Central Florida's economy poised for comeback

Think, for a moment, of the region's economy as a patient knocked senseless by the flu.

First, he felt indescribably awful. Pounding headache, achy joints, overwhelming fatigue. That would be 2009 and 2010.

Then, the worst symptoms passed. The patient sat up in bed, sipped some chicken soup and watched a little television. Occasionally, he puttered around the house, feeling stronger, but not yet himself. That would be 2011 and 2012.

Now, it's 2013 and our patient has a big year in front of him.

If all goes well, he'll continue to mend, maybe returning to work by the fall. But if he's unlucky, some other virus could land him back in bed.

Medical metaphors aside, this is where Central Florida finds itself at the beginning of the new year.

Having slogged through the Great Recession and its not-so-great recovery, forecasters are hopeful 2013 will bring modest, but meaningful, economic growth.

"We're not talking about rocketing back to pre-recession status," said University of Central Florida economist Sean Snaith in his 2013 forecast. "But it will be a lot better than the stalled recovery we've been experiencing for the past couple of years."

There are threats along the way: Everyone's paycheck is taking a 2 percent haircut on a payroll-tax increase, Europe's debt crisis could complicate matters and lawmakers will have to reach deals on the federal debt ceiling and sequestration ? a series of forced spending cuts that could cost Florida tens of thousands of jobs.

Those talks should heat up in about two months.

"I'm saying, 'Beware the Ides of March,'?" said Wells Fargo economist Mark Vitner. "If we can navigate through that without significant disruption, I think the economy is poised to accelerate over the course of the year."

To see how 2013 might play out, look first at the gains of 2012:

?Total housing starts doubled, from 5,700 in 2011 to 11,200 in 2012.

?Housing prices in the Orlando area rose by 10 percent over the course of the year.

?Average annual unemployment in Metro Orlando fell almost two percentage points, from 10.4 percent in 2011 to 8.6 percent in 2012. November's jobless rate ? the most recent figure available ? was 7.8 percent.

?And for the second year in a row, total employment in the metro area increased by about 1 percent. That's noteworthy because employment had fallen in 2008, 2009 and 2010.

The importance of an improving labor market is difficult to overstate.

Job status ? employed vs. unemployed ? is the single-most salient measure of most people's economic well being. It drives consumer spending, which, in turn, accounts for about two-thirds of the nation's total economic activity.

UCF projects Metro Orlando's jobless rate will average about 8 percent this year, while total jobs will grow by about 2.6 percent.

Statewide, the jobless rate is expected to continue a gradual decline, hitting 6.7 percent by the end of 2016. "Robust growth," the forecast says, "will not arrive in Florida until the end of 2013 and 2014."

Source: http://www.orlandosentinel.com/os-cfb-cover-story-forecast-0114-20130113,0,1041585.story?track=rss

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