Florida economy blows past hurricanes
A few short months ago, the outlook for Florida's job seekers looked every bit as black as the dark clouds blown in by last year's unprecedented four major hurricanes.
The storms caused billions of dollars of damage to the state's staple industries of tourism and agriculture and put more than 100,000 out of work - spiking an unemployment rate that had been steadily falling since Sept. 11.
But now, after a remarkable economic recovery that has stunned observers by its speed and intensity, the blue skies are back over the Sunshine State. Business is experiencing its biggest boom in at least a quarter century, driven by a state economy that is equipped to rebound from disaster - and that even before the hurricanes had the right combination of elements to flourish.
Consider that Florida:
• Leads the nation in jobs growth.
• Is attracting tourists in record numbers.
• Has one of the hottest real estate construction and sales markets in the country.
• Has just handed its governor a $2.2 billion windfall to spend on tax cuts and services.
"It's just unbelievable," says Frank Ryll, president of the Florida Chamber of Commerce. "Tell me where else in the country this is happening."
Indeed, Florida enjoys a unique set of economic factors. The population flow into the state has been largely undeterred by the hurricanes, as workers, baby boomers, and others bank on the region's warm climate and reasonable cost of living. And this burgeoning population has plenty of economic sectors to buoy it: Everything from tourism to agriculture to high tech is booming in the Florida, as state incentives and relatively low wages attract business to the region.
Of course, other parts of the United States have also experienced devastation from natural disasters, and then a boost from recovery efforts. But the phenomenon taking place in Florida is on a scale larger than most.
Perhaps the most telling statistic is one about employment: Florida has created more than a quarter of a million new jobs since this time last year, a 3.5 percent expansion.
And they're not all roofers brought in to repair hurricane damage, says Warren May, spokesman for the state-run Agency for Workforce Innovation.
"Professional and business services such as banking and insurance have been leading the jobs growth," he says. "Healthcare services are right up there because of Florida's large senior population, and there has been a remarkable turnaround in manufacturing."
The figures bear him out. Florida's unemployment rate in March was running at 4.4 percent, almost one full point behind the national average of 5.2. Of the 262,000 new posts created, more than 110,000 are in professional, education, and health services.
There are also 31,000 new jobs in the construction industry, proof that the storms did not put off people moving to Florida. It is estimated that between 800 and 1,000 new residents arrive in the state every day.
The traditional markets of condo and single-family home sales in the heavily populated tri-county area of south Florida have remained strong. But there is also huge demand for land in hurricane-ravaged central Florida. Land prices are soaring as developers seek new opportunities for housing, and of course these new communities all require schools, shopping malls, and hospitals.
In addition, high-tech industries are expanding into Florida and attracting educated and higher-earning employees. The Scripps Research Institute is to build a biotechnology center in Palm Beach County that will create up to 3,000 jobs and give a $1.6 billion boost to Florida's economy over the next 15 years, according to experts.
"All this growth creates jobs, and all the extra spending is good for the local economies and the state," says Stanley Geberer, an analyst with Orlando-based economists Fishkind and Associates. "We've had similar booms before, but the size of this one is far greater because the population is so much larger than 50 or even 10 years ago."
Mr. Ryll says this is probably the most fervent and sustained period of growth he has seen in 25 years as the chamber's president. "Business is doing well, and I see it continuing for some time," he says.
Tourism, meanwhile, continues to be the driving force of Florida's economy. The state's biggest industry feared a significant drop-off in visitor numbers after the storms and launched a multimillion dollar advertising campaign, yet the figures suggest it need not have worried.
In 2004, a record 76.8 million people took a vacation there, a 3 percent increase on 2003, according to Visit Florida, the state's tourism body. They also spent $57 billion.
More good news came in tourism jobs. Almost 913,000 were employed in the industry in 2004, up from 871,000 in 2003.
There are even glimmers of optimism in the $9.1 billion citrus industry, which sustained more than $2 billion damage in the hurricanes. Orange juice sales, declining for a decade, were up 4.2 percent in March compared to the previous year, thanks to an aggressive advertising campaign and a decrease in "low carb" dieting.
Overall, experts agree that Florida has never had it so good. Gov. Jeb Bush would not disagree: His $62 billion budget for 2005-06 has been bolstered by $2.2 billion in unexpected tax revenues. Among the benefits to Florida's residents will be extra spending on roads and schools.
The only clouds on the horizon, experts say, are rising inflation and interest rates.
But David Denslow, a professor of economics at the University of Florida, Gainesville, says any effect would be muted. "If it ends," he says "it will hurt the Florida economy, but it's not going to kill it."