Geographic strengths also stand out for us in relation to the logistics industry. At the crossroads of the I-4 corridor and I-95, between JaxPort and Port Canaveral, with commercial rail lines moving through the area, all play into the reason we already have several mega-distribution centers.”
President/CEO, Orlando Economic Partnership
“In 2022, our strategic focus on driving investment in semiconductor manufacturing, research and development in Osceola County’s NeoCity helped a regional coalition of industry, government and academic partners win the Economic Development Administration’s Build Back Better Regional Challenge. That resulted in a generational investment of $50.8 million to develop our region’s semiconductor and microelectronics industry cluster, which will have compounding ripple effects throughout our economy and positions our region to lead the nation in semiconductor manufacturing. This year, we’re strategically focused on securing federal funding from the CHIPS and Science Act and the Infrastructure Investment and Jobs Act.
Our primary goal, however, remains growing our regional economy through economic development and recruitment. We’re doubling down on our business development efforts with an emphasis on West Coast, East Coast and international company recruitment.
We recently unveiled the first-of-its-scale Orlando Regional Digital Twin. This is a game-changing technology platform that allows us to showcase the breadth of the Orlando region’s assets and value without having to drive around the region for hours. We’re looking into how our region’s partners can use it to run scenarios like new transit routes, infrastructure development, utility grid expansions and more so that it becomes a cornerstone technology for our region.”
MAJOR DOWNTOWN DEVELOPMENTS
- Sports & Entertainment District: The Orlando Magic expects to break ground this year on its Sports + Entertainment District on 8.4 acres in downtown Orlando across from the Amway Center, where the NBA team plays, and one block from the Orlando City Soccer stadium. The $500-million project will include a hotel tower, office space, restaurants, shops and parking.
- Creative Village Phase 2: Ustler Development expects to break ground early this year on its next residential tower project in Creative Village, a 68-acre innovation district on the edge of downtown Orlando that’s home to the UCF/Valencia downtown campus and Electronic Arts’ headquarters. Ustler will start work on an office project there likely in the second quarter of the year, with a hotel project coming six months later.
- DeBary Main Street: DeBary plans to create a town center/main street from scratch on the south side of the city along U.S. 17-92 adjacent to the SunRail station. The project will include 458 apartment homes and 37,850 square feet of first floor retail space, including live/work units, cafes, walking trails, golf cart parking and an outdoor event space overlooking a pond. Groundbreaking is expected in the second quarter of 2023.
- Beach Street Transformation: Along Beach Street in downtown Daytona Beach, the new $31-million Daytona Beach Riverfront Esplanade — paid for with donations from Hyatt and Cici Brown — features a park along the river’s edge, running and walking trails, a dog play area, raised botanical gardens and other amenities where residents and visitors can relax. Recent and future growth along Beach Street includes the Brown & Brown headquarters building along with two new residential developments in the works.
- Dassault Falcon Jet plans to begin construction in the second quarter on a 175,000-sq.-ft. complex at Melbourne Orlando International Airport, where it will provide major maintenance and modification on all current Falcon models.
- Boca Raton-based Terran Orbital scrapped plans to build a $300-million satellite factory on the Space Coast and will instead expand its manufacturing operations in Irvine, Calif. Marc Bell, the company’s co-founder and CEO, told SpaceNews that the company has seen an uptick in demand for satellites since Russia invaded Ukraine and that the company could ramp up production quicker in Irvine.
- Mount Dora City Council annexed more than 36 acres of vacant land on the south side of S.R. 46, with plans to create a mixed-use development called Mt. Dora Hills.
- The National Oceanic and Atmospheric Administration has selected MyRadar, a weather app with more than 13 million monthly users created by Orlando-based Acme AtronOmatic, to develop and demonstrate technology using satellite information and artificial intelligence to provide forecasts of wildfire risks and issue alerts about impending wildfire hazards.
- The Truist Foundation and the Truist Charitable Fund donated $2 million to the Black Business Investment Fund, an Orlando-based community development financial institution that provides loans, education and training services to foster the creation and expansion of Black businesses.
- Winter Garden’s Anuvia Plant Nutrients has signed an agreement with Petronas Chemicals Group Berhad in Malaysia, Asia’s largest oil and gas company, to begin exporting its fertilizer to Asia. Anuvia will also begin a second production line at its Plant City facility that will double its production capacity to 800,000 tons by 2024.
- Orlando-based International Association of Amusement Parks and Attractions promoted Jakob Wahl to president and CEO. Wahl, previously the organization’s executive vice president and COO, replaces Hal McEvoy, who will retire in April.
- Osceola County is spending $2.1 million to establish a Manufacturing Career and Technical Education Academy at Liberty High School to provide students with industry certifications and training in skilled trades.
- Polhemus, a Vermont-based company that specializes in motion tracking technology and has many customers in the Orlando region’s modeling and simulation industry, has opened an office in Lake Mary.
- Alabama-headquartered Encompass Health will build a 50-bed inpatient rehabilitation hospital in the Villages. The Encompass Health Rehabilitation Hospital of Wildwood will serve patients recovering from debilitating illnesses and injuries.
- AdventHealth named David Weis president and CEO of AdventHealth Daytona Beach. Weis most recently was president and CEO of AdventHealth DeLand.