Florida’s recovery from the worst economic downturn since the 1930s is going to take a little longer than previously expected, but it’s coming, a panel of economists said Monday.
One thing is pretty certain. The 700,000 jobs that Gov.-elect Rick Scott promised when he campaigned for office is likely already in the bag as the economy is slated to add more than 1 million jobs over the next seven years, even by conservative scenarios seen by the Florida Economic Estimating Conference.
“We do expect things to get better in Florida,” said Amy Baker, coordinator for the Legislature’s Office of Economic and Demographic Research. “We do expect to see job growth over the next few years… It’s just not happening as quickly as we projected earlier. ”
In the short term, unemployment is likely to remain in double digits until the second quarter of 2012, a distant benchmark that underscores the depth of a recent recession fueled in large part by a housing bust and continued tight credit that is hampering private recovery efforts.
The panel’s work has been complicated by mixed signals. The state’s jobless rate is expected to bounce around as newly encouraged workers head back to the job hunt faster than the jobs they are seeking. The result is a jobless rate that will hang in the 11-percent range for the next several months, economists said.
A glut of housing will depress prices, but the lower prices are expected to spur sales. But slow sales in other parts of the country will hinder the migration of retirees and empty nesters to the state. The lack of easy credit will hamper the efforts of leveraged investors but provide good deals for those with cash to put down.
“We’re at a difficult position about guessing at the future since things don’t seem to be moving in one direction or another,” said Don Langston, an economist with House.
With housing and credit still tight for the foreseeable future, economists from the governor’s office, the Legislature and the Department of Revenue, refined estimates made earlier this year to reflect a slower rebound than previously thought. In general, the panel pushed back the pace of recovery by a quarter to half a year.
Florida’s malaise will mirror that of the nation’s which is also expected to see sluggish recovery in 2011, according to a survey of economists released Monday by the National Association of Business Economics.
Economists blamed the lackluster recovery on a lag in hiring as companies hold back on inventory replacement, the federal stimulus program winds down and consumers continue to pay down debt.
Such “headwinds” will slow job recovery nationwide with the unemployment rate expected to still be above 9 percent by the end of 2011, making this the weakest post-recession job recovery on record, the panel of economists reported.
“Confidence in the expansion’s durability is intact, but panelists remain concerned about high levels of federal debt, a continuing high level of unemployment, increased business regulation, and rising commodity prices,” NABE President Richard Wobbekind, associate dean of the Leeds School of Business at the University of Colorado, said in a statement.
By Michael Peltier
The News Service of Florida
