Florida Making Slow Gains in Depressed Economy

by admin


Even amid the economic crisis, and the even more unsettling environmental crisis in the Gulf due to the BP oil spill, Florida’s economy has shown signs of promising-albeit slow- growth. A study by the University of Central Florida (UCF) showed the state economy to have grown 2.9 percent this year.

The study’s author, UCF economist Sean Snaith, hesitates to delineate this growth as evidence of a speedy or guaranteed recovery. According to an interview with the Miami Hearld, Snaith concluded: “Nothing’s really going to start percolating until 2011, and maybe the first quarter of 2012.”

Snaith’s hypothesis of a slow recovery largely coincides with the report issued by the Federal Reserve, which found positive economic growth throughout the nation. Even so, the report is not completely without qualms about the stamina of the economic recovery. In the last Beige Book report, the Federal Reserve showed signs of sluggish consumer spending, with particular emphasis on the South. Of the 12 economic districts studied in the report, in which Florida is included, only two showcased a hitch in economic growth: Chicago and Atlanta.

The Beige Book noted that Miami was showing improvement based on convention bookings and business travel. Thus, South Florida has been reveling in strong lodging revenue and occupancy rates in its hotels. Snaith’s report adds that the private citizens of South Florida will likely find their incomes increase 2.5 percent this year, after three sequential years of discernible declines. Though employment has declined this year, he expects it will begin its climb in 2012.

In spite of the growth in many of the districts nationwide, the Beige Book mirrored Snaith’s report in highlighting the slow rate of the progress. The report showed that any gains toward recovery will still be protracted, as there remains a lull in hiring practices, and real estate values continue to be poor. Residential real estate sales showed distinct dips, and Realtors reported a pervasive “pessimistic” mood about the future of the housing market. Florida, in particular, showed declining housing inventories while unsold homes were abundant elsewhere in the district. Snaith also signaled the BP oil spill catastrophe as a major player in the downturn of Florida’s tourism industry, one that he suspects will not fully recover until perhaps next year, or the year after. Snaith also told the Miami Herald that statewide payrolls would not return to their pre-recession levels until 2014, and in 2012, housing starts would only come back to match those of 2001.

Ultimately, despite slow and labored progress, both UCF and the Federal Reserve reports deduce that the recession has indeed passed and the recovery is on its way, slowly but surely.

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