U.S., Florida & Orange County Economic Update Economic Summit. Orlando, FL December 15 th, 2015

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1 U.S., Florida & Orange County Economic Update 2015 Economic Summit Orlando, FL December 15 th, 2015

2 Economic Policy Uncertainty Health Care Reform Employer mandates Impact on labor market Dodd-Frank Financial Regulatory Reform Impact on credit flows & financial sector 37.1% ( without proposals) Fiscal Policy Monetary Policy When will interest rate hikes commence? Labor market/wage growth How will financial markets react?

3 U.S. Forecast Total Nonfarm Payroll Employment (Millions) Total Nonfarm Employment

4 U.S. Forecast Payroll jobs to reach potential

5 Missing Workers U.S. Forecast

6 U.S. Forecast 10.0 Civilian Unemployment Rate (%) Unemployment Rate

7 U.S. Forecast Unemployment if missing workers were found

8 U.S. Economic Outlook 2014 Q Q Q GDP % Change, Annual Rate Consumer Price Index % Change, Annual Rate Consumer Sentiment Consumption % Change, Annual Rate

9 U.S. Forecast The Arithmetic of Higher Oil Prices: Each $1 decrease in the price of a barrel of oil will: Decrease price of gallon of gas 2.5 cents Push consumer gasoline bills down $3 billion Lower the CPI 0.03% Raise real disposable income 0.25%

10 U.S. Forecast The Economics of lower Oil Prices: Each permanent $10 decrease in the price of a barrel of oil will: Raise forecast real GDP growth 0.2% in 1 st year, 0.5% in the 2 nd Raise forecast of payroll employment 110,000 in 1 st year and 390,000 in 2nd Psychic Impact Domestic production impacts?

11 U.S. Forecast 30-Year Mortgage Rates and Housing Starts (Mortgage rates - Left axis, %) Year Fixed Mortgage Rate Housing Starts - Millions

12 Florida Housing Market Housing market recovery continues Now single-digit price appreciation Still high level of investor activity Housing finance still an issue

13 Florida Housing Market

14 Florida Housing Market

15 Florida Housing Market November 2014 November 2013 Percent change Closed Sales 17,772 16, % Median Sale Price $176,000 $170, % Median Days on Market % Inventory (Months Supply) %

16 Florida Housing Market Investors are still active in Florida residential real estate Still high share of cash transactions Private equity, hedge funds international buyers

17 Housing Market Cash Sales Why are investors still active in Florida residential real estate? Median Monthly Rent Median Home Price Annual yield January2012 $1,233 $129, % January-2013 $1,289 $145, % January-2014 $1,395 $163, % November $1,420 $176, %

18 Housing Market Cash Sales November 2014 November 2013 Cash as % of November 2014 Sales Florida 6,961 7, % Miami 1,292 1, % Tampa 1,224 1, % Jacksonville % Orlando %

19 Florida Forecast

20 Florida Forecast Florida Housing Starts (thousands) 9% % % % % % Total Private Housing Starts 30 year Mortgage Rates %

21 Florida Forecast Florida Population (Thousands)

22 Florida Forecast 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 00 Florida & U.S. Unemployment Rate (%) FL Unemployment Rate U.S. Unemployment Rate

23 Florida Forecast 10% Florida Real Gross State Product (% change year ago) 5% 0% -5% -10%

24 Florida Forecast Florida Employment (Thousands) Wage & Salary Employment

25 Florida Forecast Florida Construction Employment (Thousands)

26 Florida Forecast Florida Professional & Business Services Employment (Thousands)

27 Florida Forecast Florida Leisure & Hospitality Employment (Thousands)

28 Education-Health Services 1.9 Information 1.2 Financial 0.9 Manufacturing 0.6 State & Local Government 0.5 Federal Government Averages; Q Forecast Sector Florida % Average Annual Growth Construction 9.2 Professional & Business Services 3.5 Trade, Transportation & Utilities 3.3 Leisure & Hospitality 2.0

29 Averages; Region Q Forecast Population Growth Average % Chg Rank Florida Deltona Gainesville Jacksonville Lakeland Miami Naples Ocala Orlando Palm Bay Pensacola Tallahassee Tampa 1.2 6

30 Averages; Q Forecast Region Employment Growth Average % Chg Rank Florida Deltona Gainesville Jacksonville Lakeland Miami Naples Ocala Orlando Palm Bay Pensacola Tallahassee Tampa 1.8 5

31 Averages; Q Forecast Sector Orlando MSA % Average Annual Growth Construction 8.6 Professional & Business Services 4.1 Leisure & Hospitality 2.9 Trade, Transportation & Utilities 2.4 Education-Health Services 2.2 Information 1.8 Manufacturing 1.2 State & Local Government 1.1 Financial 0.4

32 Orange County Forecast

33 Orange County Forecast

34 Orange County Forecast

35 Orange County Forecast

36 Orange County Forecast

37 Orange County Forecast

38 Orange County Forecast

39 Orange County Forecast

40 Orange County Forecast

41 Orange County Forecast

42 Orange County Forecast

43 Thank you Sean M. Snaith, Ph.D. Director Institute for Economic Competitiveness (407)

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