Phil Lewis: Little sunshine in economic forecast

Phil Lewis
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A forecast of Florida’s economic future landed on the editor’s desk this past week with a sobering thud.

The prognosticator was the Institute for Economic Competitiveness at the University of Central Florida. The institute is part of the Orlando-based university’s College of Business Administration.

The 90-page, bound report gave a 2010-2013 forecast for the state as a whole and then broke it down by urban areas, including Naples-Marco Island.

It carried a Halloween theme, perhaps because of its late October publication date and its rather scary assessment of the past two years.

The section on real estate and new home construction was headlined “Florida’s Haunted Housing Market.” The subhead read, “Sales still on the rise, but prices still have not come back from the dead.”

The recession and credit crunch has given the Sunshine State a Rust Belt complexion, the report noted.

“Without the constant stream of new Floridians into the market, the demand for housing has suffered greatly,” it added. This was followed by a few pages showing how the state’s once rapid flow of new residents dropped to a trickle, then disappeared entirely.

The prediction is for a slow, slow, slow recovery, but a recovery nonetheless.

“Those builders and developers that have survived the construction apocalypse will proceed with caution in pursuing new projects, due to their own wariness, and in large part due to the limited access to financing,” the report said. “The credit freeze is stubbornly slow to thaw, particularly in Florida, where banks’ balance sheets are still under severe stress from a mounting commercial real-estate crisis.”

The Daily News has published a few recent front-page stories that back those statements up.

Banks certainly have been having their problems.

Here are a few more highlights — if you want to use the term “high” — from the four-year forecast.

n After three straight years of job losses, Florida will see “meager” employment growth in the second quarter of 2010.

n Payroll job growth is expected to move out of the red and into the black in the fourth quarter of 2010. Then, the growth will be 1.7 percent in 2011, 2.9 percent in 2012 and 3.2 percent in 2013.

n “It will be 2014 before (Florida) payrolls recover to their pre-recession levels.”

n The state’s unemployment rate will continue to climb into the new year, peaking in 2010 at 11.2 percent.

n Statewide, the population will decline again in 2009 and stay flat in 2010. Finally, in-migration will turn positive and population growth will slowly climb to 1.5 percent by 2013.

n Housing starts will climb over the next few years, but it won’t be until 2013 that the state get backs to 2001 levels.

n During the 2010-2013 forecast period, retail sales will steadily accelerate at an average annual rate of 5.1 percent.

The relative gloomy list ends with this bright note:

“Consumer spending returns (during the forecast period), fueled by pent-up demand.”

Phil Lewis is editor of the Daily News. His e-mail address is plewis@naplesnews.com

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