Wednesday, November 14, 2018
Business

Fueled by more people, Florida’s economic prospects look good over next 30 years

Florida’s economy should be in good shape 30 years from now. There will be bumps, including four to five recessions, if history is a guide. And not everyone will get an equal share of the prosperity.

But thanks largely to a steadily growing population, the state’s financial fortunes look rosy. By 2047, the state will be home to more than 29 million residents, up from about 21 million today.

"One of the big economic distinctions between Florida and states in the northern Rust Belt is our growing population," said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida. "More people in a state’s economy by default means more economic activity."

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Snaith recently released his institute’s annual look at where Florida will be in 10, 20 and 30 years. By 2047, he forecast the state’s total economic output will more than quadruple in today’s dollars from about $1 trillion to just over $4 trillion. Retail sales and personal income will also rise significantly. Housing starts will tick up, too.

Some industries will do a lot better than others.

Snaith forecast construction jobs to jump from a little over 500,000 to more than 1.1 million, propelled by more demand for houses, condos and apartments.

The health sector will continue its nearly uninterrupted decades-long climb, adding another half a million jobs in the next 30 years. State and local governments will continue to add jobs, as will Florida’s large leisure and hospitality sector.

The information sector will continue to have ups and downs over the next decade as newspapers and magazines continue to struggle with how to find enough people to pay for their work. After that, Snaith predicts a quick expansion, pulled along by the sector’s high-tech components, including computer programmers and software developers.

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The already massive professional and business services sector will more than double to over 3.1 million jobs. The forecast highlights the ongoing shift away from industries that make things and toward service providers, including professionals in science and technology.

The trend also shows up in the steadily declining number of jobs in manufacturing, a sector already dinged by automation and foreign competition. Snaith predicts the number of manufacturing jobs will tick up slightly in the next few years and then decline through 2047.

"Some of the recent policies of the Trump administration with regards to trade have given a boost to manufacturing," Snaith said. "But those won’t be enough to turn the longer term trends."

In 2047, tourism and its offshoots will still dominate, Snaith said. Other sectors will keep growing, which will continue to help diversify the state’s economy. But that progress could get obscured as tourism expands just as quickly.

"Things like retail and tourism are not going to suddenly shrivel up. They are the backbone of the economy," he said. "I have described tourism as the 600-pound gorilla of Florida’s economy that has become a 700-pound gorilla in the past seven or eight years."

Where will all these new people come from? Florida remains attractive to businesses and workers fleeing states with fewer prospects. Retiring baby boomers will continue to flood in. The state also benefits from its share of foreign immigration and a birth rate that exceeds its death rate.

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The influx will come with growing pains — economic, political and environmental. But whether or not you like the idea of more people, the spigot cannot easily be shut off or even slowed. And Tampa Bay should expect a bigger share of the next wave.

The already densely populated Miami-Fort Lauderdale area is getting hemmed in by geography, much more so than the Interstate 4 corridor, Snaith said. The result will be relatively high economic growth for our area, including overall employment and per-capita income, compared to the state’s other metro areas.

"The I-4 corridor is really the bread basket for Florida in terms of growth rates going forward," Snaith said. "When you look at Tampa to Orlando, and all the way to Daytona Beach, there is a lot of room to grow in all directions in terms of physical space."

Snaith remains impressed by Florida’s turnaround since the Great Recessions, especially over the past five to seven years.

"It wasn’t that long ago that we were still mired in the aftermath of the recession," he said. "To see that recovery take root in the past five years, and the pace of growth accelerate as it has, was sort of phoenix-like."

Contact Graham Brink at gbrink@tampabay.com. Follow @GrahamBrink.

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