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Florida Economy Still Struggling with Housing Issues, But Home Supply is Beginning to Dwindle - BMO Economics
Tourism Showing Signs of Life

• Housing Bust Continues to Hurt
• Tourism-Related Sectors Appear to be Bouncing Back
• Business Bankruptcies Have Dropped Sharply in Recent Months

Tampa (Nov. 17, 2011) – The Florida economy continues to struggle under the weight of the housing bust and the outlook remains depressed, continuing to weigh heavily on economic activity in the State, according to the State Monitor report released today by BMO Capital Markets Economics.

< p>The months' supply of homes for sale has begun a gradual decline in areas like Miami, Tampa and Sarasota, but remains well above normal levels. Florida's real estate market continues to shake off the effects of the housing bust. High inventory levels continue to restrain new construction, as housing starts have run at just a 42,000 annualized pace through September versus peak levels of nearly 300,000 in the peak year of 2006.

Florida's job growth has recently picked up, but employment was still barely (0.8 percent) above year-ago levels in the third quarter. The construction sector continues to shed jobs, down 5 percent year-to-year to the lowest level since 1990. Tourism-related employment, however, has picked up this year after 2010 was marred by the Gulf oil spill. Accommodation and food service jobs are up more than 5 percent year over year after stagnating last year. The jobless rate, at 10.6 percent, remains one of the highest in the country, but has edged down 1.2 percentage points in the past year.

Last year's Gulf oil spill negatively impacted tourism, which was already struggling in the wake of the recession. "Employment in related sectors is staging a solid comeback this year, but overall consumer confidence in the South has slipped again amid financial market volatility," said Robert Kavcic, Economist, BMO Capital Markets. After peaking in mid- 2010, bankruptcy filings have begun a sharp decent in recent months.

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

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

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