A new forecast from UCF economist Sean Snaith – the director of UCF’s Institute for Economic Forecasting – has explored the future financial prospects of the sunshine state, and it seems as though things may be taking off.
Florida’s Economic Outlook
As we move into the winter of 2024, Snaith predicts that Florida’s economy will be soaring at a level that outpaces the national average.
“Jumbo Jet Economy”
Dubbed the “jumbo jet economy,” Snaith claims Florida’s economy will fly high, outperforming the rest of the country with a strong labor market and steady population growth.
Potential Issues Ahead
However, despite this positive outlook, Snaith warns that there are potential issues on the horizon. Record levels of credit card debt, coupled with stubborn inflation rates, cast shadows over an otherwise sunny forecast – hinting at turbulence ahead.
Credit Card Debt Concerns
Florida’s credit card debt has passed $1 trillion, a figure that Snaith explains has been reached due to the cost of living rising faster than wages for the last two years.
Inflation Rates and Economic Shadows
With average interest rates exceeding 20%, many cardholders are making higher minimum monthly payments – especially since the Federal Reserve began raising interest rates.
Consumer Goods Sector at Risk
It’s not great news because it puts the consumer goods sector in jeopardy, especially since Snaith is expecting spending growth to slow down.
Economic Expansion Predictions
Snaith predicts that Florida’s economy, as measured by Real Gross State Product, will expand greatly between 2024 and 2027. He claims that there will be an economic slowdown in 2024 and 2025 as growth slows to 3.3% in 2024, down to 2.2% in 2025, and then accelerates to 2.5% in 2026 before easing again to 2.1% in 2027.
Real Gross State Product Projections
Snaith says Floridians are looking at around 2.5% growth on average each year from 2024 to 2027 – that’s not bad, but it’s not as fast as before.
Job Growth Deceleration Forecast
Snaith predicts that statewide job growth will begin to decelerate due to companies’ employment retention increasing.
Employment Retention Impact
So, while getting a job in Florida has been pretty easy lately, it might get a bit tougher as vacancies run dry.
Working Population Growth Trends
Snaith points to decreasing employment growth across the last few years – 5.7% growth in 2022, 3.4% in 2023 – and forecasts that in 2024, employment will only grow by 2.0% before only increasing by 0.6% in 2027.
Labor Force Predictions
Snaith notes that Florida’s working population has been growing fast – 3.9% in 2022 and 2.7% in 2023. However, he predicts that 2024 will average only 1.2% growth, while 2025-2027 will see a dire 0.9% labor force growth. Fewer new workers entering the job market will slow the economy down.
Unemployment Rate Forecast
The unemployment rate in Florida has been quite low, falling to 2.7% in 2023. But with a predicted slower-growing economy, unemployment may rise, with Snaith predicting it will hit 3.1% in 2024 before increasing to 3.6% in 2025 and 3.8% in 2027.
Industries with Job Growth
Snaith explains that some industries will be doing well and adding jobs between 2024-2027. These include education, healthcare, leisure, hospitality, and construction, with average job growth rates ranging from 1.2% to 1.8%. So, if you’re looking for work, these are good places to start, with a lot of potential for job security.
Challenges in Homebuying
Unfortunately, Snaith predicts that buying a house will get a bit harder because mortgage rates are going up, and houses aren’t being built at a quick enough pace.
A Lack Of New Housing
Snaith assumes that, with an economic slowdown, new housing starts will decrease from 2022’s figure of 193,500 to 157,072 by 2027.
Real Personal Income Growth Expectations
On the income front, real personal income growth is expected to rebound, averaging 3.6% from 2024 to 2027. Despite a brief contraction driven by inflation in 2022, income growth is projected to outpace national averages, offering a glimmer of optimism amid economic uncertainties.
Good News For Floridian’s Wallets
Snaith claims that “Florida’s average growth will be 0.8 percentage points higher than the national rate over the 2024-2027 four-year span.”
Economic Resilience
Overall, while there are some challenges on the horizon, Snaith’s forecast suggests that Florida’s economy will stay strong – even if it’s not growing as fast as before.
Seatbelts Fastened
As Snaith puts it, “Florida should enjoy the ride through these economically friendly skies but with seatbelts fastened – just in case.”
The post – Soaring Growth for Florida’s Economy Expected in 2024 – first appeared on Wealthy Living.
Featured Image Credit: Shutterstock / Jose Luis Stephens.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
