Report: South Florida to see slow return to economic health
A budding economic recovery slowed down in Florida, according to a new report from the Federal Reserve.
Wednesday’s release of the Beige Book — a snapshot of the national economy compiled from a dozen regional reports — captured a string of financial news suggesting an encouraging recovery slowed down this summer.
Miami got one mention in this Beige Book, with the authors noting that hotels report an uptick convention bookings and business travel. That trend has been apparent all year, and is helping drive a strong rebound in lodging revenue and occupancy rates across South Florida.
Florida’s economy falls into the Fed’s “Atlanta” region, and the Sunshine State received an outsized burst of mentions in this Beige Book because of the Gulf oil crisis. The authors noted “significant concerns” over the spill’s impact on tourism.
There were positive signs mixed with discouraging news. Across the Atlanta region, businesses are adding hours to payroll without hiring new workers. Retailers reported a slight increase in sales, but were less optimistic than when they were during interviews for the June Beige Book.
Residential real estate sales also slowed, and people in that industry had a “pessimistic” outlook. Even so, Florida was singled out as having declining housing inventories while unsold homes increased elsewhere in the district.
The Beige Book came the same day a new economic outlook predicted slow growth across Florida this year and for the rest of the decade.
University of Central Florida economist Sean Snaith predicts incomes across South Florida will grow this year and for the rest of the decade as the region crawls through a slow economic recovery.
Statewide payrolls won’t return to their prerecession levels until 2014 and in two years housing starts will only rebound to where they were in 2001, Snaith wrote.
“Consumers in Florida have been beleaguered, much more so than their counterparts around the country, by disappearing home equity and an evaporation of stock market wealth,” Snaith said.
Still, the report reinforces the consensus of economists across the country that, by the math, the recession has passed and a fragile recovery has taken hold. For the combined economies of Palm Beach, Broward and Miami-Dade, Snaith’s forecast predicts mostly positive numbers through the decade.
Real personal incomes in South Florida should grow 2.5 percent this year after three straight years of declines, the report said. That’s despite a 1.3 percent decline in employment, with job growth expected to flatten next year and then hit a modest stride of 2.3 percent in 2012.
Snaith’s report also said the BP oil disaster will put off a full recovery in Florida’s tourism industry by at least a year. He doesn’t expect statewide employment in leisure and hospitality to grow until 2012, defying more optimistic predictions before the spill.
“This was supposed to be the time that tourism was finally going to emerge from under the cloud of that recession and begin to recover,” he wrote.
BY DOUGLAS HANKSdhanks@MiamiHerald.com
