The Sunshine State is on the cusp of a recession — if it hasn’t already started.
That’s the opinion of Sean Snaith, an economist who serves as director of the University of Central Florida’s Institute for Economic Forecasting, in his quarterly forecast. However, the impact of a downturn won’t be as severe as the housing market collapse of the late 2000s or the pandemic shutdown of 2020.
“Florida can’t escape a recession,” Snaith says in a news release. “But we won’t suffer like we did during the previous two. If Florida’s economy had been a hospital patient during 2020 or in 2008-09, its condition would have been somewhere between serious and critical. This time around, it will be good or stable — and probably even closer to good.”
Snaith, according to the release, predicts the recession may even yield some relief for residents and businesses, such as an end to the rapid rise in housing costs and alleviating supply-chain woes on everything from automobiles to appliances. The state has already seen a decline in oil and gas prices, which, when coupled with sky-high housing and food prices, were a severe strain on Floridians’ budgets.
Snaith does not expect Florida to experience large payroll job losses or very high unemployment rates as in the previous two recessions, but a mild recession will affect the labor market starting in 2023 and continuing into 2024.
Other key predictions from Snaith’s latest report:
- From 2023 to ’26, Florida’s economy, as measured by real gross state product, will expand at an average annual rate of just 0.6%. However, real personal income growth will average 2% during 2023-26, and Florida’s average growth will be 0.3 percentage points higher than the national rate over the next four years.
- Labor force growth in Florida will average 0.8% from 2023 to ’26. After growing 3% in 2022, Florida’s labor force growth will decelerate because of the recession in 2023-24, then accelerate in the final two years of our forecast.
- Florida’s unemployment rate fell to 4.6% in 2021 and then to 2.9% in 2022. The recession will push up the rate to 4.6% in 2023 and to 5.8% in 2024 before easing slightly to 5.4% in 2025 and 5% in 2026.