U.S., Florida & Orange County Economic Update 2015 Economic Summit Orlando, FL December 15 th, 2015.

U.S., Florida & Orange County Economic Update

2015 Economic Summit

Orlando, FLDecember 15th, 2015

Economic Policy Uncertainty

Health Care Reform

Employer mandates Impact on labor market

Dodd-Frank Financial Regulatory Reform

Impact on credit flows & financial sector 37.1% (104 – 94 without proposals)

Fiscal Policy

Monetary Policy

When will interest rate hikes commence?

Labor market/wage growth

How will financial markets react?

U.S. Forecast

171615141312111009080706050403020100

145.0

140.0

135.0

130.0

125.0

Total Nonfarm Payroll Employment(Millions)

Total Nonfarm Employment

U.S. Forecast Payroll jobs to reach potential

U.S. Forecast Missing Workers

U.S. Forecast

171615141312111009080706050403020100

10.0

9.0

8.0

7.0

6.0

5.0

4.0

3.0

Civilian Unemployment Rate(%)

Unemployment Rate

U.S. ForecastUnemployment if “missing workers” were found

U.S. Economic Outlook

2014Q2

2014Q3

2014Q4

2014 2015 2016 2017

GDP% Change, Annual

Rate4.6 5.0 2.4 2.3 2.5 2.7 2.9

Consumer Price Index% Change, Annual

Rate3.0 1.1 -1.2 1.6 0.4 1.9 2.2

Consumer Sentiment 82.8 83.0 89.8 84.1 90.4 89.5 88.9

Consumption% Change, Annual

Rate2.5 2.2 2.6 2.4 2.9 3.0 2.8

U.S. Forecast

The Arithmetic of Higher Oil Prices:

Each $1 decrease in the price of a barrel of oil will:

Decrease price of gallon of gas 2.5 cents Push consumer gasoline bills down $3

billion Lower the CPI 0.03% Raise real disposable income 0.25%

U.S. Forecast The Economics of lower Oil

Prices:

Each permanent $10 decrease in the price of a barrel of oil will:

Raise forecast real GDP growth 0.2% in 1st year,

0.5% in the 2nd

Raise forecast of payroll employment 110,000 in 1st year and 390,000 in 2nd

Psychic Impact

Domestic production impacts?

U.S. Forecast

171615141312111009080706050403020100

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.5

2.0

1.5

1.0

0.5

0.0

30-Year Mortgage Rates and Housing Starts(Mortgage rates - Left axis, %)

30-Year Fixed Mortgage RateHousing Starts - Millions

Florida Housing Market

Housing market recovery continues

Now single-digit price appreciation

Still high level of investor activity

Housing finance still an issue

November 2014

November 2013 Percent

change

Closed Sales 17,772 16,061 10.7%

Median Sale Price

$176,000 $170,000 3.5%

Median Days on Market

54 49 10.2%

Inventory(Months Supply)

5.3 5.6 -4.8%



Investors are still active in Florida residential real estate

Still high share of cash transactions

Private equity, hedge funds international buyers

Median Monthly

Rent

Median Home Price Annual yield

January2012 $1,233 $129,000 11.5%

January-2013 $1,289 $145,000 10.7%

January-2014 $1,395 $163,000 10.3%

November-2014 $1,420 $176,000 8.1%

Housing MarketCash Sales

Why are investors still active in Florida residential real estate?

November 2014

November 2013

Cash as % of November 2014 Sales

Florida 6,961 7,048 39.2%

Miami 1,292 1,393 41.9%

Tampa 1,224 1,098 39.1%

Jacksonville 439 428 32.4%

Orlando 723 731 33.0%

Housing MarketCash Sales

Florida Forecast

Florida Forecast

171615141312111009080706050403020100

300.0

250.0

200.0

150.0

100.0

50.0

0.0

9%

8%

7%

6%

5%

4%

3%

Florida Housing Starts(thousands)

Total Private Housing Starts30 year Mortgage Rates

Florida Forecast

171615141312111009080706050403020100

21000.0

20000.0

19000.0

18000.0

17000.0

16000.0

15000.0

Florida Population(Thousands)

Florida Forecast

171615141312111009080706050403020100

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

Florida & U.S. Unemployment Rate(%)

FL Unemployment RateU.S. Unemployment Rate

Florida Forecast

171615141312111009080706050403020100

10%

5%

0%

-5%

-10%

Florida Real Gross State Product(% change year ago)

Florida Forecast

171615141312111009080706050403020100

8400.0

8200.0

8000.0

7800.0

7600.0

7400.0

7200.0

7000.0

6800.0

Florida Employment(Thousands)

Wage & Salary Employment

Florida Forecast

171615141312111009080706050403020100

700.0

600.0

500.0

400.0

300.0

Florida Construction Employment(Thousands)

Florida Forecast

171615141312111009080706050403020100

1300.0

1200.0

1100.0

1000.0

900.0

800.0

Florida Professional & Business Services Employment

(Thousands)

Florida Forecast

171615141312111009080706050403020100

1150.0

1100.0

1050.0

1000.0

950.0

900.0

850.0

800.0

Florida Leisure & Hospitality Employment

(Thousands)

2014-2017 Averages;Q4 2014 Forecast

Florida

Sector% Average Annual

Growth

Construction 9.2

Professional & Business Services 3.5

Trade, Transportation & Utilities 3.3

Leisure & Hospitality 2.0

Education-Health Services 1.9

Information 1.2Financial 0.9Manufacturing 0.6State & Local Government 0.5Federal Government -0.6

RegionPopulation Growth

Average % Chg Rank

Florida 1.4 ---Deltona 1.2 7

Gainesville 0.8 11Jacksonville 1.4 4

Lakeland 1.0 9Miami 1.2 5Naples 2.4 1Ocala 1.6 3

Orlando 2.1 2Palm Bay 1.1 8Pensacola 0.6 12

Tallahassee 0.8 10Tampa 1.2 6


RegionEmployment Growth

Average % Chg Rank

Florida 2.2 ---Deltona 1.7 7

Gainesville 1.1 12Jacksonville 2.3 3

Lakeland 1.5 9Miami 2.1 4Naples 2.9 1Ocala 1.5 8

Orlando 2.7 2Palm Bay 1.7 6Pensacola 1.3 11

Tallahassee 1.4 10Tampa 1.8 5



Orlando MSA

Sector% Average Annual

Growth

Construction 8.6

Professional & Business Services 4.1

Leisure & Hospitality 2.9

Trade, Transportation & Utilities 2.4

Education-Health Services 2.2

Information 1.8

Manufacturing 1.2State & Local Government 1.1Financial 0.4Federal Government -0.4

Orange County Forecast

Sean M. SnaithSean M. Snaith, Ph.D.

Director Director

Institute for Economic CompetitivenessInstitute for Economic Competitiveness

(407) 823-1453(407) 823-1453

[email protected]@SeanSnaith.com

WWW.IEC.UCF.EDUWWW.IEC.UCF.EDU

www.facebook.com/seansnaith www.facebook.com/seansnaith

Twitter: @seansnaithTwitter: @seansnaith

Thank you

U.S., Florida & Orange County Economic Update 2015 Economic Summit Orlando, FL December 15 th, 2015.

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Transcript of U.S., Florida & Orange County Economic Update 2015 Economic Summit Orlando, FL December 15 th, 2015.