A global economist for a prominent independent investment research firm based in Sarasota County says there’s a 60% chance the U.S. will be in a recession by summer or fall 2023.
That technically would be the second recession in less than two years, given GDP in the U.S. fell 1.6% in the first quarter of 2022 and 0.9% in the second quarter. Most economists and government officials have traditionally defined a recession as two straight quarters of negative GDP.
Recession semantics aside, there are several reasons to be optimistic, says Economic Development Corp. of Sarasota County President and CEO Lisa Krouse, at least about the local outlook. One of the biggest reasons for optimism? Krouse says the EDC is currently working with 70 businesses nationwide seeking to relocate to Sarasota County. With a business-friendly climate, no state income tax, the beaches and more, Krouse adds, “there isn’t a whole lot of convincing we have to do.”
Krouse and the economist, Alejandra Grindal, chief economist at Nokomis-based Ned Davis Research, were speakers at a recent event in Sarasota hosted by the Tampa Bay Chapter of the Association for Corporate Growth. The event, held April 12 at the Field Club, was entitled “Exploring the Macro and Micro Economic Environment.”
Recession questions — are we in one or not, and if yes, where and for how long? — continue to linger in the business community and beyond, acknowledges Grindal, a member of the National Association for Business Economics. She cited the April Small Business Optimism Index report and survey from the National Federation of Independent Business to highlight business owners’ anxieties.
The report, say NFIB officials, “underscores the financial toll inflation and a difficult labor market” are having on small businesses. Overall, NFIB’s national Small Business Optimism Index decreased 0.8 points in March to 90.1. That marks the 15th consecutive month below the 49-year average of 98, the organization says. Nearly a quarter, 24%, of business owners report inflation as their single most important business problem, down four points from last month. Small business owners expecting better business conditions over the next six months, the report found, remain at a net negative 47%.
“It’s hard for small business owners to stay positive when they’re dealing with so many economic challenges,” NFIB Florida Director Bill Herrle says in the report. “They’re doing everything they can to weather this economic storm and emerge stronger on the other side, but it isn’t easy.”
Taking the conversation global, Grindal, at the ACG event, says “there are actually parts of the world that are doing better than the U.S. and a lot of that has to do with China.”
Grindal says China, after ending its zero-Covid policy in December, is poised to grow its economy by 5% this year, coming off 3% growth in 2022. Some European countries, she adds, are also growing post-Covid.
Back in the States, recession fears have been goosed not only by inflation, but with recent bank struggles. While Grindal says a full-blown banking crisis was averted after the recent collapse of Silicon Valley Bank, the deposit situation it created can be troublesome. That situation? With the issues at SVB and New York City-based Signature Bank, many people have been looking to move deposits out of banks and into money market funds. When banks have less deposits of which to generate loans and profits, Grindal says, that can lead to tighter lending protocols. “And when that happens,” she says, “you get a recession.”
In contrast to national worries, Sarasota County, says Krouse, is set to continue being a statewide, and even national leader, in economic growth. Krouse says North Port, in south Sarasota County, is “growing like gangbusters,” with several new projects, and Venice is also growing rapidly. That area includes Wellen Park, a master-planned community that’s been adding retail and commercial projects to complement an increase in new homes.
Other wins in Sarasota, Krouse says, include online video platform Rumble recently opening its headquarters on Longboat Key, with plans to add 140 employees; a $200 million downtown Sarasota bayfront park dubbed The Bay; a $92 million expansion project at Selby Gardens; the $800 million Residences at St. Regis project on Longboat Key; and forthcoming demolition of the Hyatt Regency in downtown Sarasota to make room for a Hyatt-branded Thompson Hotel.
“Is there any part of Sarasota County that will look the same 10 years from today? I say no,” Krouse says. “We are witnessing a really big transformation in this county.”
Krouse, a current board member and former longtime human resources and legal executive at Lakewood Ranch-based FCCI Insurance Group, points out that while there is optimism, there are also challenges. Many business owners the EDC hears from, she says, worry specifically about workforce housing and talent availability for growing business — challenges seen in many other parts of the region.
“There are conflicts that come up a lot,” she says.
Mark Gordon is the managing editor of the Business Observer. He has worked for the Business Observer since 2005. He previously worked for newspapers and magazines in upstate New York, suburban Philadelphia and Jacksonville.