Tuesday, June 30th, 2009 at 9:00am

Florida’s Economic Outlook Tough

Posted by admin

The Florida economy by all accounts has still not found the bottom, and a June 11, 2009 Wachovia Regional Economic commentary posted on Bloomberg confirms the State is still struggling for stability.  The report talks about extraordinary weakness in the United States economy with the fourth quarter of 2009 and the first quarter of 2008 being the worst of it.  Considering the dramatic 12% drop in GDP and the 2.5% drop in output, the Wachovia economic group predicts this will be the longest and worse recession since the 1930’s.

Florida’s job losses are at 720,000 and they believe unemployment will top out around 11%.  Unemployment in Lake County is currently at 10.8%, and this does not include all the self-employed subcontractors and entrepreneurs who have been bankrupted by this economic decline.  It is estimated that in the last year 101,000 jobs were lost just in the construction industry.  The dog days of summer will bring more unemployment pain.

Housing, which has been a principle driving factor for the State, is dismal as single family permits are down nearly 90%.  David Sumner from the SMI has been charting Florida permits since January of 2005, and his report (see attached) confirms the Wachovia housing report and indicates things may be getting worse.  In May of 2009 single family and multifamily permits were 2,301 compared to 19,923 in May of 2006, down a whopping 88% from just three years ago.  Even more troubling is that the average number of permits for the first four months of this year was 2,857 per month and May’s results are 19% below the monthly average.  Home values in many markets are down 45%-60% and sales are half of last year.  These numbers make for terrible housing equations for the State of Florida.

Foreclosures are at record levels and the bad unemployment picture continues to worsen housing.  Many economists contend housing led Florida into this economic mess and it will take improvement in housing to get the State heading into positive territory.   The meltdown in housing has directly affected other areas like banking, finance, and retail, and the job losses are beginning to mount in those sectors.

The most significant number in the report was how much growth has slowed in the State.  In 2008, the estimated population growth was 128,800, which was the smallest yearly gain since 1949.  Even more disappointing is the demographics of young families and prime aged workers; the State has experienced a loss of population.  This portends the largest increase was in older citizens which would require higher services and more state welfare.

The Florida tourism industry is seeing hard times as the number of visitors to the State has declined for the first time in seven years.  Higher fuel cost, the bad economy, and other factors like the swine flu have not bode well for the tourism industry, and the State has seen significant lost revenues in this area.  The Conference Board’s latest survey of consumer confidence shows fewer households are planning a vacation within the United States during the next six months than any other time since the survey began back in 1978.

Citizens for Better Government, L.L.C. has been warning Lake County politicians that there is an economic tsunami approaching and now is the time to prepare for it by axing projects and reducing the size of government.  Government revenues lag behind current economic conditions, so we are concerned many are not aware of what is going on in the real economy.  The decreasing property values, sales tax collections, and huge unemployment will paralyze the State and County economically to a point that essential services will be reduced to many citizens and businesses.  Waiting until the system is bankrupt is wrong and hiding behind a one-time Obama stimulus shot is cowardly.

Real political leadership would come forward and tell the people that now is the time to reduce services, cut projects, and encourage growth because real leadership will not waste their time trying to hide the truth.  Failure to act appropriately now will result in budget cuts that will put taxpayers in peril.  If things are going to change, you must contact your Commissioners today and ask them to take action to preserve Lake County’s economic future by cutting expenses and developing a survival plan.  Leave us your comments at www.lakecountygov.info  on what Lake County must do to guarantee its economic future.

Leave a Reply (No names necessary. If you put your name it will be published.)

© 2009 Right Side of the Lake: Lake County Florida's local government news source from Citizens for Better Government LLC.

The Right Side of the Lake