Florida forecast: Continued slow climb out of joblessness hole
By Jim Stratton, Orlando Sentinel
11:23 a.m. EST, August 5, 2012
Construction jobs in Florida have been decimated in recent years, but they are projected to grow by 4.5 percent in fiscal year 2014, by 9.4 percent in 2015 and by 12.1 percent in 2016. (Tom Burton, Orlando Sentinel file / Aug 05, 2012)
Florida's long-suffering job market looks like it's going to suffer a little longer.
The state's official forecasters are now saying unemployment is likely to remain north of 8 percent through the fiscal year 2014, averaging 8.4 percent over 12 months.
Recent improvements in the jobless rate are expected to slow, with unemployment falling by just one-tenth of a percent ? from 8.5 percent in fiscal year 2013, to 8.4 percent in 2014.
Forecasters say the jobless rate won't drop below 8 percent until fiscal year 2015, when it is projected to average 7.9 percent. Florida's unemployment rate has been higher than 8 percent since December 2008, when it hit 8.2 percent.
The numbers are part of the state's latest economic forecast which overall calls for steady ? but uncomfortably slow ? progress in the next few years.
"Basically, it shows continued sluggishness until the end of 2013, followed by a more significant recovery," said William Seyfried, an economist at Rollins College in Winter Park. Seyfried said the state report is consistent with national forecasts he has reviewed.
The state's labor market will take years to fully heal, with forecasters projecting a jobless rate above 6 percent through 2018.
"We're getting into the difficult arithmetic of bringing that unemployment rate down," said University of Central Florida economist Sean Snaith. "This is going to be an extended process."
In part, that's because recent progress on the jobs front is something of an illusion.
Forecasters say almost 70 percent of the decline in unemployment is the result of people leaving the labor force. And once someone stops looking for work, he or she is no longer considered unemployed.
A shrinking labor pool has helped push the state's jobless rate down from 9.9 percent in December 2011 to 8.6 percent now. But had the size of the labor for remained constant, analysts say, statewide unemployment would still be about 9.5 percent.
The state's unemployment may become a re-election issue for Florida Gov. Rick Scott.
Scott has staked his political future to job creation, and when the 2014 campaign gears up, he could still be facing a statewide jobless rate of 8 percent.
"The hole," forecasters wrote of the state's labor market, "is deeper than it looks."
That's particularly true for construction, which provided hundreds of thousands of solid middle-class jobs before Florida's housing market collapsed.
Construction has since lost about half its labor force, and forecasters say the sector will continue to shed jobs through the end of this year before rebounding.
Construction is projected to grow by 4.5 percent in fiscal year 2014, by 9.4 percent in 2015 and by 12.1 percent in 2016. But the gaudy numbers are a little misleading. Even if the big percentage gains pan out, the total number of construction workers will be significantly below pre-recession levels.
"The growth may seem eye-popping," said Snaith, "but it's not when you consider how the sector has been so devastated."
The professional and business services sector is expected to grow by 3.6 percent this year, 4 percent in fiscal year 2014 and 5.1 percent in fiscal year 2015. Educational and health services ? which posted gains even during the recession ? is projected to grow by about 2 percent each year.
Leisure and hospitality is expected to add relatively few jobs statewide, growing by 0.8 percent in fiscal year 2014 and 1 percent in 2015. In metro Orlando, that sector accounts for about 20 percent of all jobs, up from about 17 percent before the recession.
The state's official forecast is regularly updated, and it is not unusual for its projections to change over time. Seyfried said the numbers could easily be re-shuffled by world events.
"The big questions are what do we do about the [federal] budget issue and what is going to happen in Europe?" he said.
jstratton@tribune.com or 407-420-5379.
stop sopa justified southland sopa blackout protect ip act jim caldwell internet blackout