Northwest Florida's economic forecast for 2024

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Rebuilding Tyndall

In the fall of 2018, Tyndall Air Force Base near Panama City was devastated by a direct hit from Hurricane Michael. The Category 5 storm severely damaged 484 buildings on the base, a major pilot training facility.

The Air Force’s decision to completely rebuild Tyndall was a critical turning point in Bay County’s economic future. “Tyndall Air Force Base is a major driver of the economy in Bay County and the entire Northwest Florida region,” says Becca Hardin, president of Bay Economic Development Alliance. “We would have experienced an economic disaster in Bay County if a decision was made at the federal level to not rebuild the base after Hurricane Michael.”

The multiyear rebuild is having an enormous long-term economic impact on Panama City and Northwest Florida. “Tyndall had a staggering $4.5-billion economic impact on the region in 2023,” says Lt. Col. Andrew R. Fingall, Tyndall base comptroller.

Fingall’s analysis also shows that nearly 28,000 jobs in the Bay County region were supported directly or indirectly by construction-related expenditures.

“This past year we’ve been ramping up on the number of short-term laborers coming in, and ultimately we’ll have some 4,000 contractors working on base, many of whom will stay here with their families for the next two-to-three years,” says Col. George Watkins, the base commander.

“The Panama City community could not be more pleased with the state of the Tyndall rebuild,” says Tom Neubauer, chair of the civilian Bay Defense Alliance. “The construction projects and continued growth of the active missions in the midst of the rebuild have been a tremendous boost to the recovery of the surrounding communities.”

Another welcomed sign of progress, says Neubauer, was the arrival in November of the first squadron of F-35 fighter jets to be based at Tyndall. “I think the thing this community missed the most is jet noise, and all that’s returning now.”

Hardin says when all three F-35 squadrons are moved to Tyndall there will be more than 70 aircraft and an increase of some 2,000 military personnel living and working in the Bay County region.

“I would never want to see another community go through the damage and stress of a Category 5 hurricane, but this experience has further strengthened the 78-year partnership between our community and the military,” says Neubauer.

What’s in Store for 2024

• HEALTH CARE

Mark O’Bryant
President & CEO, Tallahassee Memorial Hospital, Tallahassee

“Health care is struggling today but finding its way. Post COVID has actually been a harder transition than even during COVID. Costs have gone up on the labor side. The Florida Hospital Association did a survey recently that showed costs to hospitals post COVID have gone up 35-40%. That’s almost half of your cost. Drugs have gone up over 40% and supplies have gone up over 30%. Those three things comprise about 80% of the cost of delivering health care.

On the other side of the equation when looking at revenues, you have to look at all the sources: Medicare, Medicaid, insurance and self-pay. Those payment structures are up only 6-7%, collectively. From a business aspect, when your costs go up 30% and your revenue lines go up only 7%, you have gaps. We’re all trying to figure out how to manage within those gaps in revenues.”

• BANKING

Kathy Kraninger
CEO, Florida Bankers Association, Tallahassee

“We certainly have some economic challenges ahead at the national level. But at the state level, things are still looking very robust and strong for Florida banks. I can also say that the FBA has a number of new member banks, and that we are the number one state in the country for de novo (new) bank creation.

I would say regulatory risk is one of the major concerns that is foremost for bankers. And I think that’s because a lot of banking executives don’t come from that background, but they see the impact, obviously, it could have on their banks. So, thinking about risk management and regulatory and public policy risks, that is where the FBA comes into play. Our job is to help banks understand the particular dynamics that come into play when they’re interacting with regulators and legislators. We really have a key role in navigating that going forward.”

Ship Shape

Eastern Shipbuilding Group has completed a $6-million infrastructure improvement project at its satellite Port St. Joe facility in Gulf County. The company, headquartered in Panama City, also has embarked on a $50-million, 15,000-ton, dry-dock project to provide full vessel repair and maintenance services.

• MANUFACTURING

Chris Hart
CEO, Central Moloney, Panama City

“The forecast in 2024 and beyond for our industry is incredibly strong. In fact, Central Moloney has our entire 2024 (manufacturing schedule) booked already — and the driving force behind that is the continued need to electrify the United States.

What’s really going to drive the change for us is the continuing need for electricity that places our products at the forefront. And it doesn’t hurt that the United States electrical grid needs to be updated. This has placed a huge demand on what we do and how we do it. The biggest problem we have for sales right now is that people keep calling and placing orders for our equipment. And we are doing our best to keep up with this demand.

What we need to do to be innovative and creative is figure out a way to maximize the labor force we have. That’s the reason why we ventured into Northwest Florida, which has an incredibly rich labor pool. We have one plant in Bay County up and running and the second announced, and we have broken ground on that facility in Okaloosa County.”

• DEVELOPMENT

Robert Volpe
Attorney and land-use, zoning and growth management expert, Holtzman Vogel, Tallahassee

“We’re seeing a lot of development in rural markets, specifically the areas on the edge of urban cores that include projects in Walton, Wakulla and Jefferson counties in the Panhandle. Those are areas where it’s easier to develop larger single-family and multifamily projects as well. Homebuilders and developers are looking for entitled properties that have been properly zoned and that they can move through the development process as quickly and easily as possible. And in those more rural counties, developing property seems to be easier and more streamlined.”

Business Briefs

BAY COUNTY

• Panama City’s rapidly growing Northwest Florida Beaches International Airport has added another aerospace tenant. Canada-based Premier Aviation has begun work on a $32.5-million aviation maintenance, repair and overhaul facility that’s expected to create 250 jobs over the next four years. “This is a company that does detailed dives into the airplane, takes it apart, and puts it back together,” says Parker McClellan, the airport’s executive director.

CALHOUN COUNTY

• Construction is underway on a $38-million hospital in Blountstown. Delayed more than two years because of projected cost overruns, the 49,000-sq.-ft. Calhoun Liberty Hospital will have 11 beds along with radiology services and a trauma center, says hospital CEO Christinia Jepsen.

DIXIE COUNTY

• The town of Cross City is adding nearly 60 miles of high-speed fiber optic cable services to 2,612 unserved and underserved locations within Dixie County. The $2-million project, funded by a state grant, will provide download and upload speeds of 1 gigabyte per second.

ESCAMBIA COUNTY

• Pensacola International Airport set another record with its 2023 passenger counts. Airport Director Matt Coughlin says the fiscal year total of 2.65 million passengers was a nearly 9% increase over the previous year. The airport also was selected as a 2023 “Top 10 Small Airport in the U.S.” by USA Today’s Readers’ Choice Awards.

FRANKLIN COUNTY

• The Franklin County- Apalachicola Regional Airport is undergoing a $2.31-million rehabilitation to improve the security and capacity of its fuel storage and delivery systems. Duke Energy, the counties and communities that compose the Northwest Rural Area of Opportunity, and Triumph Gulf Coast helped county officials secure the grant money from the state. The airport serves Franklin, Gulf and Wakulla counties.

GADSDEN COUNTY

• Florida Power & Light’s Wild Azalea Solar Energy Center was completed in 2023 and is now providing enough solar energy to power 15,000 homes. The 500-plus acre site is near the town of Quincy.

HOLMES COUNTY

• Construction is nearing completion on the Busy Bee Travel Plaza along I-10 in Bonifay. The travel plaza is the largest in the state and will offer Tesla charging stations, fuel stations for trucks and automobiles, and a wide variety of merchandise and food products. The facility is expected to create some 100 jobs.

JACKSON COUNTY

• Proud Source Water, one of Jackson County’s newest industries, reached a milestone in late 2023 hitting a production peak of 1.8 million bottles per week of locally sourced spring water. Situated near one of the county’s natural springs, the Idaho-based company employs nearly 30 workers with average annual wages of nearly $50,000.

LEON COUNTY

• More than 4,800 acres in the Red Hills region of northern Leon County have been preserved via an $8.25-million state grant from Florida Forever, the state’s voter-approved land conservation program. The rural property, acquired from the Gem Land Co., will be managed by Tall Timbers, a non-profit research station and land conservancy based in Tallahassee.

WALTON COUNTY

• Florida Power & Light’s Chautauqua Solar Energy Center, which went online in 2023, is now producing more than 74 megawatts of solar energy, enough to power some 15,000 households. The center, the first FPL solar site in Walton County, is located on 867 acres and contains some 200,000 photovoltaic solar panels.

LIBERTY COUNTY

• More than 47 miles of high-speed ethernet optical network lines are being installed in Liberty County to connect 433 unserved or underserved homes and businesses. The $836,705 project is funded by state grants.

MADISON COUNTY

• With the help of state and federal FEMA funds, Madison County’s timber industry is slowly recovering from the massive damage caused by Hurricane Idalia. Taylor, Lafayette and Dixie counties also suffered significant damage to their timber industries totaling more than $64 million, according to the Florida Department of Agriculture and Consumer Services.

OKALOOSA COUNTY

• Central Moloney, a manufacturer of electrical transformers, is building a $50-million manufacturing facility specializing in pad-mounted electrical transformers. The 302,000-sq.-ft. facility is the company’s second plant in Northwest Florida and will be developed on a 48-acre parcel currently owned by Okaloosa County. The Arkansas-based company opened its first Northwest Florida plant in Bay County in 2022. The Okaloosa plant is expected to create 350 higher-wage jobs over the next few years.

WAKULLA COUNTY

• Construction is underway on Tallahassee Memorial HealthCare’s urgent care center in Crawfordville. The 12,000-sq.- ft. facility is on track to open by this summer. The facility will offer diagnostic services, laboratory testing and X-rays along with primary care and internal medicine specialists.

WASHINGTON COUNTY

• Washington County’s housing market was up nearly 20% in 2023, and local officials say the housing boom is accelerating. County Administrator Jeff Massey says there are some 80 homes currently under construction, and developers are obtaining permits to start construction on another 200 homes in 2024.

TAYLOR COUNTY

• The town of Perry is reaching out to the broad international market in an effort to save 525 jobs lost as a result of Georgia-Pacific’s recent decision to close its Foley Cellulose mill. Perry officials have hired Bob Cate, a former Foley plant manager, to spearhead the effort to find a buyer and save the paper mill, the largest employer in Taylor County.

• TECHNOLOGY

Matt Zimmermann
Founder & CEO, Beast Code, Fort Walton Beach

“We’re on a big kick now for partnerships and we’ve recently partnered with a digital engineering company called Amentum that has 44,000 employees and around $9 billion in annual revenue. They are going to start licensing our software and using it in their projects, so we have growth partners like them and are looking for other partners that have technology complementary to ours which can make our technology even better.

We’re working with the Air Force, and we just got a contract with the U.S. Space Force. We’re also talking with the Army and private industry. Our goal right now is worldwide sales, so we’ve got to build our commercial software products. We’re at the point where we’re licensing it, and we want to be able to license it across the world and down the road look back and say we did a really cool thing.”

Tags: Economic Outlook, Feature