- CNBC’s ‘Top States for Business’ ranking named Florida as the best economy among all 50 states in America.
- In 2022, Florida’s GDP grew by 4 percent, supplemented by a 4.9 percent increase in job growth compared to 2021.
- The state’s strong economy is also propped up by a strong housing sector that has gone against the national trend of a slowing market.
The state of Florida was determined to have the best economy among all 50 states in America by CNBC in its ‘Top States for Business‘ ranking published last weekend.
As of 2022, the state’s GDP growth stands at 4 percent. Job growth has also experienced an upswing, with a 4.9 percent jump compared to 2021. The climbing indicators have culminated in Moody’s — an issuer of the credit quality of individual obligations or creditworthiness — assigning Florida a AAA stable debt rating and outlook, while corporate headquarters like CSX and Carnival facilitate consistent large-scale economic activity.
In 2022, Florida’s GDP was approximately $1.07 trillion, an increase from the year prior when the state’s GDP stood at $1.02 trillion.
“The Sunshine State’s economy is white hot. Overall growth is among the strongest in the nation, with the job market to match as workers flood into the state,” reads the report.
Moreover, in the face of a slowing housing market across the United States, Florida’s housing sector remains buoyant due in part to the considerable growth in both population and businesses in the state.
Though data shows a national decline in the prices of existing home sales, with a sharp annual drop of 1.7 percent in April, Florida has negated the national trend, with rising prices despite high interest rates forcing buyers out of the market and slowing sales.
According to additional data from the Federal Reserve Economic Data, property listings in Florida are also spending less time on the open market. In January, the median number of days on the market was 69, which dropped to 56 days in June, representing a nearly two-week decline.
The shift marks the largest decrease in days on the market since the period between January 2022 and May 2022, when the median listed days decreased from 51 to 31 days, coinciding with Florida’s real estate market recovery from the effects of the COVID-19 pandemic.
“Florida’s housing market, which is notoriously prone to booms and busts, is well-balanced for the time being,” writes CNBC. “Price appreciation is the fastest in the nation at around 15 percent, while construction activity is strong, and foreclosures are minimal.”
Florida’s housing market strength is secondarily supported by wealthy buyers who view Florida real estate as an investment opportunity. With a spike in all-cash offers from foreign investors from Latin America, Asia, and Europe, prices have remained high, particularly along the coastal areas.
Foreign real estate investors brought upwards of $12 billion to the Florida economy last year, totaling 22,500 existing homes purchased at a medium cost of $347,300, a recent real estate study showed.
Florida’s economic performance yielded high rankings in various indicators of the report, including a top ranking among all states for its unemployment rate. According to the latest figures released by the Florida Department of Economic Opportunity, the state’s unemployment rate for April stood at 2.6 percent, which represents a decline of 0.4 percentage points compared to the same period last year.
“Through strong economic policy and strategic investments, Florida is outperforming the nation and providing more opportunity for its citizens, resulting in more than 200,000 new business formations this year alone and an unemployment rate near an all-time low,” said Gov. Ron DeSantis.
Florida also boasts a strong environment for startup activity, with an array of credit lenders and venture capitalists pointing to its 5.5 percent corporate tax rate and abundance of jobs created through startup companies. The Sunshine State also was deemed the best location to start a small business by Credit on Tap.
Small businesses play a crucial role in driving Florida’s export industry, with 94.6 percent of the state’s exporters being small or medium-sized businesses. To build upon the forward momentum, Florida received $488.4 million from the U.S. Treasury last year under the State Small Business Credit Initiative (SSBCI). Through the SSBCI funding, the state operates five programs: a collateral support program, a loan participation program, a loan guarantee program, an equity/venture capital program, and a capital access program.
The Treasury also disclosed that Florida allocated $250 million to the collateral support program, which works to provide cash collateral accounts to financial institutions in order to enhance the collateral coverage of borrowers.
Earlier this year, the Florida Chamber of Commerce outlined its Florida 2030 Blueprint and its Six Pillars Framework plan, which holds an objective to establish Florida as the tenth-largest economy in the world by the end of the decade. The state currently ranks 16th globally.
“This two-year research program engaged business and community leaders in each of Florida’s 67 counties and identified key trends and the factors that drive their regional economies,” states the Chamber. “Florida 2030 is our opportunity to work together to strengthen your community, business, and future.”
Though the CNBC report highlights a laundry list of accolades that point to strong economic growth, it also forewarns the impact of emerging cracks in the system, such as a high cost of living and a tumultuous insurance market.
Last week, Farmers Insurance, one of Florida’s largest remaining insurers, announced its exit from the state’s insurance market, becoming the fourth company to do so this year.
“We have advised the Florida Office of Insurance Regulation (OIR) of our decision to discontinue offering Farmers-branded auto, home, and umbrella policies in the state,” Farmers media specialist Trevor Chapman told The Capitolist. “This business decision was necessary to effectively manage risk exposure.”