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Economy roars ahead

Hurricanes and record energy prices can't knock down the hot home building market and brisk spending by consumers and businesses.

By Staff and Wire Reports
Published December 1, 2005

The nation's economy demonstrated just how sturdy it is, posting its strongest quarterly showing in more than a year despite the Gulf Coast hurricanes.

Gross domestic product, the best measure of economic standing, increased at a hardy 4.3 percent annual rate from July through September, the Commerce Department reported Wednesday.

The reading was even better than the 3.8 percent pace estimated a month ago for the third quarter, and it exceeded analysts' projections of a 4 percent pace.

GDP measures the value of all goods and services produced within the United States.

In the Tampa Bay area, much of the economic sizzle continued to be found in housing construction through projects such as St. Petersburg's Parkshore Plaza with its 118 luxury condominiums, an d the planned New Port Tampa Bay "urban waterfront village" just starting to take shape on the Hillsborough side of the Gandy Bridge.

The economy's upgraded performance reflected not only stronger investment in home building, but brisk spending by consumers and businesses - despite record energy prices.

"The economy shrugged off the ill effects of the hurricanes very gracefully," said Mark Zandi, chief economist at Moody's Economy.com.

The hurricanes did bite into economic activity, especially when it came to jobs.

Zandi and other economists think economic growth probably would have topped 5 percent if the hurricanes had bypassed the United States.

Nonetheless, the GDP's growth during the third quarter was the strongest since the first three months of 2004.

And it showed the economy gained considerable momentum from the 3.3 percent pace in this year's second quarter, the April-June period.

In a sampling of Tampa Bay business opinion, the mood remains bullish - with a few concerns - in an area economy operating with 3.4-percent unemployment but also with rising interest rates.

"The outlook is a lot brighter than it appeared in the week or two after Katrina hit," said economist Scott Brown at Raymond James & Associates in St. Petersburg. "Crude oil, natural gas, home heating oil and gasoline are now well below where they were the week before Katrina hit."

"Our business has more than doubled in size this year, but I'd also say business in general is strong," said John Long, chief executive of First Advantage Corp. in St. Petersburg. "On the employment side of our business (screening job candidates), growth is over 10 percent because people are hiring."

Long also cited the strength of the local job market.

"We're hiring higher-end talent and we've had some challenges finding those folks, though if you stay at it, you can get the people," he said.

Looking ahead, economists predict the economy will turn in a solid performance in the October-to-December quarter, even based on the assumption of consumers' belt-tightening.

Economic growth projections for the fourth quarter range from a growth rate of more than 3 percent to 4 percent.

A few analysts think the GDP could come in a subpar 2 percent.

-- Times staff writers Kris Hundley and Louis Hau contributed to this report.

3.4: Percent of Tampa Bay area's unemployed in October

4.3: Percent of same area's unemployed in October 2004

84: Consumer confidence index for Floridians in November

93: Florida's (higher) consumer confidence index in November 2004

958: Number of Florida households for each one in foreclosure

$225,700: Median sales price of a Tampa Bay area single-family home in October

$167,000: Median sales price of same area's single-family home in October 2004

Source: U.S. Census Bureau, University of Florida, Florida Association of Realtors.

[Last modified December 2, 2005, 01:13:14]