The full economic toll from coronavirus is starting to come into view — but so is the recovery, assuming the pandemic abates.
According to a new report from the University of Central Florida’s Institute for Economic Forecasting, Florida’s economy is expected to contract by 6% year-on-year in 2020 — but will bounce back with growth of 7.6% in 2021. By comparison, the Conference Board, the nonprofit group of economists that calls U.S. recessions, predicts 4.9 percent contraction for the American economy in 2020 and a 2% growth recovery in 2021.
“If the Sunshine State can avoid more shutdowns, it will be on track to a fast recovery while outpacing much of the nation in job growth and income growth,” the Institute said in the report.
That outlook assumes the state avoids further shutdowns, which report author and Institute director Sean Snaith estimates left more than one million Floridians out of work. Snaith says that it may take until 2023 before Florida approaches full employment; other reports have also set that year as the likely date when key components of the state’s economy will have fully recovered.
The Central Florida Institute now forecasts annualized statewide unemployment rates of 8.2% for 2020, 5.5% for 2021, and 3.6% for 2022. Leading the jobs recovery will be the leisure and hospitality sector, which is expected to grow 31% in 2021 after contracting 8.6% in 2020. According to travel data group STR, statewide hotel occupancy was 43.3% in June — well below the 74.2% seen this time last year. And real estate loan tracking group Trepp puts the percentage of hotel loans that are 30 or more days delinquent at 23.4 percent as of last month — the highest percentage on record.
Florida retail jobs are also predicted to snap back by 10% in 2021 after declining 6.1% in 2020. That forecast comes as numerous regional and national retail chains, including Stein Mart, Lord & Taylor, Brooks Brothers, and J.C. Penney, have filed for bankruptcy amid the pandemic.
For Miami-Dade, the recovery will be led by professional and business services employment, which is expected to average 3.7% growth in 2023, followed by education and health services at 2.9%. Manufacturing is forecast to decline 2.8%.
In an interview, Snaith pointed out that even a 31% recovery does not constitute a return to normal. “The percentage growth rates can distort things,” he said. “A 30 or 25% growth rate looks big at face value, but when you look at the levels of employment, you can see it’s well depressed from where we were in February.”
One bright spot that has managed to weather the pandemic has been housing. Recent reports show new pending sales of single-family homes up 23.2% in June year-on-year, while condo-townhouse sales are up 19.8%, according to Florida Realtors.
“Unlike the last recession, there’s no albatross of a collapse in the housing market that really weighed down for many years,” Snaith said. “I think housing is still in the same situation, which is there’s a shortage. So that ongoing housing boom will certainly help and feed into this recovery.”
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