Florida’s economy is the least of your concerns right now

Florida’s economy is the least of your concerns right now 

Excerpt: The chance of a recession in Florida has doubled in the past year, but it’s still low over the next nine months, a Florida Chamber Foundation economist said Monday. 

The foundation’s chief economist, Jerry Parrish, blames the increase on economic and political uncertainties. “When job creators see uncertainty in financial or international markets, they are less likely to invest,” 

In 2019, Florida is expected to create 150,000 new jobs — down from 180,000 forecast a year ago and the actual 196,600. “I still expect us to be growing faster than the U.S. rate,” he said. 

Two South Florida counties — Broward and Palm Beach — were among the top three counties adding jobs from November 2017 to November 2018. Broward added 20,185 jobs; Palm Beach County added 19,655 jobs. Orange County added the most — 37,713 — jobs in the state. 

Bottom Line: On one hand a recession is inevitable. It will happen again. On the other hand, despite a lot of fear mongering in December when stocks were selling off, there’s no indication that’s happening right now and especially in Florida. The Florida Chamber Foundation pegged the risk for recession in Florida at 20% this year. Since 1950 we’ve been in a recession at some point during the year for 15 years. Or in other words, at some point in 22% of the years. So, on one hand you might hear that there’s a 20% chance of a recession this year and become worried. With better perspective you’ll know that’s a below average risk of recession in Florida this year. You’re welcome that’s what I’m here for but that’s not all.  

The key to Florida’s economic success has been surprisingly simple and it directly relates to a quote in the story: “When job creators see uncertainty in financial or international markets, they are less likely to invest,”. That’s especially true closer to home. So is the inverse. Florida’s keys to success have been consistency. We’re a desirable state people like to visit and live and we’re a tax friendly and business friendly state. Florida’s economic risk is considerably lower in part due to the reliability of our state’s government. Regardless of what’s happening in the world around us, business leaders know that they’ll be able to anticipate low taxes and reasonable regulations for the foreseeable future. This would be a different conversation had Andrew Gillum, who promised significant tax increases on Florida’s larger businesses, become governor of Florida. 

Additionally, whatever risk to economic growth there might be nationally due to a partial government shutdown is minimized by Florida being less reliant on non-essential federal government agencies compared to most states. The bigger risk would be lower levels of tourism from outside of Florida but even then, my biggest concern is a slowing down of international tourism due to a slowing economy outside of the US.  

I have little doubt that economic growth with be lower in 2019 than 2018, but I also have little doubt that in Florida we’re still talking about economic growth. A positive economic surprise is just around the corner for tens of Americans of Americans, at least two million of which are Floridians... The impact of the Tax Cuts and Jobs Act. Tens of millions of Americans didn’t make any adjustments to federal withholding and haven’t realized the benefit of those tax cuts, but they will once they file.


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