ORLANDO, Oct. 3, 2023 — While the timing of a national economic slowdown seems to keep moving, Florida’s economy is expected to weather it well—and even grow—says economist Sean Snaith.
In his latest quarterly Florida forecast released this morning, Snaith says the impact of a slowdown won’t stick to Florida as it has in past recessions. “Florida’s economy today is more like Teflon. A lot of the effects of a national slowdown will just slide right off,” he said.
While the housing collapse in 2008-09 and the pandemic hit Florida’s economy particularly hard, the next slowdown or recession won’t do nearly as much damage because of the state’s ever-growing population and strong labor market, Snaith says.
“A recession is never good news,” Snaith continued. “But compared to what our state went through during the past two recessions, any pain we endure will be far less severe and won’t linger as long. And Florida’s economy won’t experience the worst from a national economic slowdown.”
In Florida—and the rest of the country—Snaith predicts a slowing by the end of 2023 and through the start of 2024, but it’s not clear if this slowdown will rise to the level of a recession.
Housing Struggles Continue
The flip side of Florida’s growing population and strong economic growth means continued shortages in the state’s housing market, Snaith says.
“We’ve had the fastest-growing population growth rate in the country feeding the demand for housing, and it’s running headlong into a depleted supply,” he said. “This is not a pathway to affordability.”
Snaith does not forecast any drastic correction during the coming slowdown or recession and has seen prices stabilize more in recent months. But that doesn’t mean housing prices will come down anytime soon for would-be buyers.
“The demand doesn’t seem to be abating, and it takes time for supply to catch up,” he said. “That will continue to be an issue for the foreseeable future.”
Additional highlights from Snaith’s 4-year Florida and metro economic forecast include:
- From 2023-26, Florida’s economy, as measured by Real Gross State Product, will expand at an average annual rate of 1.5%. Real Gross State Product will decelerate during the economic slowdown as growth will slow to 0.5% in 2024 and 0.8% in 2025, then accelerate to reach 1.7% by 2026.
- Labor force growth in Florida will average 1.3% from 2023-26. After growing 3.9% in 2022, Florida’s labor force growth will fall to 2.3% in 2023, and a slowed economy labor force growth will average 1.0% during 2024-26. Florida’s unemployment rate fell to 4.7% in 2021, and then to 2.9% in 2022. The slowing economy will push the rate up to 3.1% in 2023, to 4.4% in 2024, and to 5% in 2025 and 2026.
- Housing starts have felt the bitter chill of higher mortgage rates. Total starts were 192,213 in 2022—before higher mortgage rates and worries of a slowing economy result in a deceleration in starts to 183,134 in 2023, 158,716 in 2024, 154,424 in 2025, and 150,981 in 2026.
- Real Personal Income Growth will average 2.8% during 2023-26. Following an inflation-driven contraction in 2022, growth will hit 3% in 2026. Florida’s average growth will be 0.8 percentage points higher than the national rate over the 2023-26 4-year span.
Sean Snaith, Ph.D., is the director of UCF’s Institute for Economic Forecasting and a nationally recognized economist in the field of economics, forecasting, analysis and market sizing. He has been recognized by Bloomberg News as one of the country’s most accurate economic forecasters and has served as a consultant for both local governments and multi-national corporations. Before joining UCF’s College of Business, Snaith held faculty positions at Pennsylvania State University, American University in Cairo, the University of North Dakota and the University of the Pacific. Now heading UCF’s Institute for Economic Forecasting, Snaith and the institute strive to provide complete, accurate and timely national, state and regional forecasts and economic analyses as valuable resources to the public and private sectors for informed decision making. More of Snaith’s work is available at http://iec.ucf.edu or you can follow him @SeanSnaith.
