- Despite concerns about a U.S. recession, a report from the University of Central Florida indicates that Florida’s economy is well-prepared for potential economic challenges.
- The state’s Real Gross State Product (RGSP) is projected to grow at an average annual rate of 1.5% from 2023-2026, even though a slowdown is anticipated in 2024 and 2025.
- Moreover, following a decline in 2020 due to COVID-19, Florida’s employment rate has rebounded effectively, surpassing its pre-pandemic levels by the end of 2021 and outpacing the national job market recovery.
While the U.S. is grappling with looming recession concerns, a quarterly economic report published by the University of Central Florida (UCF) suggests that Florida’s economy is well-positioned to weather potential economic downturns.
According to the report, the state’s economy, as measured by Real Gross State Product (RGSP), will expand at an average annual rate of 1.5 percent between 2023-2026. Broken down by year, Florida’s RGSP will decelerate during the forthcoming economic slowdown as growth crawl to 0.5 percent in 2024 and 0.8 percent in 2025, before climbing by 1.7 percent in 2026.
“To be clear, any recession or slowdown will impact Florida’s economy,” reads the report. “A recession is never good news as there are always those who will experience economic harm, but compared to what our state went through in those past two recessions, any pain we may have to endure will be far less severe and will not linger for as long.”
The property sector in Florida is also seeing positive growth, per the report’s metrics, with housing prices surging to historical highs. UCF economists suggest that the trend is indicative not just of a robust real estate market but also a broader economic health, considering the ripple effects housing has on other industries.
“More baby boomers continue to reach the end of their working lives, and this bodes well for continued population growth via the in-migration of retirees, as well as job seekers to Florida,” the report reads. “We expect sale declines to slow, as increases in the supply of new housing coupled with a possible recession will help keep price appreciation contained in an environment with continuing strength in the demographic drivers of housing demand and pressure from higher mortgage rates.”
Sustained personal income figure increases further bolster Florida’s economic resilience. In 2020, the state recorded a 6.1 percent growth, followed by a 9.8 percent jump in 2021.
Though 2022 experienced a dip of 2.1 percent, projections for the subsequent years are optimistic. Predictions from 2023 to 2026 outline an average annual growth rate of 2.8 percent.
Retail, often a barometer for consumer sentiment and economic strength, took a hit in 2020 but sharply bounced back in 2021, registering a 14.9 percent increase. Florida’s employment data paints a similarly positive picture. After facing a contraction of 4.9 percent in 2020, Florida’s job market recovered with a 4.6 percent increase in employment in 2021. The following year saw an even larger increase, with a 5.7 percent growth.
“Business payrolls were devastated by COVID-19 lockdowns, as layoffs happened in a massive, but thankfully short-lived, wave,” the report states. “Florida’s total business payrolls, however, surpassed their pre-pandemic levels late in 2021 and the pace of Florida’s labor market recovery has exceeded the recovery of the national job market since the end of the lockdowns.”