U.S., Florida & Orange County Economic Update 2015 Economic Summit Orlando, FL December 15 th, 2015
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% (104 94 without proposals) Fiscal Policy Monetary Policy When will interest rate hikes commence? Labor market/wage growth How will financial markets react?
U.S. Forecast 145.0 Total Nonfarm Payroll Employment (Millions) 140.0 135.0 130.0 125.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Total Nonfarm Employment 14 15 16 17
U.S. Forecast Payroll jobs to reach potential
Missing Workers U.S. Forecast
U.S. Forecast 10.0 Civilian Unemployment Rate (%) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 00 01 02 03 04 05 06 07 08 09 10 11 12 Unemployment Rate 13 14 15 16 17
U.S. Forecast Unemployment if missing workers were found
U.S. Economic Outlook 2014 Q2 2014 Q3 2014 Q4 2014 2015 2016 2017 GDP % Change, Annual Rate Consumer Price Index % Change, Annual Rate 4.6 5.0 2.4 2.3 2.5 2.7 2.9 3.0 1.1-1.2 1.6 0.4 1.9 2.2 Consumer Sentiment 82.8 83.0 89.8 84.1 90.4 89.5 88.9 Consumption % Change, Annual Rate 2.5 2.2 2.6 2.4 2.9 3.0 2.8
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%
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?
U.S. Forecast 30-Year Mortgage Rates and Housing Starts 9.0 8.0 7.0 6.0 5.0 4.0 3.0 00 01 (Mortgage rates - Left axis, %) 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 30-Year Fixed Mortgage Rate Housing Starts - Millions 17 2.5 2.0 1.5 1.0 0.5 0.0
Florida Housing Market Housing market recovery continues Now single-digit price appreciation Still high level of investor activity Housing finance still an issue
Florida Housing Market
Florida Housing Market
Florida Housing Market November 2014 November 2013 Percent change Closed Sales 17,772 16,061 10.7% Median Sale Price $176,000 $170,000 3.5% Median Days on Market 54 49 10.2% Inventory (Months Supply) 5.3 5.6-4.8%
Florida Housing Market Investors are still active in Florida residential real estate Still high share of cash transactions Private equity, hedge funds international buyers
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 $129,000 11.5% January-2013 $1,289 $145,000 10.7% January-2014 $1,395 $163,000 10.3% November- 2014 $1,420 $176,000 8.1%
Housing Market Cash Sales November 2014 November 2013 Cash as % of November 2014 Sales Florida 6,961 7,048 39.2% Miami 1,292 1,393 41.9% Tampa 1,224 1,098 39.1% Jacksonville 439 428 32.4% Orlando 723 731 33.0%
Florida Forecast
Florida Forecast 300.0 Florida Housing Starts (thousands) 9% 250.0 8% 200.0 7% 150.0 6% 100.0 5% 50.0 4% 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Total Private Housing Starts 30 year Mortgage Rates 15 16 17 3%
Florida Forecast 21000.0 Florida Population (Thousands) 20000.0 19000.0 18000.0 17000.0 16000.0 15000.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 00 Florida & U.S. Unemployment Rate (%) 01 02 03 04 05 06 07 08 09 10 11 12 13 14 FL Unemployment Rate U.S. Unemployment Rate 15 16 17
Florida Forecast 10% Florida Real Gross State Product (% change year ago) 5% 0% -5% -10% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast 8400.0 8200.0 8000.0 7800.0 7600.0 7400.0 7200.0 7000.0 6800.0 00 01 02 03 Florida Employment (Thousands) 04 05 06 07 08 09 10 11 12 13 14 Wage & Salary Employment 15 16 17
Florida Forecast 700.0 Florida Construction Employment (Thousands) 600.0 500.0 400.0 300.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast 1300.0 Florida Professional & Business Services Employment (Thousands) 1200.0 1100.0 1000.0 900.0 800.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast 1150.0 Florida Leisure & Hospitality Employment (Thousands) 1100.0 1050.0 1000.0 950.0 900.0 850.0 800.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Education-Health Services 1.9 Information 1.2 Financial 0.9 Manufacturing 0.6 State & Local Government 0.5 Federal Government -0.6 2014-2017 Averages; Q4 2014 Forecast Sector Florida % Average Annual Growth Construction 9.2 Professional & Business Services 3.5 Trade, Transportation & Utilities 3.3 Leisure & Hospitality 2.0
2014-2017 Averages; Region Q4 2014 Forecast Population Growth Average % Chg Rank Florida 1.4 --- Deltona 1.2 7 Gainesville 0.8 11 Jacksonville 1.4 4 Lakeland 1.0 9 Miami 1.2 5 Naples 2.4 1 Ocala 1.6 3 Orlando 2.1 2 Palm Bay 1.1 8 Pensacola 0.6 12 Tallahassee 0.8 10 Tampa 1.2 6
2014-2017 Averages; Q4 2014 Forecast Region Employment Growth Average % Chg Rank Florida 2.2 --- Deltona 1.7 7 Gainesville 1.1 12 Jacksonville 2.3 3 Lakeland 1.5 9 Miami 2.1 4 Naples 2.9 1 Ocala 1.5 8 Orlando 2.7 2 Palm Bay 1.7 6 Pensacola 1.3 11 Tallahassee 1.4 10 Tampa 1.8 5
2014-2017 Averages; Q4 2014 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
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Thank you Sean M. Snaith, Ph.D. Director Institute for Economic Competitiveness (407) 823-1453 Sean@SeanSnaith.com WWW.IEC.UCF.EDU www.facebook.com/seansnaith Twitter: @seansnaith