Florida’s Economic Outlook: Brighter Skies Forecast

A once-gloomy outlook for Florida is being replaced by the blue skies of a brighter day. And the sun will shine once again on the Sunshine State.

Steve Nicklas
Steve Nicklas
EDITOR’S NOTE: Contributing Columnist, Steve Nicklas, expresses his views and insights on various topics in Marketplace column.

___STEVE’S MARKETPLACE___

Talk about a promising prognosis. Florida’s economy will be removed from life support and would receive a clean bill of health — stronger and more resilient than before.
At least that’s according to a recent report issued by an economist with Wells Fargo, a major financial institution. The report predicts that Florida will be the top state in the country for creating jobs across a broad spectrum of industries.

The forecast is even more surprising since Florida’s economy has been tethered to tourism, construction and retail jobs. In future years, however, Florida will emerge with a more diverse economy.

“Many people don’t realize just how diverse Florida’s economy is,” says Wells Fargo senior economist Mark Vitner.

This is not to say Florida’s economy will make a sudden and dramatic recovery. Things will remain unsteady in the next few years.

According to the report, “The Sunshine State is currently battling back from one of the deepest recessions ever, and more time will be needed before strong growth returns. “But strong growth will most assuredly return.”

Florida will experience more rapid growth than most states in 22 or 25 industries that were studied (Georgia and North Carolina were next on the list). This will help insulate Florida from another decline like the recent Great Recession, when 350,000 jobs were lost in the construction industry alone.

Florida’s resurgence will be based upon demographics. As retirees resume their migration to the warmer-weather climates of states such as Florida, they will create demand in a variety of industries. This will be fostered by an improving real estate market in the northeast, which will allow retirees to sell their homes and head south.

Also, job-seekers will move here to support the wealthy retiree population, attracted by the current fire-sale prices of property. This will help spur demand in industries such as retail, tourism, and especially health care.

Health care has proven to be a recession-proof industry, if there is one. In North Florida alone, there has been substantial growth in this sector.
New facilities have been built in recent years by the Mayo Clinic and Nassau Baptist Hospital, for instance. And this was during one of the worst recessions most of us have ever experienced.

High-growth industries such as professional and technical services, finance and insurance will also flourish in Florida in coming years.
Not everything in the report is positive. Many of the new jobs will be lower-paying ones. For instance, home-health aides will be needed to provide care for the elderly. These jobs typically pay less, but are critical.

Also, Florida’s jobless rate is not expected to reach desirable levels for another five to seven years. It will take this time to emerge from the economic hole created by the recent recession.

But the road forward will be smoother than the latest stretch. In fact, a once-gloomy outlook for Florida is being replaced by the blue skies of a brighter day.
And the sun will shine once again on the Sunshine State.

Steve Nicklas is a financial advisor with a major Wall Street firm who lives on Amelia Island. He can be reached at 904-753-0236 or at [email protected].