Even as the threat of a COVID-19 resurgence with the Omicron variant threatens the economic recovery in U.S. this winter, Florida’s economy remains strong as it prepares to head into 2022.
“Florida's economy continues to battle its way back from the pandemic-induced recession,” Wells Fargo Corporate & Investment Banking said in report released in late November.
“The Sunshine State added 41,500 jobs in October, with private sector payrolls adding a slightly larger 44,300 jobs. Florida's unemployment rate fell 0.2 percentage points to 4.6%, as the number of employed Floridians rose slightly faster than the civilian workforce,” Wells Fargo said.
Florida has seen 18 straight months of private-sector job growth, up 5.7% over the year. The state has also experienced 12 consecutive months of labor force increases, up 5.8% over the year, and higher than the national rate of 0.5%.
Since April 2020, Florida has gained a total of 1,111,000 private sector jobs, recovering 89% of the jobs lost during the pandemic.
Florida continues to see significant increases in its labor force, up 579,000 over the year as people returned to work. Florida’s unemployment rate fallen by 1.2 percentage points over the year.
October data indicates many job opportunities still exist, with more than 518,000 positions being posted online.
Still, the shadow of coronavirus hangs over the state’s recovery as the new COVID-19 variant called Omicron emerges around the world.
If new vaccinations or boosters are needed to fight this new threat, President Joe Biden said Monday that the government would help accelerate their development.
“We do not yet believe that additional measures will be needed,” he said, adding the White House on Thursday would come out with a detailed strategy to fight the virus this winter. He said it won’t include lockdowns, but rather vaccinations and testing.
Since the pandemic began in 2020, Florida has experienced about 3.7 million COVID-19 cases with over 61,000 deaths reported. Florida's per capita death rate of 285 per 100,000 residents is more than 20% higher than that of the United States, according to Johns Hopkins data compiled by the financial Times.
However, last week Florida reported the lowest cases per capita in the country, with a daily average of 1,393 cases, or six per 100,000, a 2% decline over the prior two weeks.
Wells Fargo noted that hiring rebounded the fastest in the state's hardest-hit sectors, such as leisure and hospitality, which saw 16,600 new jobs, and in the retail trade, which saw 7,500 new jobs last month.
“The gains reflect continued strength in travel and tourism and optimism about the return of international travel. Visit Florida recently announced that Florida hosted a record 32.5 million visitors during the third quarter, topping last year by 60.4% and slightly edging out the number of visitors the state hosted during the third quarter of 2019,” Wells Fargo said.
Domestic travelers accounted for 96% of Florida's third quarter visitors, with overseas visitors accounting for most of the rest.
Visit Florida said the third quarter saw 31.2 million domestic travelers — and added there were about 1.2 million foreign visitors, a gain of 597% from 2020.
On Nov. 8, the Biden administration removed COVID-19 travel restrictions for many countries, including European nations that are a strong inbound travel market for Florida, by allowing vaccinated travelers to enter the U.S., though Omicron threatens
With tourism rebounding, employment in Orlando has surged, rising the most out of the state's 24 metropolitan areas. Orlando added 82,900 jobs since last October while Tampa-St. Petersburg-Clearwater ranked second with 75,500 new jobs. Miami followed with 69,300 jobs, along with Fort Lauderdale with 33,600 and Jacksonville with 29,900.
Analysts noted there is more to Florida's economy than just tourism.
“Florida's large financial services and tech sectors have been two of the greatest beneficiaries of relocations away from New York City and the San Francisco Bay Area during the pandemic," Wells Fargo said. "The financial activities sector added 2,900 jobs in October, which is roughly on pace with the 31,000 jobs it added over the past year.
"Much of that growth has been in Florida's booming real estate sector. Wealth management and specialized finance is another key growth area, particularly in South Florida. Florida's tech sector was booming prior to the pandemic and has gained considerable momentum over the past year, particularly in South Florida and Tampa,” Wells Fargo said.
Florida's strong labor force growth is backed up by other surveys that show Southern locations rank among the top destinations for new job seekers.
According to LinkedIn’s migration
Issuers in Florida sold $15.3 billion of debt in 2021 as of Nov. 30, according to preliminary data from Refinitiv. This ranks it as the fifth highest state in the nation in bond issuance.
Gov. Ron DeSantis pointed out that S&P Global Ratings in November affirmed the state’s general obligation bonds at AAA, noting that Florida’s rating is higher than the AA-plus assigned to the United States. Florida is also rated Aaa by Moody’s Investors Service and AAA by Fitch Ratings.
“This AAA rating reaffirms that Florida is leading in responsible governance and the Florida economy is continuing to grow and thrive,” he said, adding that Florida’s rating is also higher that other big states such as California, rated AA-minus, and New York, rated AA-plus.
“With 2022 in sight, Florida's economic outlook continues to surprise to the upside from our initial expectations following the onset of the pandemic more than a year ago,” S&P said in its report affirming the state's rating. “With ample reserves and support from extraordinary federal aid, the state managed through peak recessionary winds and is well positioned, in our view, to continue to benefit from the economic recovery seen across the country.”
It added that the state’s GOs “are eligible to be rated above the sovereign because we believe the state can maintain better credit characteristics than the U.S. in a stress scenario.”
Still another wild card for the state is the threats posed by numerous environmental factors.
According to an S&P report issued in September, the effects of climate change and rising sea levels pose credit quality risks for Florida issuers.
Florida's long coastline, low elevation and susceptibility to severe weather events increases its environmental risks when compared to most other states, S&P said.
In June, the governor signed the state’s $101.5 billion budget for fiscal 2021-2022, a $9.3 billion increase from the previous fiscal year.
