Q&A of the Day – How Impressive Florida’s Economy Really Is
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Today’s entry: Brian, I really enjoyed hearing about Florida’s economy being so much stronger than the rest of the country. I think most people realize that DeSantis keeping Florida open and the population gains etc. have helped but maybe not to the level that you mentioned. I’m surprised there hasn’t been more coverage of what you’re talking about (at least in business publications). I’d like to hear more about this if you have additional information. Thanks.
Bottom Line: Ask and you shall receive. You don’t have to exactly twist my arm to get me to talk more about Florida's economy. There aren’t many good news stories out there, but this happens to be a great one. From the recent characterizations of South Florida becoming Wall Street South, as a myriad of Wall Street firms have traded Manhattan for palm trees... To reports of Florida being the top state for relocations over the past couple of years...it's rather well known that Florida’s economy has got it going on. But like you, even with as much time as I spend researching economics and covering Florida’s economy, I was impressed with what I recently discovered and reported on in yesterday’s takeaways. As mentioned... The state’s latest monthly revenue report shows revenue nearly $742 million or 22%, above estimates. What’s more – net revenue to the state of Florida increased by 22.8% year-over-year. To put this in perspective, Florida is the third biggest state in the country, and our economy has most recently, stunningly outperformed the national average by an approximate 25%! Florida’s economy has been the best relative performer nationally over the past year but even that reality doesn’t do our state’s story justice.
It’s probably not best for one to hold their breath expecting Florida’s phenomenal economic outperformance to be widely reported, however in this case it’s somewhat explainable. My account is based on the net revenue from Florida’s most recent revenue report contrasted with the Atlanta Federal Reserve’s GDPNow tracker. Few people in even business news reporting are wonky enough to travel down that path. The bigger tell will be when Florida’s 2nd quarter economic reporting is available along with the 2nd quarter US GDP report are in. Regardless, you’ve asked for more and I can supply it. There is a remarkable economic story in Florida that’s hasn’t fully been told. While we’re waiting for the second quarter results to be finalized, we’ve known what Florida’s outperformance looked like to start the year.
Florida’s first quarter GDP grew by an incredible 12% year-over-year. 12% economic growth for a state as large as ours is remarkable regardless of what’s happening with the overall US economy. But when you compare it to what happened in the rest of the country it’s that much more stunning. The US economy contracted by 1.6% in the first quarter. That means Florida’s economy outperformed the US economy by a staggering 13.6% to start the year. What’s more, Florida’s performance essentially halved the economic contraction nationally. Had Florida’s economy simply been flat, the US economy would have contracted by about 3%. In other words, if the current recession proves to remain a shallow one, that would essentially be the case on the strength of Florida’s economy alone. But as cool as that was, it’s nowhere near as impressive as what’s happening right now.
Based upon the economic analysis I shared with you based on what we know from the second quarter...Florida’s economic story has only been getting better as the US economy has only been performing worse. You’ll occasionally get wild swings in small state economies that run counter to what’s happening around the country (especially during and coming out of the pandemic), but what we’re seeing in Florida is unheard of for a large state’s economy – especially during a recession. And that’s why I’ve also concluded this... With Florida’s economy substantially bucking the national trend – there’s a possibility we’ll be somewhat insulated from the national recession while being able to take advantage of cheaper prices as a result of it. This summer is shaping up to potentially be a summer of opportunism for Floridians. From retail stores to investments – there's about to be the opportunity for better deals for those in a position to take advantage of them. If that’s you it’s a good time to have some power dry and to keep your eyes open for opportunity. No doubt this isn’t a good time for the country. But it’s the best time (relatively) it's ever been to be a Floridian.