Where Growth is Headed
If you want your business to go where the growth will be, it's pretty obvious: You don't have to look far. Florida continues to be one of the nation's fastest-growing states. And judging from the economic models of Florida forecasters and trend watchers, that's not likely to change - for another 20 years.
But that doesn't mean all areas of Florida will grow equally. Indeed, if you study the three-year commercial construction projections and forecasts of Fishkind & Associates, the Orlando-based econometrics firm, you can easily see big differences in growth up and down the Gulf Coast.
For the most part, the differences are predictable: The most populous counties in Florida - even in spite of people's preferences to avoid crowds and traffic - have always attracted the largest numbers of new residents, the most job starts and therefore the most construction. This is borne out in the accompanying tables.
Over the three-year horizon of 2004 through 2006, for instance, Fishkind's projections show the nine counties named in the accompanying tables will generate total new commercial construction almost in concert with the counties' ranking by population. There are two exceptions. Polk County, the fourth most populous county on our list, is expected to add more commercial space than Lee County, the third most populous county. The reason Polk will outgrow fast-growing Lee County in commercial construction can be found in Fishkind's projections for new warehouse space. Over the next three years, Polk County is expected to add 4.7 million square feet of warehouse space versus Lee County's 1.08 million square feet.
This is not surprising. Polk County is situated on Interstate 4 between Tampa Bay and Greater Orlando - an attractive location for warehouse and distribution operations.
The other exception is Pasco County. Even though it is the fifth most populous county on our list, Fishkind's projections show Pasco will rank seventh in total commercial construction over the next three years. This can be attributed to Pasco County's immaturity as a market. Pasco is one of Florida's booming bedroom counties, a bedroom to St. Petersburg and Tampa. As such its population has increased 10% since 2001. But as a bedroom community, it's not expected to add a lot of warehouse and industrial space.
Look more closely at the tables on page 15A. Fishkind is projecting fast growth in retail space construction in Lee and Pasco counties. Again, these projections are in line with recent historical trends. Like Pasco, Lee County has been one of the fastest-growing counties on Florida's Gulf Coast. Again, that can be attributed to its bedroom-community nature. Both counties have more affordable housing than the neighboring counties of Hillsborough, Pinellas and Collier.
You probably noticed this, too: Sarasota County typically ranks in the middle of the pack. The one exception is in office space. Fishkind's projections show that Sarasota County is expected to add the third-highest amount of commercial office space between this year and 2006. But even that's relative. Hillsborough and Pinellas, the leaders in office construction, each is expected to add more than 3.4 million square feet of office space. Sarasota County, on the other hand, is expected to add about 1.3 million square feet of office space, less than half the amount of the region's leading counties.
How reliable are Fishkind's projections?
Stan Geberer, a senior Fishkind economist, acknowledges: "For certain, things won't happen exactly that way" - as spelled out in his company's projections. "The forecast really predicts average levels over the forecast horizon. On average, it's a pretty good view of what we can expect over the forecast horizon."
Geberer says Fishkind's commercial space forecasts take into account a variety of factors. "There are two ways to get at the forecast," he says. "You can look at all the things that cause demand, such as population growth and job growth, or you can look at empirical supply and say: 'We supplied that in the past, so we'll supply that in the future.'
"But it becomes complicated," Geberer says, "when you try to predict supply based on demand. Supply is dependent on other factors than just demand. It's dependent on vacancy rates, interest rates or maybe some local factors, such as an expansion at the port."
Bottom line: As you study the tables on 15A and 16A, view them not year by year, Geberer says. Rather take in the three-year horizon as a prediction of what the averages are going to be.
FISHKIND'S 3-YEAR FORECAST
FOR COMMERCIAL SPACE
The following tables show the total amount of new commercial space, listed by category, that is expected to be added in nine counties surrounding Tampa Bay and down the Gulf Coast of Florida. The estimates are from the Orlando econometric firm of Fishkind & Associates.
RETAIL (in thousands)
FISHKIND'S COMMERCIAL SPACE FORECAST BY COUNTY, BY CATEGORY
Fishkind & Associates' annual Econocast projects year-by-year estimates on the amount of commercial space that is expected to be built in each county. The data reflects Fishkind's forecast of a Florida economy that will continue to gain momentum in commercial construction through 2005.
As you examine the data, you'll notice the forecast shows commercial construction slowing down from 2005 to 2006. Fishkind's projections show six of the nine counties listed below adding less commercial space in 2006 than in 2005.
CHARLOTTE COUNTY2004200520063 Yr. Total
Commercial Const. (Sq Ft)709,502765,545776,7262,251,773
Commercial Const. (Sq Ft)1,920,3032,056,3172,054,2356,030,855
Commercial Const. (Sq Ft)6,620,1667,121,3406,984,16720,725,673
Commercial Const. (Sq ft.)2,496,5872,434,7952,462,5657,393,947
MANATEE COUNTY2004200520063 Yr. Total
Commercial Const. (Sq Ft)1,658,7141,675,4111,652,7924,986,917
Commercial Const. (Sq Ft.)1,665,5791,778,2301,767,1115,210,920
Commercial Const. (Sq Ft)4,374,6454,502,7734,499,18413,376,602
Commercial Const. (Sq Ft.)3,275,4273,402,4413,192,7819,870,649
Commercial Const. (Sq Ft)2,127,3582,240,1002,216,6066,584,064
SOURCE: Fishkind & Associates