Breakout Year – Southwest Florida Forecast

‘BREAKOUT’ YEAR HERE FORECAST ECONOMIST’S PREDICTIONS:

Hank Fishkind expects strong population growth

MANATEE COUNTY — Southwest Florida’s economy will likely remain strong through 2016, economist Hank Fishkind told regional business leaders. “Two-thousand fifteen is a breakout year,” Fishkind said during the Bradenton Area Economic Development Corp.’s annual forecast session. He predicts the state’s population will rise by 350,000 this year, payrolls will rise by 230,000 and housing starts will hit 125,000. “We haven’t seen numbers like these since 2009,” the economist said. But Fishkind also expects the state’s growth rate to begin slowing in 2016, thanks to anticipated interest rate increases from the Federal Reserve and other market forces. “It is inevitably going to slow some in 2016 because of rising interest rates,” Fishkind said. Fishkind and many other analysts predicted interest rates would go up in 2014, a normal occurrence in a recovering economy. To date, however, a global flight to U.S. dollars and Treasury bonds, considered the world’s most stable currency, has kept interest rates unusually low. In the short term, historically low interest rates have added fuel to the nation’s ongoing economic recovery. But if rates remain suppressed for too long, Fishkind warns, it could create an asset bubble similar to that of the mid-2000s — when home prices rose to historic highs only to come crashing down beginning in 2008. For most U.S. consumers, the low interest rates have been manifest in 30-year mortgages for owner-occupied homes, which continue to hover between 3 7/8 and 4 percent — the lowest level since the early 1950s. Meanwhile, in more than half of all U.S. states, housing prices are now at, or within, 10 percent of their pre-crisis peak, according to CoreLogic, a leading property information service. Florida, one of the states hardest hit by the collapse of housing markets seven years ago, remains 33.5 percent off its peak, according to CoreLogic. Even there, though, Fishkind speaks of an economic silver lining to what seems like a negative statistic for Florida’s growth over the next few years. “People are more able to sell their homes and move to Florida,” Fishkind said. “This is really important for driving in-migration.”

In Southwest Florida

The west coast of Florida, from Hillsborough County down through Collier County, has benefited from in-migration and will see even more in 2015, Fishkind believes. In Manatee County alone, the population grew by 10,000 in 2014, Fishkind estimates. He predicts the county will experience the same level of growth of net new residents per year in 2015, 2016 and even 2017. Most sectors of the job market are now growing as well, fueled in part by the increased in-migration, Fishkind said. The strongest employment gains have come in sectors such as construction, trade, business and professional services, education, health care and leisure and hospitality. Mark P. Barnebey, an attorney at Bradenton’s Blalock Walters law firm and chairman of the Bradenton Area Economic Development Corp., said Fishkind’s population growth projections were surprising. “That’s as high as we probably ever had, even during the boom times,” Barnebey said. “So that means obviously some need for more services and for new construction.” – Hank Fishkind, economist   HeraldTribune 1/27/2015