News Releases

FLORIDA ECONOMY GAINED MOMENTUM IN 2011 –
Population Growth Slowly Rebounding

• Job Growth Continues to Pick Up
• Housing Supply is Easing on Higher Sales/Low building
• Population Growth Rebounds, But Pace Still Slow

Tampa (Feb. 14, 2012) - The Florida economy gained some momentum in 2011, but activity remains depressed in the wake of the housing bust. Real GDP growth likely underperformed the national average again last year as it has for the past four straight years according to the State Monitor report released today by BMO Capital Markets Economics.

Job growth continues to pick up, with nonfarm employment a solid 1.6 percent above year-ago levels in December thanks to gains in real estate (+4.2 percent year over year), accommodation and food (+3.5 percent year over year) and retail (+3.1 percent year over year). Construction job losses have moderated in the past year, but employment remains extremely depressed, hitting the lowest level on record in October and 50 percent below peak levels. The jobless rate was 9.9 percent in December, one of the highest in America, but has come down 2.1 percentage points in the past year. The winding down of NASA's shuttle program later this year will temporarily eliminate thousands of jobs until the Constellation program begins running (expected in 2015).

"Population growth picked up 1.2 percent in 2011 as net outward state migration appears to have stopped, but growth remains well below the pre-housing bust pace of more than 2 percent per year, "said Sherry Cooper, Chief Economist, BMO Financial Group.

Housing is showing early signs of stabilization, but it is far from adding meaningfully to economic growth. Home prices were down 8.4 percent year over year in 2011 Q3 and a deep 41 percent since the market peaked in 2006 (U.S. prices are 16 percent off peak levels according to the FHFA index). The months' supply of homes for sale has fallen sharply in Miami, Tampa and Sarasota due to depressed new building activity and higher sales. While foreclosures are declining, the foreclosure rate was still extremely high at 14.6 percent in Q3, miles above the 4.4 percent national rate and the highest in America. Meantime, nearly 44 percent of mortgages remained in a negative equity position in 2011 Q3, the third highest in the country.

According to Dave Maraman, Florida President at M&I, a part of BMO Financial Group, "Florida businesses have started taking the opportunity to invest in their operations to improve productivity. We are providing our clients with sector expertise, local knowledge and mid-market focus to assist them with specific solutions to help them upgrade their businesses."

The full State Monitor report can be downloaded at bmocm.com/economics

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