Orlando Stars in Florida Job Growth for 2015
The Great Recession is not quite forgotten in Central Florida, but 2015 is all about growth, and Orlando stars in Florida job growth for 2015. The signs are everywhere: cranes along Orange Avenue, continued expansion of Medical City in Lake Nona, and the upcoming overhaul of Interstate 4.
International Drive is booming with projects like the I-Drive 360 retail and entertainment complex, Universal Orlando is adding a new hotel, and downtown Orlando is getting a new soccer stadium. The Dr. Phillips Center for the Performing Arts has added a new attraction to downtown, and companies like Deloitte and Verizon in Seminole County and Voxx International in Orange are adding higher-paying jobs to the area with new facilities.
If unemployment continues to drop at recent rates, local economists predict a rate of about 5 percent by the end of the year, which some economists consider normal. By many indications, Orlando is a leader in Florida’s economic expansion, in terms of percentage of total jobs being added.
“The pace of growth in Central Florida will be faster than what we see statewide,” said Sean Snaith, economist at University of Central Florida. “The Orlando metro area is, by our forecast, the fastest-growing metro area in the state for jobs. That is fueled by the I-4 projects, Wekiva Expressway, SunRail, robust population growth, new companies here and, yes, the expansion of tourism again.”
Looking back at the economic forecasts for 2014, there was still a lot of talk about the Great Recession and recovery. Just two years ago, the term “green shoots” –describing signs of economic recovery – was still very common. For 2015, pundits, the public and CEOs alike are speculating that the sapling of a recovery could bear a bumper crop of fruit.
“I think it’s the year that the recovery is real. Up until now, it’s been spotty and slow, but recently there’s been a lot of activity in all of the East Central Florida counties,” said Hugh Harling, executive director of the East Central Florida Regional Planning Council. Harling said lower gas prices are fuel on the economic fire.
“I don’t see anything derailing growth this year. If gas prices did go back up, it will create a drag. Raising interest rates would have some negative effect. But I don’t see anything on the horizon that would stop it dead,” he said. “The decline was long, the recovery has been long, but longer recoveries are more steady and meaningful.”
But one area that may be a drag in Central Florida is wage growth. Wages only rise when unemployment levels are low. Florida’s unemployment rate in December was 5.8 percent, the lowest since 2008, but that’s not low enough to pressure businesses to raise wages. UCF’s economic forecast noted that Florida’s population and labor pool continues to grow even as jobs are added, creating some worry that unemployment rates won’t fall significantly over the next year and wages won’t rise.
“The question is when do wages and salaries start to grow,” Snaith said. “Despite the headlines about growth in job numbers, there is still a lot of slack. There’s a lot of labor there that isn’t being used, and the current labor force isn’t getting a significant raise because of that.”
Ajit Lalchandani, Orange County administrator, said he expects the median wage in Orange County to move upward for the first time in years because local growth is outpacing the rest of the state. Still, increasing the average wage in Orange County has unique challenges, he said.
“We are trying to create those high-paying jobs in technology and health care, and we are seeing success. But the reality is that tourism jobs are mainstream in our area. The whole strategy of diversifying more is a long-term thing,” he said. “But tourism creates a lot of economic activity that also lifts the whole region.”
Over the next three years, economists expect jobs expansion in Florida for the following industries: construction (9.2 percent), professional and business services (3.5 percent), trade transportation and utilities (3.3 percent), leisure and hospitality (2 percent), and education and health services (1.9 percent). Housing starts are expected to rise in Florida, topping 100,000 for the first time in years, but the pace of the increase would drop if interest rates rise.
Lalchandani said he expects Horizon West and Lake Nona to continue leading Orange residential growth. Snaith expects the number of distressed properties to continue falling, but he warned that the high number of cash home sales could be interrupted.
“About 40 percent of home sales in the Orlando area are cash. Most of those are investors, private equity and hedge fund investors. That’s not normal and its not sustainable,” he said.
A perennial driver of growth in Florida, population, is expected to keep rising. Florida passed New York as the third-largest state in the nation in 2014. The 2014-2015 forecast for growth is 227,259 people.
“I see growth increasing over the next year, in a more steady fashion,” Harling said. “I think there will be improvement in the jobs that are available – and that is what precedes a real recovery.”
Source: “Job expansion expected over the next three years,” Orlando Sentinel