Consumer confidence among Floridians increased three points from July to August to an overall index of 70, according to a just released survey by the University of Florida. This said, Chris McCarthy, the survey director believes that a new approach is needed, if Florida’s economy is to grow as it has in the past.
Three of the five components used in the consumer confidence index rose, one stayed the same, and one fell. These were:
* Perceptions of personal finances a year from now rose five points to 84.
* Perceptions of U.S. economic conditions over the next year rose ten points to 73
* Perceptions of U.S. economic conditions over the next five years rose eight points to 80.
* Perceptions of personal finances now compared to a year ago was unchanged at 43, only four points above its all time low of 39
* Perceptions as to whether it is a good time to buy big ticket items fell five points to 72, the only component to fall.
“We had anticipated an increase in consumer confidence in August based on what appeared to be an unjustifiably large drop in July,” said Chris McCarty, the Survey Director, in a news release. “While the economic environment is by no means bright, the decline in July seemed unsustainable given the lack of any very bad economic news and some encouraging signs in Florida’s housing market and the stock market. We are not out of this recession yet, particularly here in Florida, but things are not nearly as bad as they were a year ago.”
Housing sales have been picked up both in Florida and nationally. Housing prices continue to suggest a bottom has been reached. The latest report from the Florida Association of Realtors shows median prices for existing single family flat from last month and still up for the year. A recent release from the Mortgage Bankers Association showed that 23 percent of Florida mortgages in the second quarter of 2009 were either in foreclosure or late on payments. If this trend continues this could put downward pressure on home prices. The hardest hit area of Florida is the Southwest Coast, including Ft. Myers, Sarasota and Punta Gorda. All of these areas are disproportionately dependent on retirees. A recent Bureau of Economic and Business Research (BEBR) release showed Florida’s population declining for the first time since 1946. A big part of that is likely a slowing of the retiree market.
Employment remains an enormous problem for Florida. The latest release from the Agency for Workforce Innovation shows Florida’s unemployment in July unchanged from the previous month at 10.7. This number, which does not take into account those who have given up looking for work, is likely to increase through the end of 2009 and into 2010.
“We expect consumer confidence to stay mired in the upper 60s and low 70s as the recovery develops,” said McCarty. Unfortunately, while Florida housing is showing signs of improving, the overall state economy in the long run will likely lag other parts of the country given the prospects for a turnaround in employment. Real estate sales, construction spending and tourism have all been major sectors in the Florida economy over the past two decades. As the country moves into recovery over the next year, these sectors of the Florida economy will certainly stabilize, but will not grow as they had. Florida needs a new approach.”
