JEF F ATWATER
F LO RI DA’ S C H I EF F I NANC I AL O F F ICE R
FLORIDA'S BOTTOM LINE
Inside Track on Florida’s Financial Health
NEW YEAR’S
EDITION 2013
ALSO:
florida’s talent supply chain and governor scott
on his college and career first agenda
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
INSIDE
STORIES
CFO’S CORNER
LETTER FROM THE CFO
Talent Gap
SEE PAGE 1
Dear Fellow Floridians:
The New Year is an exciting time because it
brings to mind all of the possibilities that lie
ahead of us. The same can be said for Florida.
The evidence is clear that Florida is headed
in the right direction as new companies are
investing in our state, businesses already here are
growing, and more Floridians are finding jobs.
Real Estate
SEE PAGE 3
Financial
Outlook
Embarking on the New Year also gives us pause
to reflect on the advances Florida has made in
2012. Since last January, payroll employment has
grown by tens of thousands of private sector jobs.
CFO Atwater touring Ronco Machine
And as the overall economy has steadied, Florida’s
& Rigging in St. Augustine
housing market has also improved; home prices
in most areas have experienced consistent year-over-year appreciation while sales have grown. The
country is taking notice of this progress. Not only did the number of visitors to Florida climb in 2012,
but so did the number of people moving here from other states. After having stumbled in the wake of
the recession, Florida has again become a top destination for Americans, according to the U.S. Census
Bureau. Florida is also setting itself apart on a national scale by continuing to excel at education
compared with other states and the country as a whole. Our accomplishments demonstrate that
our state remains committed to ensuring that all Florida’s youth have access to the best educational
opportunities in the world. While many challenges must be overcome, this past year has been a
hopeful indication for the future.
This New Year’s Edition of Florida’s Bottom Line is dedicated to understanding the impact of these
important economic trends from 2012, and getting the facts about where Florida stands going into the
New Year. Authorities on the housing market, jobs and finance have all contributed information that
I hope will help inform your decisions in 2013. Inside, you will also find expert commentary on how
Florida is harnessing a critical driver of sustainable economic growth: our education system.
Also for the New Year, Florida’s Bottom Line has launched an online database of small business
resources. Whether you are a current business owner or an aspiring entrepreneur, I hope you will
visit our website to connect with the many Florida organizations dedicated to helping you fulfill
your specific goals. Be sure to check back often, as we frequently update the site with more tools
and information!
SEE PAGE 4
Student Success
SEE PAGE 5
Jobs
SEE PAGE 6
Economy
SEE PAGE 7
Fast Facts
SEE PAGE 8
ACCESS
EVEN MORE
RESOURCES
ONLINE >>
I hope that 2013 will be a prosperous year for you and your family.
Sincerely,
Jeff Atwater
Chief Financial Officer
State of Florida
2 »Florida’s Bottom Line
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JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
CLOSING FLORIDA’S TALENT GAP: THE
CASE FOR ENHANCED ACCOUNTABILITY
By Susan Pareigis
Susan Pareigis is the President and CEO of the Florida Council of 100, a
forum of strategic thinkers and leaders that aims to have a major positive
effect on Florida public policy that enhances the quality of life and
economic well-being of all Floridians.
Florida faces an emerging Talent Gap — an urgent shortage of a
resource as basic as food, more valuable than gold, and in higher
global demand than oil. This crisis in human capital represents
a vast and growing unmet need for a highly skilled and educated
workforce — our state’s most important resource for driving
sustainable economic development and a diversified economy.
In fact, employers across the nation are speaking out about
the skills deficiencies of today’s workforce. Two recent surveys
are particularly illustrative: a 2011 study entitled “Across The
Great Divide: Perspectives of CEOs and College Presidents on
America’s Higher Education and Skills Gap,” which found that 53
percent of business leaders say their firms face great challenges
in finding employees with adequate training and skill levels, and a
December 2012 report from McKinsey & Company, “Education to
Employment: Designing a System That Works,” which discovered
that 45 percent of employers cited a “skills shortage” as a key
reason for entry-level job vacancies at their companies.
Of course, the Talent Gap comes at a severe price. Suboptimal
worker skills in areas such as communication (written and verbal);
teamwork; research, analytical, critical thinking and problem
solving; computer literacy; and work ethic and initiative, cost
Florida businesses an estimated, annual average of $459 per
worker in remediation training, or more than $3.5 billion per year
– as well as foregone employment opportunities and wages for
our graduates.
So how do we turn this around? In 2010, the Florida Council of
100 published “Closing the Talent Gap: A Business Perspective,”
which declared that the following 10 principles should drive
discussion of all talent-related issues and be a lens through which
policies and programs are evaluated and alternatives assessed:
•Market-determined need: Supply and demand must drive program creation, expansion, and contraction.
•Access: A person’s circumstances (demographic, geographic, economic or otherwise) must not be a barrier to full participation in the education system.
•Highest expectations: Performance standards must be established and maintained at the highest levels,
nationally and internationally.
•Accountability: All participants and providers must answer for their performance.
•Rewarding performance: Superior results merit
superior benefits.
•Cost-effectiveness: Resources must be allocated where they have the
greatest impact.
•Administrative efficiency: Front-line funding must
be maximized.
•Leveraging resources: Private and federal monies must be brought to bear whenever possible.
•Partnership: Cross-
organizational synergies must be fostered, institutionalized, and capitalized.
•Data-driven decision-
making: Objective analysis
must drive policy.
Two current initiatives, which
exemplify these concepts, are
the K-12 transition to Common
Core standards and assessments
and the push for new higher
education performance metrics,
incentives and funding.
Common Core Standards
and Assessments
The Common Core State
Standards Initiative is a
state-led effort to develop
and implement rigorous
K-12 language arts and math
standards that are “aligned with
college and work expectations;
are clear, understandable and
consistent; include rigorous
content and application of
knowledge through high-order
skills; build upon strengths
and lessons of current state
standards; are informed by
other top performing
countries, so that all
Closing the Talent Gap:
a Business Perspective
CONTINUED ON PAGE 2
1 Florida’s Bottom Line
JANUARY
1/27/2012
FLORIDA BANK
FAILURES SLOWED
DOWN IN 2011
Tampa Bay Business Journal
1/30/2012
US STOCKS FALL
AS GREECE,
PORTUGAL STOKE
ANXIETY
Wall Street Journal
FEBRUARY
2/28/2012
FLORIDA
CONSUMERS
REMAIN MILDLY
OPTIMISTIC
BEBR
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
students are prepared to
succeed in our global economy
and society; and are evidencebased.” Forty-five states have
signed-on to use the standards,
with Florida having adopted
them in 2010. Roll-out began
during the 2011-12 school
year and is scheduled to be
completed in 2014-15. Parallel
with this initiative, Florida is
the leading participant in the
Partnership for Assessment
of Readiness for College and
Careers (PARCC) consortium,
a group of 24 states, which is
creating exams relating to the
Common Core standards. It
is likely that such tests will be
developed at a difficulty level
commensurate with those used
by PARCC Governing Board
Chair Massachusetts, which is
generally thought to have one
of the highest K-12 academic
bars in the country. Thus, when
Florida begins implementing
PARCC assessments in 2014-15,
it is possible that our students’
initial scores won’t meet our
highest expectations.
That being said, it is imperative
that we stay the course with
Common Core and PARCC.
The record shows that our
students and educators have
always risen to the occasion
when faced with a higher
bar. While it is true that our
schools must be empowered
to maximize instruction time,
these particular assessments
go right to the heart of what
it means to be college- and
career-ready and, thus, should
be prioritized and tailored to
our students’ needs. Further,
because assessment without
accountability is meaningless,
performance on these exams
must carry definitive weight.
Higher Education Performance Metrics, Incentives and Funding
Although Florida’s postsecondary systems and institutions have
gathered and reported extensive performance data for many years,
there has been a recent push to better link inputs (e.g., enrollment)
and outputs (e.g., degrees awarded) to outcomes (e.g., employment
of graduates) and efficiency measures (e.g., cost per graduate).
The first-of-its-kind Economic Security Report (ESR) created
under House Bill 7135 (2012) is a prime example of this effort.
Beginning December 31, 2013, the Department of Economic
Opportunity must annually prepare an ESR containing
employment and earning outcomes for degrees and certificates
earned at public postsecondary educational institutions, and,
beginning in the 2014-15 school year, every state university,
community college, high school and middle school must provide
each student electronic access to the ESR. The idea is that students
will use this data to inform their postsecondary school and degree
program decisions – and that lower-performing institutions will be
motivated to improve.
As a complement to the ESR, the Council of 100 recommends
that the state investigate the use of mandatory standardized
end-of-college learning outcome exams, similar to those already
conducted on a sampled basis by most Florida universities
under the nationwide Voluntary System of Accountability. These
assessments measure improvement, over the college years, in
students’ abilities to think, reason, and write. They could also
provide a direct, and relatively immediate, feedback loop that
could improve both school and student performance. For example,
if students know that they will have to pass a test at the end of
their college career and/or that their score on that test could
be reported to potential employers, they will study harder and,
presumably learn more. Equally important, potential employers
would have a direct indicator of the student’s skill-level.
Lastly, it is vital that such outcome data be used to incent
institutional performance. Schools that produce skilled graduates
who are assets to the Florida economy should be rewarded with
benefits such as budget flexibility, regulatory flexibility and
new funding to expand their good work. Similarly, schools who
struggle in this area should be identified and helped to improve.
It is also time that Florida look at joining Tennessee and Georgia
in implementing postsecondary funding systems driven wholly or
mostly by performance rather than enrollment.
In short, if Florida hopes to shrink its Talent Gap, data-driven
educational accountability must be a, if not the, compelling force.
Both our PreK-12 and postsecondary systems have made great
strides in this arena, but we can ill afford to let up on the gas. It is
vital that we stay the course and finish implementing Common
Core standards and assessments, and it is imperative that the
resulting student learning gains ultimately translate to success in
college and the workforce. The livelihoods of all Floridians depend
on it.
LEARN MORE ABOUT THE FLORIDA COUNCIL OF 100 AT WWW.FC100.ORG
2 Florida’s Bottom Line
2/29/2012
STUDENT LOANS
NEAR $1 TRILLION
HURTING YOUNG
BUYERS
Bloomberg Businessweek
MARCH
3/28/2012
GOVERNOR RICK
SCOTT SIGNS TAX
CUT, JOBS BILLS
Tampa Tribune
APRIL
4/10/2012
SMALL BUSINESS
OPTIMISM DROPS
TO 6-MONTH LOW
The Business Review
MAY
5/3/2012
CEOS RANK
FLORIDA AS
SECOND-BEST
STATE TO DO
BUSINESS IN
Tampa Bay Times
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
5/18/2012
FLORIDA’S REAL ESTATE
MARKET: 2013 AND BEYOND
By John Tuccillo, Ph.D.
Dr. John Tuccillo is the Chief Economist for Florida Realtors® and heads
its Industry Data and Analysis Department.
The real estate market in Florida is in full scale recovery, and
has been since the beginning of 2010. If you’re pressed for time
and don’t want to read through this entire article, here’s all you
need to know about Florida’s real estate market in 2013 and 2014:
Everything that should be going up is going up and everything
that should be going down is going down. There, wasn’t that easy?
But, of course, you want to know more, and I will illustrate. What
should be rising in a recovery are closed sales (people are buying
more houses), pending sales (people are intending to buy more
houses), and prices (they’re buying more expensive homes).
Going down are days on the market (homes are selling quicker),
inventory (buyers are facing less choice) and listings (the market
is clearing). While we could go into depth on all of these, let’s just
20,000
18,000
FLORIDA EXISTING HOME SALES
2012
16,000
14,000
2011
2010
12,000
10,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CLICK GRAPHS TO SEE SOURCE DATA
Interest rates are low and
likely (according to Ben
Bernancke) to remain low
through 2015. This provides an
accommodating background for
the market. Second, investors
have flocked into the market.
The liquidity the Federal
Reserve has pumped into the
market, together with the
revival of the stock market, has
rebuilt the wealth portfolios
of individuals and funds. Not
wishing to be caught in yet
another financial meltdown,
investors are diversifying
into real estate, substantially
boosting the Florida market.
Domestic investors have been
abetted by foreigners,
who find American real estate
incredibly cheap and Florida
incredibly attractive.
But the most important factor
in driving Florida’s housing
recovery has been job growth.
Real estate is joined at the hip
to employment and Florida has
created jobs continually since
the beginning of 2010. The
following chart describes the
linkage. The improvement in
employment in the state has
pushed home sales and should
continue to do so.
consider closed sales. The chart represents homes sold in Florida in
2010, 2011 and through November of 2012. For the most part, each
year has been better than the last, generally by about 10 percent.
So, where to next? I think we
will see ten percent increases
in sales for 2013 over 2012
Our expectation is that this trend will continue, as will the trends for and another 10 percent in
all the other important housing market metrics.
2014. Prices are the real
enigma. Clearly, the number
But the real story doesn’t lie in the numbers, but in the factors
of distressed properties still on
the market or in the foreclosure
determining the numbers. Florida’s housing market is in recovery
pipeline is having a dampening
for three reasons. The first is probably the least important.
CONTINUED ON PAGE 4
3 Florida’s Bottom Line
FLORIDA’S
JOBLESS RATE
DROPS TO LOWEST
SINCE EARLY 2009
South Florida
Business Journal
JUNE
6/07/2012
SOUTH FLORIDA
REAL ESTATE
LEADING THE
REBOUND
THIS YEAR
The Miami Herald
6/18/2012
HOMEBUILDER
CONFIDENCE IN
U.S. CLIMBS TO
FIVE-YEAR HIGH
Bloomberg
JULY
7/3/2012
MANUFACTURING
SECTOR
CONTRACTS FOR
FIRST TIME
SINCE 2009
CNN Money
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
FLORIDA CLOSED SALES AND EMPLOYMENT
8,800
CLOSED
SALES
20
8,600
8,400
15
8,200
10
8,000
EMPLOYMENT
5
0
7,800
Employment (Thousands)
As with any forecast, there are dangers. Right now, financing is
a hurdle for most households. Mortgage money is simply not
available to anyone without platinum credit and a large down
payment. We know investment money will dry up, so increasing
the flow of finance to owner occupants is crucial in maintaining
the housing recovery. Dealing with the nation’s fiscal cliff is
another troublesome area since higher taxes and deep spending
cuts could short circuit Florida’s housing recovery. These are areas
to watch, but barring much in the way of bad news, we should see
another two years of housing growth.
25
Closed Sales (Thousands)
effect on appreciation. Some forecasters believe that prices will
never increase again in Florida real estate. Others believe that the
market is bouncing back and we will see 10 percent appreciation
in 2013. Neither is correct, but they do set the limits on what can
happen. I think prices will rise in 2013 and 2014 and 5 percent
seems like a good number to me.
7,600
Jan
2010
Jul
2010
Jan
2011
Jul
2011
Jan
2012
Jul
2012
LEARN MORE ABOUT FLORIDA REALTORS AT WWW.FLORIDAREALTORS.ORG
FLORIDA’S FINANCIAL OUTLOOK
By Ben Watkins
Ben Watkins is the Director of
Bond Finance for Florida, which
issues bonds for public agencies
and serves as an authority on
financing issues for the state.
As federal policymakers
confront the January 2013
fiscal cliff, they are faced with
implementing a plan that
cuts discretionary spending
and raises taxes to reduce the
deficit. Florida tackled many
of the same fiscal issues at the
start of the Great Recession and
has positioned itself to move
forward on sound fiscal footing.
As noted in the Fall 2012
Florida’s Bottom Line
newsletter, Florida’s financial
outlook is improving for the
first time since 2006. In fiscal
year 2012, prudent fiscal and
debt management was noted as
a credit strength by the rating
agencies in affirming the state’s
general obligation ratings of
AAA, AAA and Aa1 by Standard and Poor’s (“S&P”), Fitch Ratings
(“Fitch”), and Moody’s Investors Service (“Moody’s”), respectively.
Other strengths include strong reserves and significant progress in
restoring structural budget balance.
Unlike the U.S. government, which is rated AA+, AAA and Aaa
with each rating carrying a negative outlook by S&P, Fitch and
Moody’s, respectively, Florida is constitutionally required to
adopt a balanced budget each fiscal year. Since 2008, Florida has
eliminated $4 billion from the budget (5.4%) to ensure the cost
of living for Floridians remains affordable without tax increases.
Positively, the fiscal discipline employed by state leaders through
the Great Recession is expected to result in a budget surplus in the
current fiscal year. Additionally, the state lowered its debt burden
by $2.0 billion (7.1%) since the end of fiscal year 2010. Conversely,
since 2008 the federal government has increased spending (26%),
driving the national debt to historic highs, and the federal budget
is expected to end federal fiscal year 2013 with a $901 billion
deficit (about 24% of the federal budget).
The state has preserved its fiscal strength and core governmental
functions through an extraordinarily difficult period, despite
remaining challenges including continued weakness in the
housing market and ongoing efforts to re-employ Floridians to
pre-recession levels. Floridians should gain comfort in knowing
that the state’s financial position and operations are stabilizing as
the economic recovery continues.
LEARN MORE ABOUT THE DIVISION OF BOND FINANCE AT WWW.SBAFLA.COM/BOND
4 Florida’s Bottom Line
7/19/2012
FLORIDA REALTORS
CONFIDENT IN
RISING HOUSE
PRICES, HOME
SALES
Housingwire
AUGUST
8/7/2012
GAS PRICES
CLIMB 30 CENTS
A GALLON
CNN Money
8/27/2012
CHINA TRADE
DEFICIT COSTS
FLORIDA
106,100 JOBS
Orlando Business Journal
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
LEADING STUDENTS TOWARDS SUCCESS
IN COLLEGE OR A CAREER
By Governor Rick Scott
SEPTEMBER
9/4/2012
Rick Scott is the 45th Governor of the great State of Florida.
As I travel the state, families tell me they have three
priorities: they a want a job, they want their children to
receive a quality education and they want to keep the
cost of living low.
U.S. DEBT
NOW EXCEEDS
$16 TRILLION
WSJ
As I work to grow jobs and opportunities through
keeping taxes low, supporting Florida businesses and
reducing burdensome regulations, we need to make sure
that our students can get a great education and can live
their dreams right here in Florida.
9/5/2012
CFO ATWATER
HOSTS TAMPA
FORUM ON
SMALL BUSINESS
LEADERSHIP
Tampa Bay Business Journal
Regardless of where one starts, what family one is born
into, or what zip code one’s from – a great education is
critical to pursuing the American Dream.
When I was a child I lived in public housing, my father
was a truck driver and my family moved many times
because my parents struggled financially. At the age of
seven, I got my first part-time job selling TV Guides
door-to-door because I wanted to help my family. We
had our financial struggles – like many families – but
there were three constants in my life: my Mom, church
and school.
Governor Rick Scott
I worked through high school, one year of junior college, and
then enlisted in the US Navy. After the Navy, I worked through
college, and eventually law school. Every step along my path was
made possible by an achievement in education. No one guaranteed
it for me. I had to work for it. But, there is no doubt that my
accomplishments were only possible because of my education.
If Florida is to grow jobs and opportunities for future generations,
we must provide every child with access to a quality education.
That’s why to grow jobs, I’m committed to working with the
Legislature this session to support teachers, so future generations
can go on to college or a career. During the upcoming legislative
session, we are working to make sure all of Florida’s students are
ready to compete and succeed in the 21st century global economy
with the College and Career FIRST agenda.
Last year, we invested a billion dollars more in K-12 education
funding and I am committed to protecting current education
funding levels in this year’s budget, and also working to increase
our investment in education as our economy grows to support
further investments. Any investment we make in education,
however, must be focused
on results for students
and teachers. We need to be
investing our resources and our
energies in policies that work.
OCTOBER
10/11/2012
That is why I created the
College and Career FIRST
agenda. The three goals in this
agenda are focused around
producing better results
for teachers and students.
Everything we do must drive
student success as they go onto
college or a career.
FLORIDA LEADS
NATION IN
FORECLOSURES
Orlando Sentinel
The first goal in College
and Career FIRST is to hold
accountability in transition.
Florida will not create new
testing requirements that do
not support the new Common
Core State Standards. We
should not test students for
FLORIDA ATTRACTS
LESS VENTURE
CAPITAL IN THIRD
QUARTER
Tampa Bay Business Journal
CONTINUED ON PAGE 6
5 Florida’s Bottom Line
10/25/2012
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
the sake of testing. Just like in
business, measurement should
be focused on results – and the
new Common Core Standards
we are implementing will
do just that. It is imperative
that we give teachers time to
transition to these the Common
Core Standards and to achieve
that, we will not make any new
testing requirements that do
not support these standards.
Getting this transition right
is critical and is the best
mechanism we have to ensure
our kids are well prepared for
college and careers.
The second goal of the agenda
is to support our teachers.
Teachers are the lifeblood of
our classrooms and they help
students obtain the skills and
talents they will need to get a
job, build a family and live their
version of the American Dream.
Our $2 million state investment
will allow districts to partner
with businesses and education
foundations to compete for
funds they can tailor to support
teachers. We will also give every
teacher a debit card, supported
by state, district, and hopefully
private sector funds to purchase
supplies for their classroom
without spending their personal
money, like they do today.
Our third goal in the “College
and Career First” agenda
is to increase flexibility in
education by eliminating
unnecessary regulations.
Teachers and superintendents
tell us they waste valuable
time on unnecessary rules and
outdated regulations that could
be better spent on helping
students in the classroom. We
will eliminate many regulations
recommended to us by a panel
of seven superintendents to
streamline the work of
Florida educators. As we
move toward more digital
materials in the classroom,
we will also work to change
the law this year to allow all
districts maximum flexibility
in purchasing instructional
materials. We will also
remove enrollment caps
on charter schools and
pursue legislation to allow
school districts that already
have charter schools the
ability to open district charter
innovation schools.
There is nothing more
important to Florida families
than having the ability to get a
job and a quality education. I
am committed to ensuring that
every student has access to a
quality education that ensures
success in college or a career.
LEARN MORE ABOUT GOVERNOR SCOTT’S COLLEGE
AND CAREER FIRST AGENDA AT: WWW.FLGOV.COM
CREATING OPPORTUNITIES FOR FLORIDA
FAMILIES: UPDATE ON FLORIDA’S
ECONOMIC DEVELOPMENT EFFORTS
NOVEMBER
11/7/2012
STOCKS PLUNGE:
DOW’S WORST DAY
OF THE YEAR
CNN Money
11/22/12
HOLIDAY HIRING
PEPS UP A
SLUGGISH JOB
MARKET
Miami Herald
11/29/12
FLORIDA METROS
RECORD SOME
OF THE BIGGEST
UNEMPLOYMENT
DROPS
NATIONWIDE
Tampa Bay Times
By Gray Swoope
Gray Swoope is Florida’s Secretary of Commerce and serves as the
President and CEO of Enterprise Florida
As I prepared to deliver Enterprise Florida’s end-of-year report
to the Cabinet just over a month ago, I thought of two things:
First, economic development is a team sport. While development
professionals may lead the charge to bring new or expanded
business to our state, there are many who support their efforts and
make our successes possible. Led by our chairman, Governor Scott,
and guided by some of the sharpest business minds in the state,
including CFO Atwater, we’re showing everyone why Florida is the
best state in the nation to do business.
Second, our state is headed in a very positive direction. As I
shared with the Cabinet, compared to calendar year 2011, last
year we saw a 23 percent increase in established projects, a 30.4
percent increase in new jobs created and a 32 percent increase in
capital investment.
UNEMPLOYMENT RATE
12.0%
11.0%
FLORIDA
10.0%
9.0%
UNITED STATES
8.0%
7.0%
6.0%
5.0%
Jan-11
CONTINUED ON PAGE 8
6 Florida’s Bottom Line
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Source: U.S. Bureau of Labor Statistics
CLICK GRAPHS TO SEE SOURCE DATA
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
FLORIDA’S ECONOMY
FINISHED 2012 WITH
A FLOURISH
2.0%
By Rick Harper, Ph.D.
Dr. Rick Harper directs the
Office of Economic Development
and Engagement at UWF and
currently serves as Senior Policy
Advisor on Economic Development
to the Florida Senate.
Florida’s economy is set to
finish 2012 with a flourish,
registering job growth in
November of 24,500, or .3
percent, over the previous
month. This month-over-month
performance ranked second
among the ten largest states
and is a pleasant change for
an economy that lost a greater
share of its jobs during the
Great Recession than any other
state except Nevada. Looking
forward, 2013 holds challenges
for all states, and there are
some that are of particular
importance to Florida.
On the bright side nationally,
continued discovery and
development of energy
resources, particularly natural
gas, points the way towards
lower and more stable prices,
greater employment and less
reliance on foreign sources
of supply. Further, many real
estate markets, including some
in Florida, have begun a climb
away from the price bottoms
of the last several years and
are poised to resume their role
as a contributor to economic
growth. Downside risks include
slowing worldwide growth
rates during a period of fiscal
austerity for governments
and slower growth in aftertax income for households.
An accelerating pace of
technological change combined
POPULATION GROWTH
2.5%
Florida
1.5%
with an increasing cost of
healthcare and other employee
benefits mean that business
owners increasingly look to
technology and outsourcing
solutions, rather than hiring,
as the most profitable way
to bring their products and
services to market.
Florida’s special challenges
center on inbound migration,
the housing market, job
growth, and sources of
household income, and they are
interrelated. Our opportunities
are in our exports to the rest
of the nation and to the world,
and in a construction sector
has finally stopped shrinking.
But the job growth required to
restore Florida’s labor market
to its prerecession levels is
nontrivial. The Atlanta Fed,
in its “Assuage Gauge” for
November 2012, notes that
14 of 20 Florida metro areas
they examined are still more
than 9 percent below their
pre-recession employment
peaks. In that report, Miami
comes in highest of the Florida
metros areas, ranking 25th in
job market recovery out of the
65 areas examined across the
Atlanta Fed region.
This should not be surprising.
Florida population grew at rates
substantially above the national
average over many decades
prior to the recession. Faster
population growth required
a larger construction sector
than in slow growth areas,
and when the housing bubble
burst and the financial sector
imploded, Florida was more
1.0%
United States
0.5%
0.0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: U.S. Census Bureau
vulnerable than other states.
The fact that our housing
inventory rose to meet a large
demand that never materialized
meant that our prices had
to fall dramatically. That in
turn penalized a financial
sector disproportionately
concentrated on real estate
development lending. Our
judicial foreclosure process
lengthens the time properties
spend in exiting the foreclosure
pipeline. Further, many of
the financial assets that
our relatively large retiree
population depends upon have
been penalized by the Fed’s
ongoing low interest rate policy.
But as the job market recovers
nationally and regionally and
the foreclosure pipeline clears,
stronger economic growth
will resume in Florida. New
families will come to Florida,
whether to retire or to seek
economic opportunity. Safe
streets, good schools, a beautiful
environment, and an affordable
cost of living are what many
of them will be looking for.
Protecting and improving these
amenities will make Florida
an attractive destination for
decades to come.
LEARN MORE ABOUT DR. HARPER’S WORK AT WWW.UWF.EDU/OEDE/
7 Florida’s Bottom Line
DECEMBER
12/10/2012
MORE PEOPLE
ARE MOVING, AND
FLORIDA IS A TOP
DESTINATION
Herald-Tribune
12/26/2012
SOUTH FLORIDA
TOURISM POISED
FOR RECORD
IN 2013
SunSentinel
12/27/2012
FLORIDA
RETAILERS HAVE
GOOD, BUT NOT
RECORD-BREAKING
YEAR
SunSentinel
JEF F AT WAT ER | FLOR I DA’ S C HI E F F I NANC I AL O F F I C E R
Creating Opportunities for Florida Families (Continued from page 6)
Since Governor Scott took office just two years ago, we have
seen more than 202,000 private sector jobs added, and our state
continues to lead the nation in the largest drop in unemployment
rate since December 2010 at 2.4 percent (seasonally adjusted).
Florida has experienced more than 24 consecutive months of
positive annual job growth.
To continue this success we must remain competitive in the
marketplace by winning as many new business development
projects as possible. Currently, we have more than 320 active
projects in a wide array of sectors, including aviation/aerospace,
cleantech, defense/homeland security, information technology,
and life sciences. Every day our team works to find the right match
between companies looking to move or those making the choice to
expand here, and a region of Florida that will meet their needs. We
secured 160 projects in 2012, including:
•Digital Risk – Orlando/Statewide
•Risk and compliance management for financial services
•1,000 new jobs; $3 million capital investment
•Navy Federal Credit Union – Pensacola
•World’s largest credit union
•700 new jobs; $6 million capital investment
•Bi-Lo/Winn Dixie – Jacksonville
•Headquarters for one of the largest supermarket chains in the country
•100 new jobs, 891 retained; $81 million capital investment
FLORIDA FAST FACTS
2009
2010
2011
Population
(millions)
18.5
18.8
19
Gross State
Product
(billions)
$726
$736
$754
Visitors
(millions)
80.9
82.3
86.5
Per Capita
Personal Income
$37,382
$38,210
$39,563
Employment
(annual, millions)
8.13
8.1
8.28
Median Home Price
$142,500
$135,900
$131,700
Venture Capital
Investment
(millions)
$335
$225
$287
•Univision Networks – Miami
•New 24 hour news network with ABC
•346 new jobs; $274 million capital investment
For even more metrics on
Florida’s economy, visit:
•Cheney Brothers, Inc. – Punta Gorda
•Food service company building new distribution center
•380 new jobs, $21 million capital investment
•Accuform Signs – Brooksville
•Florida sign manufacturing for nearly 30 years
•271 new jobs; $15 million capital investment
We must also take advantage of opportunities in the facilitated
markets – trade, tourism and entrepreneurship. Just last month
Enterprise Florida led a very successful trade mission to Colombia.
More than 250 appointments were held and attendees reported
nearly $40 million in actual and anticipated export sales. In total
last year, we assisted Florida companies in generating $585.5
million in export sales.
Every day our team works to create opportunities for Florida
families that need or want more rewarding jobs. We will continue
to share the benefits our state has to offer – talented workforce,
dynamic business base, natural resources, access to capital,
tremendous infrastructure – and work to translate that into
employment growth and continued positive economic impact into
our state.
LEARN MORE ABOUT ENTERPRISE FLORIDA
AT WWW.EFLORIDA.COM
PARTNERS
Florida’s Bottom Line is produced by the Florida Department of Financial
Services in association with the Bureau of Economics and Business Research
(BEBR) at the University of Florida and The Office of Economic and
Demographic Research (EDR), a research arm of the Florida Legislature.
BEBR is an applied research center in the
Warrington College of Business Administration. The
mission of BEBR is to collect, analyze, and generate
economic and demographic data on Florida and
its local areas; to conduct research that will inform
public policy and business decision making; and to
distribute the data and research findings throughout the state and the nation. To
see the research and analysis that BEBR offers, please visit www.bebr.ufl.edu.
EDR is a research arm of the Florida Legislature
principally concerned with forecasting economic and
social trends that affect policy making, revenues, and
appropriations. EDR provides objective information to
committee staffs and members of the legislature in support
of the policy making process. To see the research and
analysis that EDR offers, please visit www.edr.state.fl.us.
8 Florida’s Bottom Line