September 2018 VOLUME XII NUMBER 9

Southwest Florida Regional Economic Indicators September 2018 VOLUME XII NUMBER 9 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 2

Consumer Sentiment Index... 17 Chart 20: U.S. Index of Consumer Sentiment... 18 Chart 21: Florida Consumer Sentiment Index... 18 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 2045... 21 Chart A2: Inland Counties Population, 1990 to 2045... 21 Chart A3: Historic and Projected GDP Growth, 2006 to Long Run... 22 Chart A4: Historic and Projected Unemployment, 2006 to Long Run... 23 Chart A5: Industry Diversification Index, 2000 to 2017... 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 Mr. John Shannon, Economic Analyst, Regional Economic Research Institute Phone: 239-590-1430 Email: jmshannon@fgcu.edu Copyright 2018 FGCU - All rights reserved. 3

Introduction: Regional and National Background Southwest Florida s regional economy continues to display signs of growth across all measured sectors. Improvements include a 9-percent increase in airport passenger activity between June 2017 and June 2018, a 6-percent increase in taxable sales for May 2018 versus May 2017, and a 17-percent increase in tourist tax revenues from June 2017 to June 2018. Southwest Florida s seasonally-adjusted unemployment rate declined to 3.7 percent in July 2018, an improvement from both the previous month (3.8 percent) and previous year (4.1 percent). The region s unemployment rate was matched by the state of Florida in July 2018 (3.7 percent), and 0.2 percentage points below the nation s unemployment rate (3.9 percent). Other highlights in the report include: The region s coastal counties issued 1,048 single-family building permits in July 2018, a 51- percent improvement from July 2017; July 2018 single-family home sales for the three coastal counties increased by 4 percent from the previous year, but declined 10 percent from the previous month. Median home prices for all three counties had year-to-year increases from July 2017 to July 2018. The RERI staff extends its sincere thanks and appreciation to the dedicated individuals and organizations who make this report possible. They include FGCU student workers affiliated with the RERI, the Southwest Florida Regional Planning Council, the individual economic development organizations in Charlotte, Collier, and Lee counties, the convention and visitors bureaus in 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. Total passenger activity for the three airports seasonally declined 13 percent from May 2018 to June 2018. However, compared to June 2017, the region s three commercial airports saw an increase of almost 9 percent. For the first half of 2018, passenger activity exceeded that of the prior year period by 7 percent. RSW passenger activity reached to 546,159 in June 2018, a decline of 18 percent from May 2018, but 3- percent higher than June 2017 (see Chart 1). For the first 6 months of 2018, RSW passenger activity rose 5 percent over the corresponding figure for 2017. Punta Gorda reported 135,860 passengers in June 2018, an increase of 15 percent from May 2018, and a 25-percent increase over June 2017 (Chart 2). Year-todate figures for PGD show an increase of 26 percent from the first half of 2017. Sarasota had 99,270 passengers in June 2018, which was 14-percent below May 2018, but 23-percent higher than the June 2017 figure (see Chart 3). Through June 30, SRQ processed over 30,000 (4 percent) more passengers in 2018 than in 2017. 1,500 Chart 1: SW Florida International Passenger Activity SW Florida International Airport (RSW) Passenger Activity 1,300 2015 2016 1,100 900 2017 2018 700 500 300 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 200 Chart 2: Punta Gorda Airport Passenger Activity Punta Gorda Airport (PGD) Passenger Activity 180 160 140 2018 120 2017 100 80 60 2015 40 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 2015 2016 2017 2018 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. Total revenues for the three coastal counties rose to $6,681,605 in June 2018, a 17-percent improvement over June 2017, and an increase of 3 percent over May 2018. Through June, we have not yet seen impacts relating to red tide and algae invasion. Lee County tourist tax revenues rose to $3,771,281 in June 2018, an 11 percent increase from June 2017 and 6 percent higher than May 2018. Collier County s tourist tax revenues increased to $2,663,776 in June 2018, an increase of 34 percent over June 2017, and 3-percent above May 2018. As noted in earlier reports, much of the year-to-year growth of Collier County s tourist tax revenues can be attributed to an increase in the tourist development tax rate from 4 percent to 5 percent, effective September 1, 2017. Seasonallyadjusted tourist tax revenues in Charlotte County improved to $377,363 in June 2018, up from both the previous month (6 percent) and previous year (5 percent). Chart 4: Tourist Tax Revenues for the Coastal Counties 18 16 Tourist Tax Revenue 2013 to Present: 3 Coastal Counties Total Unadjusted Data Seasonally Adjusted (SA) Data 14 12 10 8 6 4 2 0 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Source: Local County Tourism, Tax, and Economic Development Reports 7

Monthly Tourist Tax Revenue - $ Millions Chart 5: Coastal County Tourist Tax Revenues 4.5 County Tourist Tax Revenue - 2013 to present 4.0 3.5 3.0 Lee 2.5 2.0 Collier 1.5 1.0 0.5 Charlotte 0.0 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 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. This data lags one month before the Florida Department of Revenue s reporting month and are now available through May 2018. Chart 6 shows both seasonally-adjusted and unadjusted taxable sales for the region. Total seasonallyadjusted taxable sales in May 2018 for the five counties reached $2.341 billion, up over $129 million (6 percent) from May 2017, and $50 million (2 percent) above the April 2018 figure. Charts 7 and 8 show seasonally-adjusted taxable sales for the coastal and inland counties, respectively. Lee County s taxable sales rose to $1.266 billion in May 2018, up 7 percent from May 2017, and 2 percent higher than April 2018. Collier County had taxable sales of $777.6 million in May 2018, an increase of 4 percent over May 2017, and 3 percent higher than April 2018. Taxable sales in Charlotte County also showed a year-to-year gain, rising to $263.0 million in May 2018, up 7 percent from May 2017, and 5 percent more than April 2018. Taxable sales in Hendry County declined to $29.1 million in May 2018, compared to $31.9 million in May 2017, a decrease of 9 percent. Glades County taxable sales were $4.7 million in May 2018, a 3-percent decrease from May 2017, but 7 percent above April 2018. All cited data are seasonally-adjusted. 8

Monthly Taxabkle Sales - $ Millions Monthly Taxable Sales - $ Billons Chart 6: Taxable Sales for 5 County Region 3.5 Taxable Sales 2013 to Present - 5 County Region 3.0 2.5 2.0 1.5 1.0 0.5 Unadjusted Data Seasonally Adjusted (SA) Data 0.0 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Source: Florida Department of Revenue, Office of Tax Research Chart 7: Taxable Sales for Coastal Counties 1,400 Coastal County Taxable Sales - 2013 to Present 1,200 1,000 Lee 800 600 Collier 400 200 Charlotte All Data Seasonally Adjusted 0 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 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 - 2013 to Present 35 30 Hendry 25 20 15 All Data Seasonally Adjusted 10 5 Glades 0 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 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 2007 through July 2018. An increase of 3,858 employed persons, coupled with a decrease of 641 unemployed improved the region s unemployment rate to 3.7 percent in July 2018 from 3.8 percent in June 2018. Results continue to compare favorably with the July 2017 unemployment rate of 4.1 percent. The decrease in the seasonally-adjusted unemployment rate since July 2017 is attributable to an employment increase of 14,362 workers (up 2.5 percent) and an unemployment decrease of 2,192 (down 9 percent) over that period. Lee County s seasonally-adjusted unemployment rate dipped to 3.5 percent in July 2018, a decrease of 0.4 points from July 2017, as depicted in Chart 9. The Collier County unemployment rate dropped to 3.6 percent in July 2018 from 4.0 percent in July 2017 (Chart 10). The unemployment rate in Charlotte County was 4.1 percent in July 2018, down from 4.4 percent in July 2017 (Chart 11). Lee s unemployment rate of 3.5 marks the 11th month in a row its unemployment fell below the 4 percent mark. This is the longest string of measures below 4 percent since the 31-month period dating from November 2004 to May 2007. The inland counties did not show the same pattern of improvement. Hendry County s July 2018 unemployment rate rose to 6.4 percent from 6.0 percent in June 2018 (Chart 12). The July 2018 unemployment rate for Glades County inched up to 4.5 percent from 4.4 percent in June 2018 (Chart 13). 10

Unemployment rates for the state of Florida matched those of our Southwest Florida region: 3.7 percent in July 2018, 3.8 percent in June 2018, and 4.1 percent in July 2017. These figures compare favorably with the national unemployment rates of 4.3 percent in July 2017, 4.0 percent in June 2018, and 3.9 percent in July 2018. 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 three coastal counties again reported strong year-to-year increases in single-family building permits for July 2018. A total of 1,048 permits were issued by the three counties in July 2018, an increase of 51 percent over July 2017, although down 2 percent from June 2018. Lee County issued 492 permits in July 2018, an increase of 37 percent over July 2017 (Chart 14). In Collier County, 355 permits were issued in July 2018, an increase of 58 percent from July 2017 (Chart 15). Charlotte County issued 201 permits in July 2018, up 81 percent over July 2017, as depicted in Chart 16. The 13-month trend lines all show positive and improving slopes. Hendry County has issued 102 single-family building permits through July 2018, more than double the figure of 47 through July 2017. 13

2008 Av 2009 Av 2010 Av 2011 Av 2012 Av 2013 Av 2014 Av 2015 Av 2016 Av 2017 Av Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Permits Issued 2008 Av 2009 Av 2010 Av 2011 Av 2012 Av 2013 Av 2014 Av 2015 Av 2016 Av 2017 Av Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Permits Issued 700 650 600 550 500 450 400 350 300 250 200 150 100 Chart 14: Single-Family Building Permits for Lee County 50 0 Single Family Permits Issued - Lee County 2008-2017 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 400 Single Family Permits Issued - Collier County 2008-2017 Monthly Averages; Most Recent 13 Months Data and Trend 350 300 250 200 150 100 50 Permits Linear Trend 0 Source: Local Building and Zoning Departments, includes unincorporated Collier County permits only 14

2008 Av 2009 Av 2010 Av 2011 Av 2012 Av 2013 Av 2014 Av 2015 Av 2016 Av 2017 Av Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Permits Issued Chart 16: Single-Family Building Permits for Charlotte County 220 Single Family Permits Issued - Charlotte County 2008-2017 Monthly Averages; Most Recent 13 Months Data and Trend 200 180 160 140 120 100 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 amounted to 1,906 units in July 2018, an increase of 73 (4 percent) from July 2017, albeit 10 percent below the June 2018 figure. Median prices increased from July 2017 in all three counties. Lee County had single-family home sales of 1,165 units in July 2018, up 9 percent from July 2017, while the median price rose from $235,675 to $255,000 (Chart 17). Collier County single-family home sales were 372 units in July 2018, an increase of 5 percent over July 2017. The median price in Collier County was $435,000 in July 2018, a $26,000 increase from July 2017 (Chart 18). During July 2018, 369 single-family homes were sold in Charlotte County, a decrease of 10 percent from July 2017. Charlotte s median price was $213,900 in July 2018, a slight increase over the prior July (Chart 19). 15

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 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Number of Homes Sold Median Sale Price - Thousands 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 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Number of Homes Sold Median Sale Price - Thousands Chart 17: Existing Single-Family Home Sales for Lee County Lee County Existing Single Family Home Sales by Realtors 1600 $300 1400 1200 1000 $250 $200 800 $150 600 400 200 0 Lee Homes Sold Lee Median Sale Price Homes Sold Trendline Sale Price Trendline $100 $50 $0 Source: Realtor Association of Greater Fort Myers and the Beach, Inc. Chart 18: Existing Single-Family Home Sales for Collier County Collier County Existing Single Family Home Sales* by Realtors 600 $500 500 400 300 200 100 0 Collier Homes Sold Collier Median Sale Price Homes Sold Trendline Sale Price Trendline $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 * Does not include Marco Island Source: Naples Area Board of Realtors (NABOR) www.naplesarea.com 16

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 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 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 0 Charlotte Homes Sold Charlotte Median Sale Price Homes Sold Trendline Sale Price Trendline $150 $100 $50 $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 U.S. Index of Consumer Sentiment fell to 96.2 in August 2018, down 1.7 points from July 2018, and 0.6 points below the August 2017 figure. Concerns about price inflation, with respect to market prices and rising interest rates, dominated the survey. The August 2018 issue of Survey of Consumers noted, [a]lthough a higher inflation rate is partly due to the potential for increased tariffs, the main cause has been the expectation of robust economic growth. Luckily, consumers have not yet judged the current rate of inflation as a significant source of erosion in their living standards or as a cause to reduce their buying plans. The Consumer Sentiment Index for Florida for August 2018 was not available at deadline. However, in July 2018, this figure rose to 99.8, which was an increase from both the June 2018 and July 2017 figures, each reported at 97.7. The average consumer sentiment in the first six months of 2018 is 2.3 points higher than the average of the last six months of 2017, and 2.7 points higher than the average of the first six months of 2017, Hector H. Sandoval, director of the Economic Analysis Program at UF s Bureau of Economic and Business Research, said in the July 31, 2018 edition of Florida Consumer Sentiment Index. Considering the positive economic climate in Florida, we anticipate consumer confidence to continue this upward trend in the following months, although more fluctuations are expected as a result of the uncertainty that might arise as the midterm elections approach. 17

Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Chart 20: U.S. Index of Consumer Sentiment U.S. Index of Consumer Sentiment 110 100 Past 13 Months 96.8 95.1 100.7 98.5 95.9 95.7 99.7 101.4 98.8 98.0 98.2 97.9 96.2 90 80 70 60 110.0 100.0 90.0 80.0 70.0 60.0 50.0 Past 6 Years Source: Thomson Reuters/University of Michigan Chart 21: Florida Consumer Sentiment Index 110 100 Florida Consumer Sentiment Index Past 13 Months 97.7 96.1 95.8 94.8 97.3 97.5 101.3 98.3 97.5 98.0 100.2 97.7 99.8 90 80 70 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 shows year-to-year changes in consumer price indices (CPI) through June 2018. As reported last month, the Chart depicts noticeable increases in consumer price inflation compared to a year earlier. For the Miami/Ft. Lauderdale area, the June 2018 CPI showed an increase of 4.2 percent from June 2017, compared to 2.0 percent from June 2016 to June 2017. CPI growth in the US South Region was 2.7 percent in June 2018, up from 1.5 percent between June 2016 and June 2017. Nationally, the CPI was up 2.9 percent from June 2017 to June 2018, compared to 1.6 percent for June 2017. 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% Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Source: U.S. Bureau of Labor Statistics Components of the Miami-Fort Lauderdale Consumer Price Index for the 12 months ending June 2018 are shown in Chart 23. Increases in medical care and transportation costs continued to drive the rise in CPI inflation. 19

Chart 23: Miami-Fort Lauderdale CPI Component Percentage Change Miami - Fort Lauderdale CPI Components 12 month change ending June 2018 Transportation +10.9% Medical care +10.8% Housing +3.4% Other goods and services * +1.5% Food and beverages Apparel Recreation Education and -0.6% Communication +1.1% +0.2% +0.1% * Other goods and services: Tobacco and smoking products, personal care products and services, and miscellaneous personal -16%-14%-12%-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 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 2016, 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 2016, regional population growth compounded average was 2.7 percent per year. The compound average annual rate of growth for 1990 to 2016 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 1.5 percent in Hendry County. The right-hand sections of Charts A1 and A2 show projected population increases from 2017 to 2045. All projected rates of increase are substantially lower than the aforementioned historic growth rates of 1990 to 2016. Projected growth for the five-county region averages 1.4 percent per year, resulting in a population increase of 47 percent from 2017 to 2045, adding over 598,000 residents and bringing the total 20

Population - Thousands to 1,877,250. Lee County s population is projected to grow an average of 1.6 percent per year, Collier County at 1.3 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. Chart A1: Coastal Counties Population, 1990 to 2045 Source: Office of Economic and Demographic Research 45 Chart A2: Inland Counties Population, 1990 to 2045 Historic and Projected Population Glades and Hendry Counties 40 35 30 Hendry 2016 38.4 2045 42.1 25 20 15 10 199 1990 7.6 Historic 2016 13.0 Projected 2045 15.3 5 Glades 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 Source: Office of Economic and Demographic Research 21

Percentage 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. GDP growth for 2017 measured 2.25 percent (rounded up to 2.3 percent below), which is an increase from the 1.5 measured in 2016, but a decline from 2.9 measured in 2015. The overall high and low projections (shown as ranges below and denoted by the dotted lines) for 2018, 2019, 2020, and the long run, were almost unchanged when compared to the projections made in March 2018, including sentiment that the economy will slow in 2020. A significant difference in June compared to March is a slight narrowing of the central tendency projection, reflecting less statistical certainty about which projections within the range are most likely. Regardless, none of the projections achieves the 3 percent GDP measure that economists generally associate with an economy operating with a full employment of resources. The current economic expansion recently became the second-longest recorded in the last 150 years. If it continues past the summer of 2019 an outcome consistent with the Fed s projections then the current expansion will be the longest one observed over that time period. Chart A3: Historic and Projected GDP Growth, 2006 to Long Run 4.0 U.S. Growth of Real GDP 3.0 2.0 2.4 1.8 2.5 1.6 2.2 1.7 2.6 2.9 1.5 2.3 1.0 0.0-0.3-1.0-2.0-3.0-4.0-2.8 Range Central Tendency Source: Historical data obtained from Bureau of Economic Analysis. Projected data obtained from Federal Reserve Open Market Committee Meeting Statement, June 13, 2018. 22

Percentage Chart A4 depicts the decline 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. As projected in previous quarters, the June 2018 forecast suggests continued declines in unemployment through 2018, a leveling off in 2019, and an increase commencing in 2020. The average central tendency forecasts through 2020 come to 3.6 percent; these rise sharply in the long run. However, compared to the March report (and similar to the GDP projections above), the central tendency projections have narrowed, suggesting somewhat more certainty among Fed economists about what rates are most likely to result within the range. Chart A4: Historic and Projected Unemployment, 2006 to Long Run U.S. Unemployment Rate 11.0 10.0 9.3 9.6 Range Central Tendency 9.0 8.7 8.1 8.0 7.3 7.0 6.9 6.2 6.0 5.0 4.6 5.8 5.3 4.9 4.4 4.0 3.0 Source: Historical data obtained from Bureau of Economic Analysis. Projected data obtained from Federal Reserve Open Market Committee Meeting Statement, June 13, 2018. The next quarterly release of projections for GDP and Unemployment will be released following the FOMC meeting scheduled in September 2018. These projections will be updated in the October 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 23

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. 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 fourth quarter of 2017, the IDI for Southwest Florida measured at 8.49, ranking it as the 9th most industrially diverse workforce region in the state of Florida (out of 24). Meanwhile, the state of Florida had an IDI of 8.57, ranking Florida as the 22nd highest state in the nation in industry diversification. Chart A5: Industry Diversification Index, 2000 to 2017 Source: lutgert.fgcu.edu/idp 24