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Old Florida National Bank Economic Update

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Old Florida National Bank Economic Update

  1. 1. U.S. & Florida Economic Update Orlando, FL January 30th, 2013
  2. 2. U.S. Forecast
  3. 3. U.S. Forecast§  A Pall of Uncertainty Hangs Over the Economy §  Health Care Reform §  Impact on labor market §  Dodd-Frank Financial Regulatory Reform §  Impact on credit flows §  Fiscal Cliff §  Little resolved with lame duck agreement §  Euro
  4. 4. U.S. Forecast§  A recent paper has created an index that quantifies economic policy uncertainty and analyzes its economic impact:§  Measuring Economic Policy Uncertainty By Scott R. Baker Nicholas Bloom, and Steven J. Davis
  5. 5. U.S. Forecast§  The index has three components: 1.  Newspaper coverage of policy- related economic uncertainty. 2.  Number of federal tax code provisions set to expire in future years 3.  Disagreement among economic forecasters (Survey of Professional Forecasters)
  6. 6. U.S. Forecast§  The economic impact of economic policy uncertainty The results of the statistical analysis in the paper show that higher policy uncertainty causes: 1.  Lower private investment 2.  Lower industrial production 3.  Much lower employment
  7. 7. Economic Policy Uncertainty Index
  8. 8. U.S. Forecast§ Sky Mall™ Policy: §  An Expensive Policy that Fails to Achieve its Desired Outcome
  9. 9. U.S. Forecast§ Sky Mall™ Policies: § American Reinvestment and Recovery Act of 2009 § Aka Stimulus Act
  10. 10. Why Didn’t the Stimulus Act Work?
  11. 11. Why Didn’t the Stimulus Act Work?§ The Nun§ The Nobel Prize Winner§ Non-starter Stimulus
  12. 12. U.S. Forecast§  Depleted Housing Wealth§  Still Weak Labor Market§  A continuing ballast on consumer spending
  13. 13. U.S. Household Wealth (Trillions of $)   2005 2006 2007 2008 2009 Q1* 2012 Q3Total Assets 71.3 78.6 79.5 66.6 62.8 78.2Financial Assets 42.9 49.0 51.4 42.2 39.6 53.6Home Equity 13.2 12.8 10.3 7.0 6.1 7.7Net Worth 59.1 65.1 65.1 52.4 48.7 64.8
  14. 14. U.S. Forecast Total Nonfarm Payroll Employment (Millions)145.0140.0135.0130.0125.0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Total Nonfarm Employment
  15. 15. U.S. Forecast Civilian Unemployment Rate (%)10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Unemployment Rate
  16. 16. U.S. Economic Outlook 2012 2012 2013 2013 2013 2014 Q3 Q4 Q1 Q2 GDP% Change, Annual Rate 3.1 -0.1 1.3 2.0 1.9 2.5Consumer Price Index% Change, Annual Rate 2.1 0.2 0.4 1.3 1.5 1.8 Consumer Sentiment 75.0 79.4 77.8 81.1 80.1 83.1 Consumption% Change, Annual Rate 1.6 2.2 1.6 2.0 1.8 2.5
  17. 17. A Slippery Subject§ Greece and the Euro§  Greek bailouts, haircut & the election stays of execution and not pardons §  Contagion concerns (PIIGS) §  Euro still facing greatest threat since inception §  Two possible outcomes for the Euro zone in the long run.
  18. 18. A Slippery SubjectThe Euro and the Tacoma NarrowsBridge
  19. 19. Florida’s Housing Market§ Housing market showing signs oflife § Has housing market found a solid bottom for prices?§ A Tale of Two Markets§ Distressed vs. Traditional § Investor role in distressed market
  20. 20. Florida Forecast
  21. 21. Florida Forecast
  22. 22. Florida Forecast Florida Housing Starts (thousands)300.0 9%250.0 8%200.0 7%150.0 6%100.0 5% 50.0 4% 0.0 3% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Total Private Housing Starts 30 year Mortgage Rates
  23. 23. Florida Forecast§  In 2010 the economic recovery began•  Real GSP growth 1.4% that year•  In 2011 the economy limped further along •  1.3% Real GSP growth§  In 2012 we expect 1.6% growth§  Job growth has limped alongside but only starting late in 2010.
  24. 24. Florida Forecast§  Economic and job growth doesn’t gain significant altitude until 2014 and 2015§  Real GSP growth: § 2014 = 3.3% § 2015 = 4.0%
  25. 25. Florida Forecast Florida Real Gross State Product (% change year ago)8%6%4%2%0%-2%-4%-6%-8% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
  26. 26. Florida Forecast Florida & U.S. Unemployment Rate (%)14.0%12.0%10.0%8.0%6.0%4.0%2.0% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 FL Unemployment Rate U.S. Unemployment Rate
  27. 27. Florida Forecast Florida Employment (Thousands)8200.08000.07800.07600.07400.07200.07000.06800.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Wage & Salary Employment
  28. 28. Florida Forecast Florida Professional & Business Services Employment (Thousands)1400.01300.01200.01100.01000.0 900.0 800.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
  29. 29. Florida Forecast Florida Construction Employment (Thousands)700.0600.0500.0400.0300.0200.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
  30. 30. Florida Forecast Florida State & Local Government Employment (Thousands)1050.01000.0 950.0 900.0 850.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
  31. 31. Florida Forecast Florida Leisure & Hospitality Employment (Thousands)1050.01000.0 950.0 900.0 850.0 800.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
  32. 32. 2013-2016 Averages; Q4 2012 Forecast Population Growth Region Average % Chg Rank Florida 1.6 --- Deltona 1.4 7Gainesville 0.9 12Jacksonville 1.5 6 Lakeland 1.3 8 Miami 1.5 5 Naples 2.4 1 Ocala 1.9 3 Orlando 2.1 2 Palm Bay 1.3 9Pensacola 0.9 11Tallahassee 1.2 10 Tampa 1.6 4
  33. 33. 2013-2016 Averages; Q4 2012 Forecast Employment Growth Region Average % Chg Rank Florida 2.4 --- Deltona 2.3 6Gainesville 1.2 12Jacksonville 2.4 4 Lakeland 2.2 8 Miami 2.2 7 Naples 3.1 1 Ocala 2.9 2 Orlando 2.7 3 Palm Bay 2.2 9Pensacola 1.8 10Tallahassee 1.4 11 Tampa 2.4 5
  34. 34. Thank you Sean M. Snaith, Ph.D. DirectorInstitute for Economic Competitiveness (407) 823-1453 Sean@SeanSnaith.com WWW.IEC.UCF.EDU www.facebook.com/seansnaith Twitter: @seansnaith

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