OUTLOOK
ON 20l5
W H AT ’ S IN STO R E F O R
T HE Y E A R A HE A D
NEW YEAR’S
EDITION 2015
MISSION
To provide a one-stop-shop for the latest news and
valuable insight on Florida's economy and financial health
RESOURCES
Chief Financial Officer Jeff Atwater is committed to making Florida
more consumer and business-friendly by ensuring consumer rights and
protections, reducing regulatory burdens, and fighting fraud.
PARTNERS
Florida’s Bottom Line is produced by the
Florida Department of Financial Services in association with:
www.MyFloridaCFO.com
www.MyFloridaCFO.com
ACCESS EVEN MORE
RESOURCES ONLINE >>
For daily Florida economic updates, please visit MyFloridaCFO.com/FloridasBottomline
CFO LETTER
Dear Fellow Floridians:
The beginning of a new year is an important time to reflect on what we have accomplished and
what we want to achieve in the year ahead. Over the past year, Florida’s economy has seen profound
growth in many areas and we entered 2015 well-positioned to take advantage of these gains and
continue to grow.
Looking back on 2014, we see that Florida’s economy is on the right track: Job growth increased and
outpaced the nation; population growth returned with Florida surpassing New York to become the
third most populous state in the nation in part because our sound policies and unbeatable climate
attract businesses and people; business investment reached its post-recession high; and in every
quarter, more visitors have come to Florida this year than they have ever in the past. This economic
momentum, coupled with a commitment to fiscal discipline, sets the stage for Florida to continue
reaping the rewards of its hard work throughout 2015.
New industry is rapidly taking root and expansions in many industries, including in the aviation, life
sciences, and technology sectors, will bring additional investment, businesses, and jobs to the state.
Florida also began the New Year in prime financial condition with state debt at historic lows and an
estimated budget surplus of $1 billion.
This New Year’s edition of Florida’s Bottom Line is focused on the opportunities that lie ahead of us
in the coming year as well as highlights of the progress that we have made in the past year. Inside,
you will find economic forecasts and expert analysis on Florida from leading economists, insightful
outlooks on key industries from the industry leaders themselves, and a look back on Florida’s
economic achievements in 2014.
As we embark on this New Year, it is important to acknowledge that Florida’s economic future will
continue to be shaped by the hard work and perseverance of Floridians. It is your dedication that
not only allows us to build upon our accomplishments, but reach new heights of economic success
and prosperity.
INSIDE
STORIES
FLORIDA'S ECONOMIC OUTLOOK
BY CHRIS MCCARTY
SEE PAGE 1
FLORIDA'S ECONOMIC OUTLOOK
BY SEAN SNAITH
SEE PAGE 2
INDUSTRY OUTLOOKS FOR 2015
SEE PAGE 3
I wish you and your family a Happy New Year.
Sincerely,
A LOOK BACK ON 2014
SEE PAGE 5
Jeff Atwater
Chief Financial Officer
State of Florida
SUBSCRIBE TO FLORIDA’S BOTTOM LINE »
SEND US YOUR COMMENTS!»
FLORIDA'S ECONOMIC OUTLOOK
BY CHRIS MCCARTY
Florida’s economy is
recovering. By virtually any
economic measure, we are far
better off in January 2015 than
we were when the recession
ended in 2009.
Annual population growth is
getting closer to pre-recession
levels as retirees once again
been boosted by a rebound in
tourism, which will continue to
rise to record levels next year.
A main driver of Florida’s
economic recovery has been
in housing; the economic
sector that led to the recession.
Home prices have gone up,
increasing the net assets of
500,000
400,000
300,000
200,000
JANUARY
1/16/2014
FLORIDA’S
REBOUND FROM
GREAT RECESSION
STRENGTHENS
Miami Today
FEBRUARY
move to the Sunshine State.
This trend should continue into
2015 as Bureau of Economic
and Business Research
(BEBR) demographers project
population growth of more
than 260,000 next year, not yet
the average 300,000 growth
we have seen over the last four
decades, but getting there.
Consumer sentiment as
measured by BEBR’s monthly
survey reached a post-recession
high of 87.4 in December and
will continue to rise to above 90
by the middle of next year.
The recovery in Florida has
15
20
20
20
0
10
100,000
05
Chris McCarty, Ph.D., is
the director of the Survey
and Research Center and
the director of the Bureau
of Economic and Business
Research at the University
of Florida.
Population Growth
FLORIDA'S ANNUAL POPULATION CHANGE
many Floridians. However,
current prices are close to
where they would have been
had the housing bubble not
occurred and, with 30 percent
of Florida mortgages still
underwater, negative equity is
still a problem. Further, with
the Federal Reserve expected
to begin raising short-term
interest rates in 2015, we
should expect historically low
mortgage rates to go up, which
will make purchasing a home
less affordable. While home
prices are not expected to
decline, they are not likely to
increase at the pace of recent
years in 2015.
With the recovery in housing,
we have regained some of
the construction jobs lost
during the Great Recession,
but are still down 39 percent
from their peak in 2006.
However, gains in the Trade,
Transportation, and Utilities,
Professional and Business
Services, Education and
Health Services, and Leisure
and Hospitality industries
have offset this loss in
construction jobs.
Overall, the unemployment
rate in Florida has declined to
5.8 percent and will likely be
near 5.0 percent by the end of
2015. In this recovery, workers
have generally been slow
to return to the labor force.
Despite strong labor force
growth in 2014, Florida’s labor
force participation rate of 60.6
is about where it was in 1986.
As the job market expands in
2015 more people, particularly
the long term unemployed are
expected to come back into the
labor force.
Heading into the New Year,
Florida is on the right track.
Continued diversification of
Florida’s economy will make
it less dependent on cyclical
employment, such as tourism
and housing, and investment
in new sectors of employment,
such as manufacturing,
biotechnology and health care,
will create the kinds of jobs
that will keep talent in the state
and boost economic growth.
2/17/2014
FLORIDA RANKS
3RD FOR IT JOBS
Infoworld
FOR MORE INFORMATION, PLEASE VISIT WWW.BEBR.UFL.EDU
Jeff Atwater | Chief Financial Officer
Florida’s Bottom Line
1
FLORIDA'S ECONOMIC OUTLOOK
BY SEAN SNAITH
In 2014 we learned that the recession in Florida was more severe than originally thought.
New data on real GDP growth in Florida released this year showed that Florida’s economy continued
to contract throughout 2010 and 2011. The official end of the national recession was June 2009, which
means real output in Florida continued to contract for two and a half years after the Great Recession
came to an end. While there are no official start or end dates assigned to state level recessions, Florida
began to lose payroll jobs in April of 2007, suggesting that the economy slipped into recession earlier
than the December 2007 start of the national recession.
This new perspective on history makes Florida’s economic recovery look all the more impressive.
Florida’s economy has, in a short amount of time, gone from lagging the U.S. recovery to solidly
outpacing it. We expect that Florida’s economy will continue to do so in 2015.
Job growth in Florida ended with a bang in 2014 and that momentum will carry over in the New Year.
Florida’s payrolls should grow at a pace of 2.5% in 2015 with the Construction sector leading the way
with annual growth of 8.7%. Other sectors expected to have strong payroll job growth in 2015 include
Professional & Business Services at 3.7%, Trade, Transportation & Utilities at 2.6%, Education & Health
Services at 2.4% and Leisure & Hospitality at 2.3%. Job growth in Florida will remain well above the
growth rate nationally.
Real GDP growth in Florida is also expected to outpace the growth of the nation’s real GDP. Real
GDP growth in the United States has averaged just 2.2% for the five and a half years since the national
recovery began. We expect Florida’s real GDP growth to be 2.7% in 2015 and to accelerate from there.
Real GDP growth, like payroll job growth, is expected to be stronger in Florida than in the nation
as a whole.
Income growth in Florida will reflect the strength in both job growth and real GDP for 2015. Real
personal income growth is expected to be 3.4% in 2015 while real disposable income growth is expected
to be 3.2%. Both income measures will experience accelerating growth beyond 2015. Given the relative
pace of economic and job growth in Florida, it should not come as a surprise that growth in real income
in Florida will be higher than real income growth nationally in 2015 and several years thereafter.
Florida’s housing market continues on its upward trek from the bottom of a residential real estate
crevasse and will continue to do so in 2015. Home prices, sales, and housing starts will all continue to
improve in 2015, though headwinds from low levels of mortgage availability and the Federal Reserve’s
eventual tightening of monetary policy will stiffen growth through 2015 and beyond.
Population growth in Florida will gain momentum in 2015 as domestic migration is bolstered by Baby
Boomer retirements, an economic driver that will feed into Florida’s economic growth for many years.
High levels of financial asset wealth and recovering home equity are both feeding into retirement
decisions that were temporarily derailed by the housing and financial crises.
There are several potential sources of turbulence that could alter Florida’s economic trajectory in 2015.
The global economic recovery continues to weaken in many parts of the world with the increasing
possibility of the Eurozone reentering recession, Japan in recession, China’s decelerating growth
threatening defaults on construction debt, and Brazil fighting high inflation and slow growth, just
to name a few sources of global weakness. This, coupled with a stronger dollar, will put a squeeze
on export growth. Plunging oil prices are also putting the squeeze on many oil-dependent emerging
economies as well those in as developed nations such as Canada and the United States, where the
fracking oil boom could be undercut if prices stay too low for too long.
The bottom line for Florida’s economy in 2015 will be a
continuation of strong economic and job growth that outperforms
the national economy. The economy has come a long way from the
depths of the recession, even further than was initially thought.
And given our history, this economic growth tastes even sweeter.
Sean Snaith, Ph.D., is the
director of the University
of Central Florida’s
Institute for Economic
Competitiveness and a
nationally recognized
economist in the field
of business and economic
forecasting.
MARCH
3/25/2014
FLORIDA NOW A
‘FRONT-RUNNER’
FOR U.S. ECONOMY
Sun Sentinel
APRIL
4/3/2014
FLORIDA BUSINESS
OWNERS OUTLOOK
BRIGHTENS
Tampa Bay Business Journal
FOR MORE INFORMATION, PLEASE VISIT WWW.IEC.UCF.EDU
Jeff Atwater | Chief Financial Officer
Florida’s Bottom Line 2
MAY
5/8/2014
FLORIDA RANKED
2ND BEST STATE
FOR BUSINESS
IN 2014
Chief Executive
INDUSTRY OUTLOOKS
FOR 2015
LIFE SCIENCES
The life sciences is a vibrant and critical component of our state’s
economy. Florida has made great progress and is now recognized as a
leading hub with world-renowned universities and research institutes,
award-winning incubators and research parks, and a growing base of
emerging and established companies in the biotech, pharmaceutical,
medical device and bioagriculture fields.
JUNE
6/5/2014
FLORIDA WINS
SILVER SHOVEL
AWARD FOR
JOB CREATION,
ECONOMIC IMPACT
SUCCESS
Orlando Business Journal
NANCY BRYAN
President & CEO
BioFlorida
This next year promises to be very exciting with significant
opportunity to leverage this infrastructure to drive investment,
scientific and business innovation and growth. Recently, we have seen
increases in venture funding and companies expanding across the
state. These trends will continue in 2015 with additional companies
choosing to locate in Florida and existing companies expanding their
operations. This growth positively impacts the economy, job creation
and ultimately improves health.
JULY
7/17/2014
FORECLOSURES
FALL TO LOWEST
LEVEL IN 8 YEARS
Daily Finance
AUGUST
8/19/2014
RETAIL
There’s no denying the face of retail is changing. Gone are the days
of music and hors d’oeuvres at Burdines. Today, shoppers prefer
convenience and value. If a retailer isn’t online already, they will be
soon- doing so is equivalent to adding 10 new stores. In Florida, we
are extremely blessed with great beaches, tourist attractions and four
of the 10 largest malls in America. 2015 will bring an even stronger
surge of travel and consumer confidence, and with it, spending. New
lifestyle centers will continue to pop up, featuring fast fashion alongside
staple grocers and niche retailers. Brick and mortar will maintain their
loyal customer base, for those who favor a touch-and-feel shopping
experience. Unemployment will continue to drop, and retailers will play
their role in providing every one in five jobs here in Florida.
RECORD NUMBER
OF TOURISTS
VISITED FLORIDA
LAST SPRING
CBS Miami
Jeff Atwater | Chief Financial Officer
RICHARD A.
MCALLISTER
President & CEO
Florida Retail
Federation (FRF)
Florida’s Bottom Line 3
INDUSTRY HIGHLIGHTS FOR 2015 (CONTINUED)
SEPTEMBER
TOURISM
I am constantly amazed at how far Florida’s tourism
industry has come in the last 20 years and how much potential we
have to continue growing. The ceiling for Florida's tourism industry is
very high with the combination of: visionary public sector leadership;
passionate and engaged private sector leadership; the best tourism
product in the world; over 1 million Floridians who provide exceptional
experiences to our guests every day; and, the innovative marketing
from VISIT FLORIDA and our industry partners across the state.
Given the power of the industry’s momentum, I have no doubt that
2015 will be another record year for visitors, visitor spending and
hospitality jobs.
WILL SECCOMBE
President & CEO
Visit Florida
9/3/2014
FLORIDA EXPORTS
CREATE 275,000
JOBS, FEDS SAY
Palm Beach Post
OCTOBER
10/20/2014
REAL ESTATE &
CONSTRUCTION
FLORIDA
POPULATION
SURGING AGAIN
Sun Sentinel
The Florida real estate and construction industry is poised for a
strong 2015. Four factors converge: (1) improving underlying
demand; (2) continued low interest rate environment; (3) favorable
conditions for business expansion in Florida; and, (4) low energy
costs. 2015 should be the best year since the recession and I am
bullish on the long-term future for Florida.
NOVEMBER
STEVEN T.
HALVERSON
Chief Executive Officer
Haskell Company
TRADE & TRANSPORTATION
Florida’s seaports play a critical role in the lives of our citizens and
are a key driver of the economy. They support more than 680,000
direct and indirect jobs, and contribute $96 billion in economic value
to Florida through maritime activities. However, a re-alignment
of global trade routes is underway, and Florida's ports are focused
on investing in the infrastructure needed to remain competitive,
with the goal of becoming a global trade hub. In 2015, we hope to
advance that goal by investing in projects that capture a larger
share of containerized imports serving Florida, and that attract
manufacturing and other industries to Florida.
DOUG WHEELER
President & CEO
Florida Ports Council
Jeff Atwater | Chief Financial Officer
11/25/2014
FLORIDA RETAIL
SALES OUTPACE
THE NATION
Florida Trend
DECEMBER
12/15/2014
ECONOMISTS
PROJECT NEARLY
$1 BILLION
SURPLUS FOR
FLORIDA BUDGET
Tampa Bay Times
Florida’s Bottom Line 4
NEW YEAR'S 2015
A LOOK BACK ON
FLORIDA RANKED 2ND
FOR NEW HOME PERMITS
GAS PRICES
FELL BY
37%
150,000
Source: U.S. Census
As of November 2014
GAS PRICES
HAVE FALLEN
79,000
BY 28.3%
APR
2014
DEC
2014
$03.42
$03.73
$02.35
46,000
Texas
Florida
3RD
FLORIDA BECAME THE
MOST POPULOUS STATE IN U.S.
FLORIDA IS THE 2ND BEST
STATE FOR BUSINESS
- Chief Executive Magazine
JEFF ATWATER
Jeff Atwater
| Chief Financial
CHIEF
FINANCIAL
OFFICER Officer
6.6%
UNEMPLOYMENT RATE
FLORIDA RANKED 5TH
BEST BUSINESS TAX
CLIMATE IN NATION
- Tax Foundation
North Carolina
Georgia
CONSUMER CONFIDENCE
AT 7-YEAR HIGH
Source: U.S. Energy
Information Administration
As of December 29th
FLORIDA HAS THE 3RD BEST
WORKFORCE IN THE NATION
-CNBC
California
33,000
FLORIDA CREATED 229,900
NEW JOBS IN 12 MONTHS
ECONOMIC PROSPERITY
BOLSTERED JOB MARKET
9.7
9.6
6.3%
9.5
6.0%
9.4
FL UNEMPLOYMENT RATE
FL LABOR FORCE
5.7%
NOV
JAN
MAR
2013
2014
2014
Source: Bureau of Labor Statistics
As of November 2014
9.3
MAY
2014
JUL
2014
SEP
2014
LABOR FORCE (Millions)
JAN
2014
76,000
NOV
2014
For more information about Florida’s economy, please visit
Florida’s Bottom Line 5
www.MyFloridaCFO.com/FloridasBottomLine/