October 2017 VOLUME XI NUMBER 10

Southwest Florida Regional Economic Indicators October 2017 VOLUME XI NUMBER 10 Regional Economic Research Institute Lutgert College Of Business 10501 FGCU Blvd. South Fort Myers, FL 33965 Phone 239-590-7090 www.fgcu.edu/cob/reri

Table of Contents Introduction: Regional and National Background... 4 Airport Passenger Activity... 5 Chart 1: SW Florida International Passenger Activity... 5 Chart 2: Punta Gorda Airport Passenger Activity... 6 Chart 3: Sarasota Airport Passenger Activity... 6 Tourist Tax Revenues... 7 Chart 4: Tourist Tax Revenues for the Coastal Counties... 7 Chart 5: Coastal County Tourist Tax Revenues... 8 Taxable Sales... 8 Chart 6: Taxable Sales for 5 County Region... 9 Chart 7: Taxable Sales for Coastal Counties... 9 Chart 8: Taxable Sales for Inland Counties... 10 Workforce Labor Force, Employment and Unemployment... 10 Chart 9: Lee County Labor Force and Unemployment... 11 Chart 10: Collier County Labor Force and Unemployment... 11 Chart 11: Charlotte County Labor Force and Unemployment... 12 Chart 12: Hendry County Labor Force and Unemployment... 12 Chart 13: Glades County Labor Force and Unemployment... 13 Single-Family Building Permits... 13 Chart 14: Single-Family Building Permits for Lee County... 14 Chart 15: Single-Family Building Permits for Collier County... 14 Chart 16: Single-Family Building Permits for Charlotte County... 15 Existing Single Family Home Sales and Median Prices... 15 Chart 17: Existing Single-Family Home Sales for Lee County... 16 Chart 18: Existing Single-Family Home Sales for Collier County... 16 Chart 19: Existing Single-Family Home Sales for Charlotte County... 17 Consumer Sentiment Index... 17 Chart 20: U.S. Index of Consumer Sentiment... 18 Chart 21: Florida Consumer Sentiment Index... 18 2

Consumer Price Index... 19 Chart 22: CPI Annual Percentage Change... 19 Chart 23: Miami-Fort Lauderdale CPI Component Percentage Change... 20 Appendix: Trends in Regional Population, U.S. GDP, U.S. Unemployment, and Industry Diversification... 20 Chart A1: Coastal Counties Population, 1990 to 2040... 21 Chart A2: Inland Counties Population, 1990 to 2040... 21 Chart A3: Historic and Projected GDP Growth, 2007 to Long Run... 22 Chart A4: Historic and Projected Unemployment, 2007 to Long Run... 23 Chart A5: Industry Diversification Index, 2005 to 2016... 24 Regional Economic Indicators is published monthly by the staff and students of the Regional Economic Research Institute at Florida Gulf Coast University. Dr. Chris Westley, Director, Regional Economic Research Institute Phone: 239-590-7090 Email: cwestley@fgcu.edu Mr. Steven Scheff, Business Analyst, Regional Economic Research Institute Phone: 239-590-7315 Email: sscheff@fgcu.edu Mr. Jim Breitbach, Technical Support, Regional Economic Research Institute Email: jbreitba@fgcu.edu Copyright 2017 FGCU - All rights reserved. 3

Introduction: Regional and National Background For the fourth consecutive month, Southwest Florida exhibited healthy growth in several areas of the regional economy. Positive trends included a 27-percent increase in single-family building permits from August 2016 to August 2017, a 4-percent increase in taxable sales from June 2016 to June 2017, and a 9- percent increase in airport passenger activity from July 2016 to July 2017. The region also saw its seasonally-adjusted regional unemployment rate fall to 4.0 percent in August 2017 from 4.1 percent in July 2017, and from 4.7 percent in August 2016. The unemployment rate for the region continues to compare favorably to the national economy (4.4 percent). Other highlights from this report include: Lee County reported a 2-percent increase in existing single-family home sales between August 2016 and August 2017, while Charlotte County fractionally decreased over the same time span. Both Collier and Charlotte County experienced increases in tourist tax revenues from July 2016 to July 2017, rising 7 percent and 20 percent respectively. The FGCU Industry Diversification Index for Southwest Florida, released on September 25th, was 8.36, ranking the region 11th out of 24 workforce regions in the state. The RERI staff extends its sincere thanks and appreciation to the dedicated individuals and organizations who contribute to this report. These include FGCU student workers affiliated with the RERI, the Southwest Florida Regional Planning Council, the Economic Development Organizations of Charlotte, Collier, and Lee counties, the Convention and Visitors Bureaus of Charlotte, Collier and Lee counties, the regional airport authorities, the Realtors of Collier, Lee, and Charlotte counties, the University of Florida Survey Research Center, and the county and city permit offices. 4

Arrivals plus Departures - Thousands Airport Passenger Activity Airport passenger activity is the sum of arrivals and departures for Southwest Florida International (RSW), Sarasota Bradenton International (SRQ), and Punta Gorda (PGD) airports. Peak seasonal activity occurs in February, March, and April, with significantly lower activity in the summer months. Charts 1, 2, and 3 illustrate this seasonality as well as the changes from year to year. Passenger activity for the three airports grew to 726,790 in July 2017, representing a 1-percent increase over the prior month and a 9-percent increase over July 2016. RSW recorded 530,428 passengers in July 2017, up 10 percent from July 2016 (see Chart 1). Passenger activity in Punta Gorda rose to 116,799 in July 2017, a 10-percent increase over July 2016 (Chart 2). Sarasota Bradenton recorded passenger activity of 79,563, up 7 percent over July 2016 (Chart 3). 1,300 Chart 1: SW Florida International Passenger Activity SW Florida International Airport (RSW) Passenger Activity 1,200 1,100 1,000 900 2014 2015 2016 2017 800 700 600 500 400 300 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Local Airport Authorities 5

Arrivals plus Departures - Thousands Arrivals plus Departures - Thousands 160 Chart 2: Punta Gorda Airport Passenger Activity Punta Gorda Airport (PGD) Passenger Activity 140 120 2017 100 80 60 2015 40 2014 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Local Airport Authorities 175 Chart 3: Sarasota Airport Passenger Activity Sarasota Bradenton Int'l Airport (SRQ) Passenger Activity 150 125 2014 2015 2016 2017 100 75 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Local Airport Authorities 6

Monthly Tourst Tax Revenue - Millions Tourist Tax Revenues Seasonally-adjusted tourist tax revenues, shown in Charts 4 and 5, are based on month of occupancy. The total revenues for the three coastal counties rose to $5,859,037 in July 2017, an increase of $152,633 (3 percent) over July 2016, and 2 percent higher than the prior month of June 2017. Collier County s seasonally-adjusted tourist tax revenues were $2,035,734 in July 2017, a 7-percent increase from July 2016. In Charlotte County, revenues rose to $380,383 in July 2017, up 20 percent over July 2016. In Lee County, July 2017 seasonally-adjusted revenues rose to $3,458,501, a less than 1 percent decrease from July 2016. Chart 4: Tourist Tax Revenues for the Coastal Counties 16 14 Tourist Tax Revenue 2012 to Present: 3 Coastal Counties Total Unadjusted Data Seasonally Adjusted (SA) Data 12 10 8 6 4 2 0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Source: Local County Tourism, Tax, and Economic Development Reports 7

Monthly Tourist Tax Revenue - $ Millions Chart 5: Coastal County Tourist Tax Revenues 4.0 County Tourist Tax Revenue - 2012 to present 3.5 3.0 2.5 Lee 2.0 1.5 Collier 1.0 0.5 Charlotte All Data Seasonally Adjusted 0.0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Source: Local County Tourism, Tax, and Economic Development Reports and seasonal adjustment by RERI Taxable Sales Taxable sales data track consumer spending based on the latest month of merchant collections. Because the Florida Department of Revenue reports this data one month later than its usual reporting month, the following information is current through June 2017. Both seasonally-adjusted and unadjusted taxable sales for the region are shown in Chart 6. Total seasonally-adjusted taxable sales in June 2017 were $2.223 billion, up 4 percent from June 2016, and fractionally higher than May 2017. Charts 7 and 8 show seasonally-adjusted taxable sales for the coastal and inland counties, respectively. Lee County s taxable sales increased 4 percent from $1.155 billion in June 2016 to $1.197 billion in June 2017. Collier County s taxable sales increased from $712.1 million in June 2016 to $739.5 million in June 2017, an improvement of 4 percent. Charlotte County taxable sales rose from $237.8 million in June 2016 to $246.7 million in June 2017, an increase of 4 percent. Taxable sales in Hendry County grew to $33.7 million in June 2017, up 9 percent from June 2016. Glades County taxable sales were $4.4 million in June 2017, an increase of 8 percent from June 2016. All cited data are seasonally-adjusted. 8

Monthly Taxabkle Sales - $ Millions Monthly Taxable Sales - $ Billons Chart 6: Taxable Sales for 5 County Region 3.0 Taxable Sales 2012 to Present - 5 County Region 2.5 2.0 1.5 1.0 0.5 Unadjusted Data Seasonally Adjusted (SA) Data 0.0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Source: Florida Department of Revenue, Office of Tax Research Chart 7: Taxable Sales for Coastal Counties 1,400 Coastal County Taxable Sales - 2012 to Present 1,200 1,000 Lee 800 600 Collier 400 200 Charlotte All Data Seasonally Adjusted 0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Source: Florida Department of Revenue, Office of Tax Research 9

Monthly Taxable Sales - $ Millions Chart 8: Taxable Sales for Inland Counties 40 Inland County Taxable Sales - 2012 to Present 35 30 Hendry 25 20 15 All Data Seasonally Adjusted 10 5 Glades 0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Source: Florida Department of Revenue, Office of Tax Research Workforce Labor Force, Employment and Unemployment Charts 9-13 show total persons employed and unemployed, and the unemployment rate, all seasonally adjusted by the RERI, for each county from January 2005 through August 2017. The unemployment rate for the five-county region dropped to 4.0 percent in August, down from 4.1 percent in July 2017 and from 4.7 percent in August 2016. The August 2017 number of employed increased by 3,199 from the prior month, while the number of unemployed decreased by 517. Since August 2016, the number of employed workers has increased by 13,565 (2 percent), while the number of unemployed workers has declined by 4,169 (15 percent), thus decreasing the region s seasonally-adjusted unemployment rate over that period. Lee County s seasonally-adjusted unemployment rate dropped to 3.7 percent in August 2017, a decrease of 0.2 points from July 2017, as depicted in Chart 9. Collier County s unemployment rate held at 4.0 percent in August 2017 (Chart 10). The unemployment rate in Charlotte County also declined, from 4.4 percent in July 2017 to 4.3 percent in August 2017 (Chart 11). Hendry County s August 2017 unemployment rate decreased to 7.7 percent from 8.3 percent in July 2017 (Chart 12). The unemployment rate for Glades County registered at 5.3 percent in August 2017, down from 5.8 percent in July 2017 figure (Chart 13). Florida s seasonally-adjusted unemployment rate declined to 4.0 percent in August 2017, down 0.1 points from July 2017 and 0.9 points below the August 2016 figure. Nationally, the seasonally adjusted national unemployment rate for August 2017 inched up to 4.4 percent, compared to 4.3 percent in July 2017 and 4.9 percent in August 2016. 10

Chart 9: Lee County Labor Force and Unemployment Source: Florida Department of Economic Opportunity and seasonal adjustment by RERI Chart 10: Collier County Labor Force and Unemployment Source: Florida Department of Economic Opportunity and seasonal adjustment by RERI 11

Chart 11: Charlotte County Labor Force and Unemployment Source: Florida Department of Economic Opportunity and seasonal adjustment by RERI Chart 12: Hendry County Labor Force and Unemployment Source: Florida Department of Economic Opportunity and seasonal adjustment by RERI 12

Chart 13: Glades County Labor Force and Unemployment Source: Florida Department of Economic Opportunity and seasonal adjustment by RERI Single-Family Building Permits The number of single-family permits issued by the three coastal counties grew to 909 in August 2017, up 27 percent from August 2016, and 31 percent higher than July 2017. Lee County issued 518 permits in August 2017, an increase of 126 (or 32 percent) over August 2016 (Chart 14). In Collier County, 287 permits were issued in August 2017, compared to 230 in August 2016 (Chart 15). Charlotte County issued 104 permits in August 2017, an increase of 13 over August 2016, as depicted in Chart 16. All trend lines continue to be positive. Hendry County issued 10 more permits in August 2017, for a year-to-date total of 57. This compares favorably with the 35 permits issued last year through August 2016. 13

2007 Av 2008 Av 2009 Av 2010 Av 2011 Av 2012 Av 2013 Av 2014 Av 2015 Av 2016 Av Aug 2016 Sep 2016 Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Permits Issued 2007 Av 2008 Av 2009 Av 2010 Av 2011 Av 2012 Av 2013 Av 2014 Av 2015 Av 2016 Av Aug 2016 Sep 2016 Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Permits Issued 600 550 500 450 400 350 300 250 200 150 100 Chart 14: Single-Family Building Permits for Lee County 50 0 Single Family Permits Issued - Lee County 2007-2016 Monthly Averages; Most Recent 13 Months Data and Trend Permits Linear Trend Source: Local Building and Zoning Departments, including Fort Myers, Cape Coral, and Unincorporated Lee County, Bonita Springs, Estero, and Fort Myers Beach permits Chart 15: Single-Family Building Permits for Collier County 350 Single Family Permits Issued - Collier County 2007-2016 Monthly Averages; Most Recent 13 Months Data and Trend 300 250 200 150 100 50 Permits Linear Trend 0 Source: Local Building and Zoning Departments, includes unincorporated Collier County permits only 14

2007 Av 2008 Av 2009 Av 2010 Av 2011 Av 2012 Av 2013 Av 2014 Av 2015 Av 2016 Av Aug 2016 Sep 2016 Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Permits Issued Chart 16: Single-Family Building Permits for Charlotte County 120 Single Family Permits Issued - Charlotte County 2007-2016 Monthly Averages; Most Recent 13 Months Data and Trend 100 80 60 40 20 Permits Linear Trend 0 Source: Local Building and Zoning Departments, includes unincorporated Charlotte County permits only Existing Single Family Home Sales and Median Prices Charts 17-19 summarize existing single-family home sales by a Realtor for Lee, Collier, and Charlotte Counties. The solid lines represent median prices plotted against the scale on the right side, and the bars represent the number of homes sold with the scale on the left side. The broken lines show the trends in numbers of homes sold and median prices. Total Realtor sales of single-family homes in the three counties were 1,902 in August 2017, a 2-percent increase over August 2016, and 4-percent higher than July 2017. Median prices rose in all three coastal counties compared to August 2016. Lee County single-family home sales increased to 1,121 units in August 2017, a 2-percent increase from the August 2016 figure. The rise in single-family home sales for Lee County was accompanied by an increase in the median price from $225,000 to $239,900 over the same 12-month period. Charlotte County recorded 403 single-family homes sold in August 2017, a decrease of two units from August 2016. Charlotte s median price increased by $13,000 to $210,000 over the same time span. Collier County singlefamily home sales increased to 378 units in August 2017, an 8-percent improvement from August 2016. Over this same period, Collier s median price rose $38,000 to $422,000. 15

Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Number of Homes Sold Median Sale Price - Thousands Chart 19: Existing Single-Family Home Sales for Charlotte County 600 Charlotte County Existing Single Family Home Sales by Realtors $250 500 $200 400 300 200 100 Charlotte Homes Sold Charlotte Median Sale Price $150 $100 $50 0 $0 Source: Florida Realtors Punta Gorda, Florida MSA; http://media.living.net/statistics/statisticsfull.html Consumer Sentiment Index Charts 20 and 21 shows monthly data and linear trend lines over the last six years for both the Florida Consumer Sentiment Index ( CSI ) reported by the University of Florida Bureau of Economic and Business Research (BEBR) and for the United States Index of Consumer Sentiment ( ICS ) reported by Thomson Reuters/University of Michigan. The national ICS fell 1.7 points from August 2017 to September 2017 to 95.1, which marks an increase of 3.9 points from September 2016. The September 29, 2017 issue of Survey of Consumers noted that consumer resilience has again been demonstrated as concerns about the impact of the hurricanes on the national economy have quickly faded. Given that the survey was able to reach most households in Florida and Texas in late September, it should be no surprise that small declines were recorded in the current financial situation of households. The Florida Consumer Sentiment Index measure for September 2017 was 95.5, a decline of 0.6 points from August 2017, but 4 points above the September 2016 figure. This data is depicted in Chart 21 below. Most of the pessimism in September stems from negative expectations regarding the personal financial situation of Floridians in the short-run. These expectations reflect in part the current and expected effects of the hurricane season on the state, said Hector H. Sandoval, director of the Economic Analysis Program at UF s Bureau of Economic and Business Research, as reported in the Florida Consumer Sentiment Index of October 3, 2017. 17

Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Chart 20: U.S. Index of Consumer Sentiment U.S. Index of Consumer Sentiment 110 100 90 Past 13 Months 91.2 87.2 93.8 98.2 98.5 96.3 96.9 97.0 97.1 95.1 93.4 96.8 95.1 80 70 60 110 100 90 80 70 60 50 Past 6 Years Source: Thomson Reuters/University of Michigan Chart 21: Florida Consumer Sentiment Index 110 100 90 80 70 Florida Consumer Sentiment Index Past 13 Months 91.5 89.8 90.3 97.3 97.3 93.8 99.2 95.7 94.3 96.2 97.7 96.1 95.5 60 110 100 90 80 70 60 50 Past 6 Years Source: Bureau of Economic and Business Research, University of Florida 18

Change From Year Earlier Consumer Price Index Chart 22 has been updated to show year-to-year changes in consumer price indices (CPI) through August 2017. The rate of consumer price inflation is increasing, with all three depicted areas up by 1.9 percent or more over the prior August. The national index was up 1.9 percent from August 2016 to August 2017; in the previous 12 months, it was up 1.1 percent. The U.S. Southern Region CPI also increased by 1.9 percent, compared to 1.0 percent between August 2015 and August 2016. The index for the Miami-Ft. Lauderdale area was 2.3 percent higher than August 2016, compared to 1.6 percent in the prior year. Chart 22: CPI Annual Percentage Change 8% 6% 4% Consumer Price Index - Percentage Change From Year Earlier Miami / Ft. Lauderdale US South Region US National 2% 0% -2% -4% -6% Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Source: U.S. Bureau of Labor Statistics Components of the Miami-Fort Lauderdale Consumer Price Index for the 12 months ended August 2017 are shown in Chart 23. The largest increase was seen in the costs of apparel (up 10.0 percent), followed by medical care (up 5.6 percent), while the increase in costs of housing and recreation were above average for the area during this time period. Both Transportation and Education & Communication prices again showed noticeable declines. The Bureau of Labor Statistics news release of September 14 did not comment on these category increases and decreases. 19

Chart 23: Miami-Fort Lauderdale CPI Component Percentage Change Miami - Fort Lauderdale CPI Components 12 month change ending August 2017 Apparel +10.0% Medical care +5.6% Housing +4.6% Recreation +3.0% Other goods and services * Food and beverages Transportation -3.5% Education and -5.3% communication +0.7% +0.2% * Other goods and services: Tobacco and smoking products, personal care products and services, and miscellaneous personal goods. -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% Source: U.S. Bureau of Labor Statistics 12 Month Percentage Change Appendix: Trends in Regional Population, U.S. GDP, U.S. Unemployment, and Industry Diversification The data presented in this appendix are not released on a monthly basis. The first two charts, Charts A1 and A2, show historic population growth through 2015, as well as projections updated annually by the state of Florida s Office of Economic and Demographic Research, working in conjunction with the University of Florida s Bureau of Economic and Business Research. The second two charts, Charts A3 and A4, depict historic measures of U.S. GDP growth rates and unemployment as well as projections by the Federal Reserve s Federal Open Market Committee, while Chart A5 depicts the FGCU Industry Diversification Index for Southwest Florida and the state. Charts A3, A4, and A5 are updated quarterly. Regional Population From 1990 to 2015, regional population growth averaged 2.7 percent per year. The compound average annual rate of growth for 1990 to 2015 was 2.8 percent in Lee County, 3.3 percent in Collier County, 1.7 percent in Charlotte County, 2.1 percent in Glades County, and 1.6 percent in Hendry County. The righthand sections of Charts A1 and A2 show projected population increases from 2016 to 2040. All projected rates of increase are lower than the historic growth rates of 1990 to 2015. Growth for the five-county region averages 1.6 percent per year, resulting in a population increase of 47 percent for the five-county region from 2015 to 2040. This would bring the total to 1,803,526, amounting to nearly 576,000 additional residents. Lee County s population is projected to grow an average of 1.9 percent per year, Collier County 20

Population - Thousands Population - Thousands at 1.4 percent, and Charlotte County at 0.9 percent per year. Hendry County s population is projected to grow at an average of 0.3 percent per year and Glades County at 0.5 percent per year. 1200 Chart A1: Coastal Counties Population, 1990 to 2040 Historic and Projected Population Charlotte, Collier, and Lee Counties 1000 Historic Projected 800 2015 666 2040 1,055 600 400 200 1990 335 1990 152 Lee Collier 2015 344 2040 483 2040 210 2015 1990 Charlotte 167 111 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: Office of Economic and Demographic Research 45 Chart A2: Inland Counties Population, 1990 to 2040 Historic and Projected Population Glades and Hendry Counties 40 35 30 Hendry 2015 38.1 2040 41.6 25 20 15 10 1990 25.8 1990 7.6 Historic 2015 12.9 Projected 2040 14.6 5 Glades 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: Office of Economic and Demographic Research 21

National GDP and Unemployment Charts A3 and A4 depict both historical trends and the Federal Open Market Committee s projections for national Gross Domestic Product ( GDP ) and Unemployment. The FOMC s projections are released quarterly and reflect the assessments of the Federal Reserve Board of Governors and of Federal Reserve District Bank presidents, with the most recent figures shown in the following charts. The dotted lines depict the highest and lowest projections or the range of all projections while the darker blue area within the dotted lines depict the central tendency forecast within those projections. Chart A3 shows the recovery in GDP growth following the most recent recession, and current projections close to the normal long-run trend ( LR ). Real GDP growth rates are based on the change from the fourth quarter of one year to the fourth quarter of the next year. The September 2017 forecast projects an increase in GDP growth for the remainder of 2017 compared to the 1.6 percent recorded for 2016. The overall high and low projections (shown as ranges below) for the rest of 2017, 2018, 2019, and the long run showed little change from the projections made in the June 2017 forecast, with the central tendency forecast hovering around the 2 percent mark through 2018 and then falling slightly thereafter. None of the projections achieves the 3 percent GDP measure that economists generally associate with an economy operating with a full employment of resources. Chart A3: Historic and Projected GDP Growth, 2007 to Long Run Source: Historical data obtained from Bureau of Economic Analysis. Projected data obtained from Federal Reserve Open Market Committee Meeting Statement, September 20, 2017 Chart A4 depicts the recovery in unemployment following the 2008 recession to levels, beginning in 2016, more closely associated with natural rates of unemployment. Compared to these national numbers, unemployment rates in Florida and Southwest Florida tend to be more volatile, falling lower when national unemployment is falling and rising higher when national unemployment is rising. 22

The September forecast projects continued declines in unemployment through 2019, with an average central tendency forecast close to 4.0 percent for the rest of 2017, 2018, and 2019, and then rising in the long run. The lower range forecast now falls below 4 percent in 2018 and remains there for two years. If the U.S. economy avoids falling into a recession past the summer of 2019 an outcome consistent with the Fed s projections then the current expansion will be the longest one observed in 150 years. Chart A4: Historic and Projected Unemployment, 2007 to Long Run Source: Historical data obtained from Bureau of Economic Analysis. Projected data obtained from Federal Reserve Open Market Committee Meeting Statement, September 20, 2017. The next quarterly release of projections for GDP and Unemployment will be released following the FOMC meeting scheduled in December 2017. These projections will be updated in the January 2018 edition of Regional Economic Indicators. Industry Diversification Index The FGCU Industry Diversification Index (IDI) measures the degree to which a region s workforce is concentrated in few industries or dispersed into many. The IDI is computed quarterly by the Regional Economic Research Institute s Industry Diversification Project, which tracks industry diversification by Metropolitan Statistical Area, workforce region, and state. (For more details, please go to lutgert.fgcu.edu/idi). The IDI can be between 0 and 10, with a higher index denoting a more diverse workforce and a lower one denoting a less diverse workforce. Industry diversification is an important factor explaining our state and region s tendency to overheat during expansions in the business cycle and overcorrect during contractions in the business cycle. 23

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 IDI 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 IDI Chart A5 shows the industry diversification index for the Southwest Florida workforce region and the state of Florida. Southwest Florida shows an increase in industry diversification from the fourth quarter of 2006 to the 3rd quarter of 2008. After 2008, the Southwest Florida workforce region exhibits a seasonal trend, mainly due to the stronger influence of tourism and seasonal residents that visit Southwest Florida during the winter season, increasing the demand for retail trade and accommodation and food service jobs. During the first quarter of 2017, the IDI for Southwest Florida measured at 8.36, and ranked as the 11th most industrially diverse workforce region in the state of Florida. Meanwhile, the state of Florida had an IDI of 8.56, ranking as the 21st highest state in the nation in industry diversification. 8.80 8.60 8.40 8.20 8.00 7.80 Chart A5: Industry Diversification Index, 2000 to 2017 Industry Diversification Index Past Nine Quarters 8.48 8.50 8.50 8.54 8.55 8.56 8.48 8.53 8.56 8.50 8.41 8.46 8.34 8.30 8.25 8.31 8.36 8.11 Florida IDI Southwest Florida IDI 9.50 Historical Trend 9.00 8.50 8.00 7.50 7.00 Florida IDI Southwest Florida IDI Source: lutgert.fgcu.edu/idp 24