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Florida economic rally may be slow
By JEFF HARRINGTON © St. Petersburg Times, published May 24, 2001 TAMPA -- So far during the country's collective economic swoon, Florida can brag that it was not hit as soon or as hard as other states. Now comes the hard part: the waiting game. Mark Vitner, a senior economist with First Union Corp. who specializes in reading Florida's tea leaves, predicts the state will lag behind an economic turnaround, waiting until the middle of 2002 to get back into a growth mode. "Florida did not begin to decelerate with the rest of the country, so we probably will still be slowing while the rest of the country is picking back up again," Vitner said during a visit to Tampa this week. "We will be feeling less well as we go along. (Even) if you're doing better than the rest of the country, if your condition is deteriorating a little bit, it doesn't feel good." Not that Florida has much reason to feel sorry for itself. The state added 240,000 jobs over the past year and, even after a recent spike, its 3.9 percent unemployment rate is one-half percentage point lower than the national average. Homebuilding starts are close to a decade high. "Florida is not immune to swings in the national economy, but clearly it's been less impacted by this slowdown," Vitner said. Vitner has spent 17 years studying Florida's economy, the first nine years with Barnett Banks in Jacksonville and the past eight with First Union out of its Charlotte, N.C., headquarters. His job takes him on weekly treks throughout the Southeast, crisscrossing Florida frequently to chat with bank customers. Some clients are ready to ramp up again; others are fearful, looking for confirmation that a turnaround is under way. Vitner understands the confusion. Rarely has he seen such a batch of mixed signals. Employment nationally is expected to drop again in May for the third month in a row. "I don't know that we've ever had three months of back-to-back declines in employment and not been in a recession," Vitner said. Yet, car sales are still strong and new home sales are near an all-time high. Typically, new home sales decline well ahead of a recession. Such conflicting data lead Vitner to classify the current slowdown as a "near recession." In the Tampa Bay area, even that terminology appears too strong. The area's 3.1 percent unemployment rate is historically on the low side and its 4.4 percent growth in jobs between March 2000 and March 2001 was second only to Las Vegas among large metro areas. Based on Vitner's latest number crunching, the bay area will post a modest increase in jobs this year, though off its typical 4 percent-plus growth rate. Year-to-year, the region has added about 50,000 jobs; Vitner sees that slowing to 32,000 new jobs over the next year, most of them in finance, business and professional services and construction. That cuts the bay area's growth rate from 4 percent to 3 percent. But even at a 3 percent clip, the region's job base still is growing three times faster than the national average. Among Vitner's other prognostications: Florida will not suffer a noticeable drop-off in tourists this summer, but visitors will spend less on eating out and souvenirs to counter high gas prices. Construction will remain strong through 2001 because of projects already in the pipeline but likely will become stagnant for much of 2002. The tech sector will have a modest recovery in the fourth quarter, but it won't be as strong as some investors apparently think in bidding up tech stocks recently. - Jeff Harrington can be reached at (813) 226-3407.
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From the Times Business report
From the AP
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