Tallahassee, FL - Florida’s economic recovery won’t be a walk in the park but a slog through the weeds in 2011 as a dismal construction sector, tight credit, and wary consumers only reluctantly regain their pre-recession confidence, economists agree.
Double digit unemployment will likely linger over the next 12 months while housing starts remain depressed despite striking low prices, several economists say. Nationally, economic distress will continue in other regions of the country that historically have provided Florida with its newcomers who are now unable to sell their homes and finance their move south.
Still, economists say the seeds of recovery have been planted and will slowly take root in an economy chilled from the worst downturn since the Great Depression.
“The recovery has been underway since the late spring of 2010, but with growth rates that were more anemic than originally anticipated,” said Amy Baker, coordinator of the Office of Economic and Demographic research.
Unemployment will remain “stubbornly high” in 2011 as the state crawls out of recession and gets to work, a panel of state economists said in early December.
The state’s jobless rate could easily remain in double digits through 2011, as the state experiences a job recovery slowed in part by discouraged workers re-entering the workforce, said Sean Snaith, economist at the University of Central Florida, who predicts that the state’s unemployment rate won’t drop to single digits until early 2013.
“The economy got back on its feet in 2010, albeit on legs that were still rubbery,” Snaith said. “2011 will continue the expansion, but growth will decelerate until confidence in the recovery continues … and the labor market begins to return.”
The largest millstone around the state’s economic neck is the housing market, which remains a shadow of its 2006 peak, a precipice that may not be reclaimed for more than a decade.
Construction employment in November was off 4 percent statewide from a year earlier. In real terms, that’s 13,100 fewer jobs than an already anemic 2009 figure of 360,700. During the construction peak in 2006 nearly 700,000 construction workers held jobs in the boom.
Construction employment was off 10 percent in Palm Coast, 11 percent in Fort Lauderdale and 15 percent in West Palm Beach. Orlando and Gainesville were the only areas in the state to buck the trend of fewer jobs, with Gainesville holding steady for the year and Orlando employment inching up 2 percent.
Nationally, construction employment rose in 120 of 337 metropolitan areas, according to statistics compiled by Associated General Contractors of America, the industry’s national trade group. Industry officials credited the increase to federal stimulus efforts and military spending.
Consumer spending will remain moderate until workers feel comfortable that they will not lose their jobs and those who are under employed find the higher paying jobs for which they are qualified, Snaith said.
Until then, revenue collections for the state are expected to continue to fall below previous forecasted amounts. Collections for general revenue, highway spending and property taxes are also expected to be lower in 2011-12 than in the current fiscal year, according to recent calculations by the Office of Economic and Demographic Research.