UF Economists Predict Slower Long-Term Economic Growth For Florida

September 2, 1998

GAINESVILLE — Slower population growth will lead to slower economic growth as Florida enters the 21st century, but the Sunshine State will still fare better than the nation, a new University of Florida study finds.

“The slower percentage growth rates of employment, income and sales are related to slower population growth,” said David Lenze, associate director for the forecasting program at UF’s Bureau of Economic and Business Research, which did the study. “Population growth rates in the forecast will be the lowest in the 80 years from 1930 to 2010. Similarly, employment growth will be rather low, but the Great Depression will retain its notoriety. And the real taxable sales growth rates of 3.5 percent (2000-2005) and 3.7 percent (2005-2010) will be the weakest ever.”

From 1995 to 2010, the state’s employment will grow an average of 2.2 percent per year, down from 3.5 percent between 1980 and 1995, but above the 1.3 percent expected for the nation, Lenze said.

During this same period, real per capita income growth — a measure of the average Floridian’s standard of living — also is forecast to decelerate, from 1.5 percent to 1.4 percent per year, and growth of real taxable sales is expected to slow, too, he said.

The population and economic slowdown result in part from a decline in net migration to Florida, brought on by changes in the age distribution of the U.S. population, Lenze said. “There are fewer people retiring these days and there are fewer young people, the two groups with the highest migration rates,” he said.

Between 1995 and 2010, Florida is expected to gain only 3.7 million new residents, compared to the 4.4 million it added between 1980 and 1995, he said.

Flagler, Sumter, St. Johns, Osceola, Glades and Collier will be the fastest growing county economies in Florida for the next 15 years, from 1995 to 2010, with average annual job growth exceeding 3.7 percent, Lenze said. The state’s slowest growing counties during the same period are Franklin, Gadsden, Baker and Taylor, with employment in each growing less than 1.4 percent a year, he said.

Although the general trend is for job growth to slow, unemployment rates also will fall slightly, averaging only 5.5 percent from 1996 to 2010, down from 6.6 percent between 1981 and 1995, he said.

The opening of new prisons, the rapid expansion of the health-care industry and faster growth of the school-age population will help fuel government job growth, Lenze said. After increasing by only 14,000 in the early 90s, the number of teenagers between 15 and 19 years old is forecast to expand by 135,000 between 1995 and 2000, strongly increasing demand for high school teachers, he said.

Although Dade County is expected to gain the most new residents between 1995 and 2010 (342,000), Orange County gets the most new jobs (289,000) and Palm Beach County has the largest real personal income increase ($20.4 billion), he said.

North Florida will exhibit the widest extremes in real per capita income growth rates, Lenze said. The inflation-adjusted income growth of the average resident in Clay, St. Johns, Santa Rosa and Holmes counties will be among the state’s fastest, while that in Suwannee, Madison, Baker, Gilchrist and Gadsden counties will be the slowest, he said.

The number of large metropolitan counties — those with at least half a million residents — will increase to 11 by 2010 with Brevard, Polk, Lee and Volusia joining Broward, Dade, Duval, Hillsborough, Orange, Palm Beach and Pinellas counties, he said.