Southwest Florida Regional Economic Indicators December 2017

Southwest Florida Regional Economic Indicators

December 2017 VOLUME XI NUMBER 12

Regional Economic Research Institute

Lutgert College Of Business 10501 FGCU Blvd. South Fort Myers, FL 33965 Phone 239-590-7090 www.fgcu.edu/cob/reri

Table of Contents Introduction: Regional and National Background ........................................................................................................4 Airport Passenger Activity .............................................................................................................................................5 Chart 1: SW Florida International Passenger Activity...............................................................................................5 Chart 2: Punta Gorda Airport Passenger Activity .....................................................................................................6 Chart 3: Sarasota Airport Passenger Activity ............................................................................................................6 Tourist Tax Revenues .....................................................................................................................................................7 Chart 4: Tourist Tax Revenues for the Coastal Counties ..........................................................................................7 Chart 5: Coastal County Tourist Tax Revenues .........................................................................................................8 Taxable Sales .................................................................................................................................................................8 Chart 6: Taxable Sales for 5 County Region ..............................................................................................................9 Chart 7: Taxable Sales for Coastal Counties .............................................................................................................9 Chart 8: Taxable Sales for Inland Counties .............................................................................................................10 Workforce – Labor Force, Employment and Unemployment......................................................................................10 Chart 9: Lee County Labor Force and Unemployment ...........................................................................................11 Chart 10: Collier County Labor Force and Unemployment ....................................................................................11 Chart 11: Charlotte County Labor Force and Unemployment................................................................................12 Chart 12: Hendry County Labor Force and Unemployment ...................................................................................12 Chart 13: Glades County Labor Force and Unemployment ....................................................................................13 Single-Family Building Permits ....................................................................................................................................13 Chart 14: Single-Family Building Permits for Lee County ........................................................................................14 Chart 15: Single-Family Building Permits for Collier County ..................................................................................14 Chart 16: Single-Family Building Permits for Charlotte County .............................................................................15 Existing Single–Family Home Sales and Median Prices ...............................................................................................15 Chart 17: Existing Single-Family Home Sales for Lee County .................................................................................15 Chart 18: Existing Single-Family Home Sales for Collier County .............................................................................16 Chart 19: Existing Single-Family Home Sales for Charlotte County .........................................................................17 Consumer Sentiment Index .........................................................................................................................................17 Chart 20: U.S. Index of Consumer Sentiment .........................................................................................................18 Chart 21: Florida Consumer Sentiment Index .........................................................................................................18

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Consumer Price Index ..................................................................................................................................................19 Chart 22: CPI Annual Percentage Change...............................................................................................................19 Chart 23: Miami-Fort Lauderdale CPI Component Percentage Change .................................................................20 Appendix: Trends in Regional Population, U.S. GDP, U.S. Unemployment, and Industry Diversification ...................20 Chart A1: Coastal Counties Population, 1990 to 2040 ...........................................................................................21 Chart A2: Inland Counties Population, 1990 to 2040 .............................................................................................21 Chart A3: Historic and Projected GDP Growth, 2007 to Long Run .........................................................................22 Chart A4: Historic and Projected Unemployment, 2007 to Long Run ....................................................................23 Chart A5: Industry Diversification Index, 2005 to 2016 ..........................................................................................24

Regional Economic Indicators is published monthly by the staff and students of the Regional Economic Research Institute at Florida Gulf Coast University. Dr. Chris Westley, Director, Regional Economic Research Institute Phone: 239-590-7090 Email: [email protected] Mr. Steven Scheff, Business Analyst, Regional Economic Research Institute Phone: 239-590-7315 Email: [email protected] Mr. Jim Breitbach, Technical Support, Regional Economic Research Institute Email: [email protected] Copyright © 2017 FGCU - All rights reserved.

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Introduction: Regional and National Background Southwest Florida exhibited signs of recovery following the aftermath of Hurricane Irma’s landfall in September. Positive signs included a 51-percent month-to-month increase in single-family building permits issued in October 2017 and a 24-percent month-to-month increase in existing single-family home sales recorded in October 2017. However, Irma’s effects could be seen in the 16-percent decrease in airport passenger activity from September 2016 to September 2017. Southwest Florida’s unemployment rate declined from 3.6 percent in September to 3.5 percent in October 2017. The region’s unemployment rate came in just below the state of Florida’s 3.6 percent and well below the national rate of 4.1 percent. As noted last month, caution should continue to be exercised when interpreting changes in unemployment data from September, due to the data collection process being potentially disrupted by Hurricane Irma. Other highlights in the report include: 

Tourist tax revenues remained largely unaffected from Hurricane Irma, increasing 5 percent from September 2016 to September 2017.



While single-family median prices declined for all three coastal counties from September 2017 to October 2017, all three counties experienced an increase when compared to October 2016.



The Florida consumer sentiment index improved to 96.7 in November 2017, up 1.9 points from the previous month and 6.4 points from the previous year.

The RERI staff extends its sincere thanks and appreciation to the dedicated individuals and organizations who contribute to this report. These include FGCU student workers affiliated with the RERI, the Southwest Florida Regional Planning Council, the Economic Development Organizations of Charlotte, Collier, and Lee counties, the Convention and Visitors Bureaus of Charlotte, Collier and Lee counties, the regional airport authorities, the Realtors® of Collier, Lee, and Charlotte counties, the University of Florida Survey Research Center, and the county and city permit offices.

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Airport Passenger Activity Airport passenger activity is the sum of arrivals and departures for Southwest Florida International (RSW), Sarasota Bradenton International (SRQ), and Punta Gorda (PGD) airports. Peak seasonal activity occurs in February, March, and April, with significantly lower activity in the summer months. Charts 1, 2, and 3 illustrate this seasonality as well as the changes from year to year. Passenger activity for the three airports totaled 440,271 in September 2017, representing a decrease of 84,745 (16 percent) from September 2016. The decline reflects the anticipation and destruction caused by Hurricane Irma. RSW recorded 327,466 passengers in September 2017, down 16 percent from September 2016 (see Chart 1). Passenger activity in Punta Gorda dropped to 51,836 in September, creating a unique year-to-year decline at this facility of 19-percent from September 2016 (Chart 2). Sarasota Bradenton’s passenger activity dipped to 60,969 in September 2017, down 12 percent from September 2016 (Chart 3).

Chart 1: SW Florida International Passenger Activity SW Florida International Airport (RSW) Passenger Activity 1,300

Arrivals plus Departures - Thousands

1,200

2014

1,100

2015

1,000

2016

900

2017

800 700 600 500 400 300 Jan

Feb

Mar

Apr

May

Jun

Source: Local Airport Authorities

5

Jul

Aug

Sep

Oct

Nov

Dec

Chart 2: Punta Gorda Airport Passenger Activity Punta Gorda Airport (PGD) Passenger Activity 160


140 120 2017 100 80 2015 60 40

2014

20 0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Chart 3: Sarasota Airport Passenger Activity Sarasota Bradenton Int'l Airport (SRQ) Passenger Activity


175

150

2014 2015 2016

125

2017

100

75

50 Jan

Feb

Mar

Apr

May

Jun


6

Jul

Aug

Sep

Oct

Nov

Dec

Tourist Tax Revenues Seasonally-adjusted tourist tax revenues, shown in Charts 4 and 5, are based on month of occupancy. Notwithstanding the impact of Hurricane Irma, total revenues for the three coastal counties rose to $5,982,969 in September 2017, an increase of 5 percent over September 2016, and 15-percent higher than the prior month of August 2017. All three counties experienced seasonally-adjusted increases in September, as depicted in Charts 4 and 5. In Lee County, September 2017 seasonally-adjusted revenues increased to $3,624,435, up 5 percent over the September 2016 figure. Collier County’s seasonally-adjusted tourist tax revenues were $1,995,768 in September 2017, a 4-percent increase from September 2016. In Charlotte County, tourist tax revenues rose to $354,100 in September 2017, an increase of less than 1-percent from September 2016.

Chart 4: Tourist Tax Revenues for the Coastal Counties Tourist Tax Revenue 2012 to Present: 3 Coastal Counties Total 16

Monthly Tourst Tax Revenue - Millions

Unadjusted Data 14

Seasonally Adjusted (SA) Data 12 10 8 6 4 2 0 Jan-12

Jan-13

Jan-14

Jan-15

Source: Local County Tourism, Tax, and Economic Development Reports

7

Jan-16

Jan-17

Chart 5: Coastal County Tourist Tax Revenues County Tourist Tax Revenue - 2012 to present

Monthly Tourist Tax Revenue - $ Millions

4.0 3.5 3.0 Lee

2.5 2.0

Collier 1.5 1.0 0.5 0.0 Jan-12

Charlotte

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Source: Local County Tourism, Tax, and Economic Development Reports and seasonal adjustment by RERI

Taxable Sales Taxable sales data track consumer spending based on the latest month of merchant collections. This data lags one month before the Florida Department of Revenue’s usual reporting month. Given that there was no data release in November, this data is current through August 2017. Both seasonally-adjusted and unadjusted taxable sales for the region are shown in Chart 6. Total seasonally-adjusted taxable sales in August 2017 were $2.202 billion, up 2 percent from August 2016, but down 1 percent from July 2017. Charts 7 and 8 show seasonally-adjusted taxable sales for the coastal and inland counties, respectively. Lee County’s taxable sales increased to $1.186 billion in August 2017, up 2 percent from August 2016. Collier County’s taxable sales increased from $721.1 million in August 2016 to $732.0 million in August 2017, an improvement of 2 percent. Charlotte County taxable sales rose from $244.9 million in August 2016 to $246.6 million in August 2017, an increase of 1 percent. Taxable sales in Hendry County totaled to $32.0 million in August 2017, compared to 32.1 million in August 2016. Glades County taxable sales were $4.3 million in August 2017, an increase of 10 percent from August 2016. All cited data are seasonally-adjusted.

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Chart 6: Taxable Sales for 5 County Region

Monthly Taxable Sales - $ Billons

3.0

Taxable Sales 2012 to Present - 5 County Region

2.5

2.0

1.5

1.0 Unadjusted Data Seasonally Adjusted (SA) Data

0.5

0.0 Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Source: Florida Department of Revenue, Office of Tax Research

Chart 7: Taxable Sales for Coastal Counties 1,400

Coastal County Taxable Sales - 2012 to Present

Monthly Taxabkle Sales - $ Millions

1,200 1,000

Lee

800

Collier 600

All Data Seasonally Adjusted

400

Charlotte 200 0 Jan-12

Jan-13

Jan-14

Jan-15


9

Jan-16

Jan-17

Chart 8: Taxable Sales for Inland Counties 40

Inland County Taxable Sales - 2012 to Present

Monthly Taxable Sales - $ Millions

35 30

Hendry

25 20

All Data Seasonally Adjusted

15 10 5 0 Jan-12

Glades

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17


Workforce – Labor Force, Employment and Unemployment Charts 9-13 show total persons employed and unemployed, and the unemployment rate, all seasonally adjusted by the RERI, for each county from January 2005 through October 2017. The unemployment rate for the five-county region again edged downward in October 2017 to 3.5 percent, down from 3.6 percent in September 2017 and from 4.9 percent in October 2016. While 110 fewer people were employed compared to September 2017, the seasonally-adjusted number of unemployed declined by 320. Lee County’s seasonally-adjusted unemployment rate dropped to 3.3 percent in October 2017, a decrease of 0.1 points from September 2017, as depicted in Chart 9. Collier County’s unemployment rate rose from 3.5 percent in September 2017 to 3.6 percent in October 2017 (Chart 10). The unemployment rate in Charlotte County decreased, from 3.8 percent in September 2017 to 3.7 percent in October 2017 (Chart 11). Hendry County’s October 2017 unemployment rate remained unchanged from September 2017 at 6.9 percent (Chart 12). Similarly, the unemployment rate for Glades County was 4.8 percent in both October and September 2017 (Chart 13). Florida’s seasonally-adjusted unemployment rate declined to 3.6 percent in October 2017, down 0.2 points from September 2017 and 1.3 points below the October 2016 figure. Nationally, the seasonally adjusted national unemployment rate for October 2017 dipped to 4.1 percent, compared to 4.2 percent in September 2017 and 4.8 percent in October 2016.

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Chart 9: Lee County Labor Force and Unemployment

600

12.0

500

10.0

400

8.0

300

6.0

200

4.0

100

2.0 Unemployed

Employed

Unemployment Rate

Jan 17

Jan 16

Jan 15

Jan 14

Jan 13

Jan 12

Jan 11

Jan 10

Jan 09

Jan 08

Jan 07

0.0

Jan 06

0

Source: Florida Department of Economic Opportunity and seasonal adjustment by RERI

Chart 10: Collier County Labor Force and Unemployment


11

Unemployment Rate - Percent

14.0

Jan 05

Numbers of Employed / Unemployed - Thousands

Labor Force and Unemployment: 5 County Region 700

Chart 11: Charlotte County Labor Force and Unemployment


Chart 12: Hendry County Labor Force and Unemployment


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Chart 13: Glades County Labor Force and Unemployment


Single-Family Building Permits The number of single-family building permits issued by the three coastal counties rose to 782 in October 2017, a 51-percent increase over the hurricane-impacted month of September 2017. This also represented a 34-percent increase from October 2016. Lee County issued 462 permits in October 2017, a 62-percent increase over October 2016 and 76-percent higher than September 2017 (Chart 14). In Collier County, 202 permits were issued in October 2017, compared to 216 in October 2016 and 177 in September 2017 (Chart 15). Charlotte County issued 118 permits in October 2017, an increase of 36 from October 2016 and 40 more than September 2017, as depicted in Chart 16. All trend lines continue to be positive. Hendry County issued seven more permits in October 2017, bringing its year-to-date total to 68. This compares favorably with the 47 permits issued through October 2016.

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Chart 14: Single-Family Building Permits for Lee County Single Family Permits Issued - Lee County 2007-2016 Monthly Averages; Most Recent 13 Months Data and Trend

600 550 500 450

Permits Issued

400 350 300 250 200 Permits

150

Linear Trend

100 50

Oct 2017

Sep 2017

Aug 2017

Jul 2017

Jun 2017

Apr 2017

May 2017

Mar 2017

Feb 2017

Jan 2017

Dec 2016

Oct 2016

Nov 2016

2016 Av

2015 Av

2014 Av

2013 Av

2012 Av

2011 Av

2010 Av

2009 Av

2008 Av

2007 Av

0

Source: Local Building and Zoning Departments, including Fort Myers, Cape Coral, and Unincorporated Lee County, Bonita Springs, Estero, and Fort Myers Beach permits

Chart 15: Single-Family Building Permits for Collier County Single Family Permits Issued - Collier County 2007 - 2016 Monthly Averages; Most Recent 13 Months Data and Trend 350 300

200 150 100

Permits 50

Linear Trend

Source: Local Building and Zoning Departments, includes unincorporated Collier County permits only

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Oct 2017

Sep 2017

Aug 2017

Jul 2017

Jun 2017

May 2017

Apr 2017

Mar 2017

Feb 2017

Jan 2017

Dec 2016

Nov 2016

Oct 2016

2016 Av

2015 Av

2014 Av

2013 Av

2012 Av

2011 Av

2010 Av

2009 Av

2008 Av

0

2007 Av

Permits Issued

250

Chart 16: Single-Family Building Permits for Charlotte County Single Family Permits Issued - Charlotte County 2007-2016 Monthly Averages; Most Recent 13 Months Data and Trend 120

Permits Issued

100

80

60

40

Permits 20

Linear Trend

Oct 2017

Sep 2017

Aug 2017

Jul 2017

Jun 2017

Apr 2017

May 2017

Mar 2017

Feb 2017

Jan 2017

Dec 2016

Oct 2016

Nov 2016

2016 Av

2015 Av

2014 Av

2013 Av

2012 Av

2011 Av

2010 Av

2009 Av

2008 Av

2007 Av

0

Source: Local Building and Zoning Departments, includes unincorporated Charlotte County permits only

Existing Single–Family Home Sales and Median Prices Charts 17-19 summarize existing single-family home sales by a Realtor® for Lee, Collier, and Charlotte Counties. The solid lines represent median prices plotted against the scale on the right side, and the bars represent the number of homes sold with the scale on the left side. The broken lines show the trends in numbers of homes sold and median prices; they remain positive. October 2017 Total Realtor® sales of single-family homes in the three counties rebounded from the impact of Hurricane Irma in September 2017, increasing by 24 percent. However, median prices in October 2017 were down between 3 and 6 percent compared to September 2017. Lee County single-family home sales increased to 857 units in October 2017, up 23 percent from September 2017, albeit 10-percent below October 2016. The median price increased from $225,000 to $240,000 over the same 12-month period. Charlotte County recorded 306 single-family homes sold in October 2017, the same as September 2017, but a decrease of 13 percent from October 2016. Charlotte’s median price was $207,000 in October 2017, up $2,000 from the year before. Collier County single-family home sales rose to 301 units in October 2017, a 74-percent increase from the prior month and 2 percent above October 2016. Collier’s median price decreased from $448,000 in September 2017 to $425,000 in October 2017. It will take more time to properly evaluate the effects of Hurricane Irma on Southwest Florida’s real estate market.

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Chart 17: Existing Single-Family Home Sales for Lee County Lee County Existing Single Family Home Sales by Realtors® 1600

$300

1400 1200 $200 1000 800

$150

600 $100

Lee Homes Sold Lee Median Sale Price Homes Sold Trendline Sale Price Trendline

400 200

$50

Oct 2017

Sep 2017

Jul 2017

Aug 2017

Jun 2017

Apr 2017

May 2017

Mar 2017

Jan 2017

Feb 2017

Dec 2016

Oct 2016

Nov 2016

Sep 2016

Jul 2016

Aug 2016

Jun 2016

Apr 2016

May 2016

Mar 2016

Jan 2016

Feb 2016

Dec 2015

$0

Nov 2015

0

Median Sale Price - Thousands

Number of Homes Sold

$250

Source: Realtor® Association of Greater Fort Myers and the Beach, Inc.

Chart 18: Existing Single-Family Home Sales for Collier County Collier County Existing Single Family Home Sales* by Realtors® 600

$500


$400 $350

400

$300 300

$250 $200

200

$150

Collier Homes Sold Collier Median Sale Price Homes Sold Trendline Sale Price Trendline

100

$100 $50

* Does not include Marco Island Source: Naples Area Board of Realtors® (NABOR) www.naplesarea.com

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Oct 2017

Sep 2017

Aug 2017

Jul 2017

Jun 2017

May 2017

Apr 2017

Mar 2017

Feb 2017

Jan 2017

Dec 2016

Nov 2016

Oct 2016

Sep 2016

Aug 2016

Jul 2016

Jun 2016

May 2016

Apr 2016

Mar 2016

Feb 2016

Jan 2016

Dec 2015

$0

Nov 2015

0


$450 500

Chart 19: Existing Single-Family Home Sales for Charlotte County Charlotte County Existing Single Family Home Sales by Realtors® $250

500


$200

400 $150

300 $100

200

Charlotte Homes Sold Charlotte Median Sale Price Homes Sold Trendline Sale Price Trendline

100

$50

Oct 2017

Sep 2017

Jul 2017

Aug 2017

Jun 2017

Apr 2017

May 2017

Mar 2017

Jan 2017

Feb 2017

Dec 2016

Oct 2016

Nov 2016

Sep 2016

Aug 2016

Jul 2016

Jun 2016

Apr 2016

May 2016

Mar 2016

Jan 2016

Feb 2016

Dec 2015

$0

Nov 2015

0


600

Source: Florida Realtors® Punta Gorda, Florida MSA; http://media.living.net/statistics/statisticsfull.html

Consumer Sentiment Index Charts 20 and 21 shows monthly data and linear trend lines over the last six years for both the Florida Consumer Sentiment Index (“CSI”) reported by the University of Florida Bureau of Economic and Business Research (BEBR) and for the United States Index of Consumer Sentiment (“ICS”) reported by Thomson Reuters/University of Michigan. The national ICS edged downward from 100.7 in October 2017 to 98.5 in November 2017. The comparable figure for November 2016 was 93.8, and the long-term trend continues to be clearly positive. The November 2017 issue of Survey of Consumers noted that “In contrast to the media buzz about approaching cyclical peaks and an aging expansion, with the implication of greater uncertainty about future economic trends, consumers have voiced greater certainty about their expectations for income, employment, and inflation.” The Florida CSI rose to 96.7 in November 2017, up 1.9 points from the revised October 2017 figure of 94.8, and 6.4 points higher than the November 2016 figure. This data is depicted in Chart 21 below. In the November 28, 2017 edition of Florida Consumer Sentiment Index, it was noted that “[c]onsumer sentiment in Florida started 2017 with a record-breaking figure and reached its highest level in 15 years during the first half of the year. Despite downturns in the second half of the year, the index is now half a point higher than the current year’s average as 2017 draws to a close.”

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Chart 20: U.S. Index of Consumer Sentiment

Source: Thomson Reuters/University of Michigan

Chart 21: Florida Consumer Sentiment Index

Source: Bureau of Economic and Business Research, University of Florida

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Consumer Price Index Chart 22 shows year-to-year changes in consumer price indices (CPI) through October 2017. The rate of consumer price inflation is increasing, with all three depicted areas up by 2.0 percent or more over the prior October. The national index was up 2.0 percent from October 2016 to October 2017; during the previous 12-month period, the national CPI was up 1.6 percent. The U.S. Southern Region CPI also increased by 2.0 percent, compared to 1.5 percent between October 2015 and October 2016. The index for the Miami-Ft. Lauderdale area was 2.7 percent higher than October 2016, compared to 1.9 percent in the prior year.

Chart 22: CPI Annual Percentage Change Consumer Price Index - Percentage Change From Year Earlier 8%

Miami / Ft. Lauderdale

Change From Year Earlier

6%

US South Region US National

4% 2% 0% -2% -4% -6%

Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Source: U.S. Bureau of Labor Statistics

Components of the Miami-Fort Lauderdale Consumer Price Index for the 12 months ended October 2017 are shown in Chart 23. The costs of medical care were up by 8.8 percent over the prior October, followed by an increase of 4.7 percent in housing costs. Transportation as well as Education and Communication prices showed noticeable declines, consistent with previous trends.

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Chart 23: Miami-Fort Lauderdale CPI Component Percentage Change

Source: U.S. Bureau of Labor Statistics

Appendix: Trends in Regional Population, U.S. GDP, U.S. Unemployment, and Industry Diversification The data presented in this appendix are not released on a monthly basis. The first two charts, Charts A1 and A2, show historic population growth through 2015, as well as projections updated annually by the state of Florida’s Office of Economic and Demographic Research, working in conjunction with the University of Florida’s Bureau of Economic and Business Research. The second two charts, Charts A3 and A4, depict historic measures of U.S. GDP growth rates and unemployment as well as projections by the Federal Reserve’s Federal Open Market Committee, while Chart A5 depicts the FGCU Industry Diversification Index for Southwest Florida and the state. Charts A3, A4, and A5 are updated quarterly. Regional Population From 1990 to 2015, regional population growth averaged 2.7 percent per year. The compound average annual rate of growth for 1990 to 2015 was 2.8 percent in Lee County, 3.3 percent in Collier County, 1.7 percent in Charlotte County, 2.1 percent in Glades County, and 1.6 percent in Hendry County. The righthand sections of Charts A1 and A2 show projected population increases from 2016 to 2040. All projected rates of increase are lower than the historic growth rates of 1990 to 2015. Growth for the five-county region averages 1.6 percent per year, resulting in a population increase of 47 percent for the five-county region from 2015 to 2040. This would bring the total to 1,803,526, amounting to nearly 576,000 additional residents. Lee County’s population is projected to grow an average of 1.9 percent per year, Collier County

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at 1.4 percent, and Charlotte County at 0.9 percent per year. Hendry County’s population is projected to grow at an average of 0.3 percent per year and Glades County at 0.5 percent per year.

Chart A1: Coastal Counties Population, 1990 to 2040 Historic and Projected Population Charlotte, Collier, and Lee Counties

1200

Population - Thousands

1000

Historic

Projected 2040 1,055

800

2015 666

Lee

2040 483

600 2015 344

1990 335

Collier

400

2040 210

1990 152

200 1990 111

0 1990

2015 167

Charlotte

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

Source: Office of Economic and Demographic Research

Chart A2: Inland Counties Population, 1990 to 2040 Historic and Projected Population Glades and Hendry Counties 45 40

Hendry

2040 41.6

Population - Thousands

35

2015 38.1

30

Historic

25 20 15

Projected

1990 25.8 2040 14.6

2015 12.9 1990 7.6

10

Glades

5 0 1990

1995

2000

2005

2010

2015

Source: Office of Economic and Demographic Research

21

2020

2025

2030

2035

2040

National GDP and Unemployment Charts A3 and A4 depict both historical trends and the Federal Open Market Committee’s projections for national Gross Domestic Product (“GDP”) and Unemployment. The FOMC’s projections are released quarterly and reflect the assessments of the Federal Reserve Board of Governors and of Federal Reserve District Bank presidents, with the most recent figures shown in the following charts. The dotted lines depict the highest and lowest projections—or the range of all projections—while the darker blue area within the dotted lines depict the central tendency forecast within those projections. Chart A3 shows the recovery in GDP growth following the most recent recession, and current projections close to the normal long-run trend (“LR”). Real GDP growth rates are based on the change from the fourth quarter of one year to the fourth quarter of the next year. The September 2017 forecast projects an increase in GDP growth for the remainder of 2017 compared to the 1.6 percent recorded for 2016. The overall high and low projections (shown as ranges below) for the rest of 2017, 2018, 2019, and the long run showed little change from the projections made in the June 2017 forecast, with the central tendency forecast hovering around the 2 percent mark through 2018 and then falling slightly thereafter. None of the projections achieves the 3 percent GDP measure that economists generally associate with an economy operating with a full employment of resources.

Chart A3: Historic and Projected GDP Growth, 2007 to Long Run

Source: Historical data obtained from Bureau of Economic Analysis. Projected data obtained from Federal Reserve Open Market Committee Meeting Statement, September 20, 2017

Chart A4 depicts the recovery in unemployment following the 2008 recession to levels, beginning in 2016, more closely associated with natural rates of unemployment. Compared to these national numbers, unemployment rates in Florida and Southwest Florida tend to be more volatile, falling lower when national unemployment is falling and rising higher when national unemployment is rising. 22

The September forecast projects continued declines in unemployment through 2019, with an average central tendency forecast close to 4.0 percent for the rest of 2017, 2018, and 2019, and then rising in the long run. The lower range forecast now falls below 4 percent in 2018 and remains there for two years. If the U.S. economy avoids falling into a recession past the summer of 2019—an outcome consistent with the Fed’s projections—then the current expansion will be the longest one observed in 150 years.

Chart A4: Historic and Projected Unemployment, 2007 to Long Run

Source: Historical data obtained from Bureau of Economic Analysis. Projected data obtained from Federal Reserve Open Market Committee Meeting Statement, September 20, 2017.

The next quarterly release of projections for GDP and Unemployment will be released following the FOMC meeting scheduled in December 2017. These projections will be updated in the January 2018 edition of Regional Economic Indicators. Industry Diversification Index The FGCU Industry Diversification Index (IDI) measures the degree to which a region’s workforce is concentrated in few industries or dispersed into many. The IDI is computed quarterly by the Regional Economic Research Institute’s Industry Diversification Project, which tracks industry diversification by Metropolitan Statistical Area, workforce region, and state. (For more details, please go to lutgert.fgcu.edu/IDI). The IDI can be between 0 and 10, with a higher index denoting a more diverse workforce and a lower one denoting a less diverse workforce. Industry diversification is an important factor explaining our state and region’s tendency to overheat during expansions in the business cycle and overcorrect during contractions in the business cycle.

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Chart A5 shows the industry diversification index for the Southwest Florida workforce region and the state of Florida. Southwest Florida shows an increase in industry diversification from the fourth quarter of 2006 to the 3rd quarter of 2008. After 2008, the Southwest Florida workforce region exhibits a seasonal trend, mainly due to the stronger influence of tourism and seasonal residents that visit Southwest Florida during the winter season, increasing the demand for retail trade and accommodation and food service jobs. During the first quarter of 2017, the IDI for Southwest Florida measured at 8.36, and ranked as the 11th most industrially diverse workforce region in the state of Florida. Meanwhile, the state of Florida had an IDI of 8.56, ranking as the 21st highest state in the nation in industry diversification.

Chart A5: Industry Diversification Index, 2000 to 2017 Industry Diversification Index Past Nine Quarters 8.80 8.60

8.48

8.40

IDI

8.50

8.50

8.34

8.25

8.20

8.56 8.56 8.55 8.53 8.50 8.46 8.41 8.36 8.31

8.54

8.48 8.30

8.11 Florida IDI Southwest Florida IDI

8.00

2017 Q1

2016 Q4

2016 Q3

2016 Q2

2016 Q1

2015 Q4

2015 Q3

2015 Q2

2015 Q1

7.80

Historical Trend 9.50

8.50 8.00 Florida IDI Southwest Florida IDI

7.50

Source: lutgert.fgcu.edu/IDP

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2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

7.00

2000

IDI

9.00