Hurricane Ian’s Impact on State’s Economy Likely to Echo 2017’s Irma
Hurricane Ian will not have an outsized impact on Florida’s overall economy, but the local effects in the hardest hit areas will be substantial, says Sean Snaith, nationally recognized economist and director of UCF’s Institute for Economic Forecasting, in his latest forecast for the Sunshine State. The institute’s Florida Metro forecast was produced prior to the hurricane and does not reflect the impact of Ian, but Snaith says he expects it to be similar to Hurricane Irma, which traveled the length of the state in 2017 and left plenty of damage in its wake.
The institute releases quarterly U.S. and Florida economic forecasts authored by Snaith. Released today, the Florida & Metro Forecast for summer includes economic analyses and projections for the state and 22 of its metro areas.
In this report, Snaith predicts that from 2022-2025:
- The impact of the Pasta Bowl Recession in Florida will continue to slowly manifest as 2022 gives way to 2023. Large payroll job losses and high unemployment rates are not expected, but this mild recession will impact the labor market.
- Payroll job growth will begin to falter during the recession but not in every sector. After year-over-year growth of -4.9% in 2020, the labor market rebounded to 4.6% in 2021. With job growth expected to be 4.3% in 2022, payroll employment is expected to contract by 0.6% in 2023 and again by 1.5% in 2024 before expanding by 0.6% in 2025.
- Labor force growth in the state is forecasted to average 1.6% from 2022-2025.
- From 2022-2025, Florida’s economy, as measured by Real Gross State Product, is expected to expand at an average annual rate of 1%. Real gross state product will mildly contract during the recession as growth will slow to -0.2% in 2023, turn positive in 2024, and then accelerate in 2025 to 1.7%.
- Real personal income growth is forecasted to average 1% during 2022-2025.
- Housing starts are expected to be suppressed by the recession and higher mortgage rates. The total starts will rise to 195,417 in 2022 before decelerating to 154,459 in 2023 and 150,974 in 2024. They will tick up to 154,790 in 2025. Rapid house price appreciation will vanish over this period as supply catches up with demand dampened by rising mortgage rates, decreasing affordability and the recession.
For a look at the full report, see: business.ucf.edu/centers-institutes/institute-economic-forecasting
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