A report from the Office of Economic and Demographic Research within the Florida Legislature shows general optimism about multiple facets of the state economy, but a few issues still remain.
“Florida growth rates are generally returning to more typical levels and continue to show progress,” the report states. “However, the drags are more persistent than past events, and it will take another year to climb completely out of the hole left by the recession.”
Florida saw real GDP growth of 2.7 percent in 2014, compared to a national average of 2.2 percent. Data from the Bureau of Economic Analysis showed that only West Virginia outperformed the state in the year. Strength in real estate and retail were the largest contributor to economic growth.
While job growth continues to outpace the state, and unemployment hovers near the national average, the report did raise concerns about the labor force participation rate. Florida’s labor force participation rate was 59.3 percent in May, down from a pre-recession peak of 64 percent. It also noted that only 17 counties had a higher percentage of employed workers from the peak in 2007, and noted that even though total employment has passed the 2007 numbers, population growth has outpaced job growth in that span.
“It would take the creation of an additional 580,000 jobs for the same percentage of the total population to be working as was the case during the peak,” the report says, but adds that unemployment was an extraordinarily low 3.7 percent at that time.
The report also showed concern about wage rates in the state. While average wages in the state are generally below the national average, the report estimates that based on 2014 data, average annual wages fell to their lowest point since 2001, at 87.2 percent of the national average. National wages raised faster than state wages, explaining the increasing gap.
Population growth is also expected to continue, though at a slower rate than previously. The report estimates that Florida’s population will grow by an average of 1.5 percent per year through 2020, and 0.75 percent per year through 2030, the period through 2020 translating into an average of 833 new residents per day. Population growth had occurred at a rate of 3.0 percent from 1970-1995. The vast majority of population growth is expected to be from the elderly.
“Florida’s older population (age 60 and older) will account for most of Florida’s population growth, representing 57.8 percent of gains,” the report states.
Real estate appears to be making a solid recovery, as existing home sales in 2014 surpassed their 2005 number, and reports project 2015 to be even better. While peak prices are down by nearly a quarter, median sales prices have continued to trend upward since 2011, with prices now similar to those in 2008. The state has also seen its ranking drop in total mortgage delinquencies.
“Florida’s underwater homes declined from a high of 50 percent of all residential mortgages to less than 13 percent in the most recent data,” said the report.
Where the state once led the nation in foreclosures and non-current mortgages, Florida now ranks ninth in the nation and as the first wave of foreclosures move farther past the seven-year mark, the tradition point at which foreclosures fall off credit reports, officials are optimistic that those people will be more able to re-enter the housing market and homebuyers.