Down so long that things are looking up
By many measures, Florida’s economy has turned around some since the the pandemic’s deepest hits…
By many measures, Florida’s economy has turned around some since the the pandemic’s deepest hits in the early spring. The unemployment rate is less than half of what it was in March, state sales tax collections have picked up and Florida home sales are stronger than they were this time last year.
But the rate and scope of further economic progress, experts say, will depend on the success of vaccine distribution and whether recently approved federal financial relief is enough to stave off another downturn.
One of the main economic themes that has emerged during the pandemic is inequality. Industries relying on in-person contact, such as leisure and hospitality or service positions, were dealt the greatest blow as governments capped indoor capacity and customers chose to stay home. And many of those jobs pay poorly to begin with, so people in them were less likely to have adequate savings as a buffer from the storm.
Meanwhile, many white collar employees have transitioned to remote work more easily. Their employers have been able to keep more of them on the payroll as a result.
Employment numbers reflect this trend. Services make up the bulk of job losses in Florida compared to this time last year.
One bright spot in the economy is home sales. Many consumers are spending less during the pandemic because they are staying home, leaving them more money for down payments on large purchases, such as homes. But mortgage delinquency rates concern housing experts.
Despite health officials warning against traveling for the holidays, Tampa International Airport had the greatest number of passengers since the pandemic began. That number is still half what it was the previous year, and the area’s hotels continue to struggle to surpass an average hotel occupancy rate of 50 percent.
The charts below reflect the most recent data available and generally don’t capture the holiday season. It will be another month or more to see where Florida stood at the end of 2020.
Florida’s unemployment rate plateaued in November at 6.4 percent after hitting its lowest level since March. While the jobless rate is significantly lower than its March high of 14.5 percent, it is still significantly higher than pre-pandemic levels. Getting back to that level depends on a number of factors, economists said. Until there is a vaccine, Florida’s hardest hit sectors will not be able to return to their full force. Tourism and service jobs all rely on in-person interactions, which have been heavily curbed with pandemic restrictions aimed at slowing the spread of COVID-19. Some areas, such as government employment, are weakening as state budgets strain under declining revenue.
Florida’s ailing unemployment system was overwhelmed during the pandemic as a tsunami of claims rolled in. Federal data shows that Florida was the second-worst state for paying unemployment benefits in a timely manner. Just over a third of Floridians who filed for unemployment got their first payment within three weeks, and just 28 percent of unemployment claims were paid on time between April and June. Both are a far cry from the “acceptable” rate the Department of Labor designated — 87 percent of claims paid within three weeks.
Bankruptcies across Florida continued to drop in November. Like many other economic indicators, bankruptcies peaked early in the pandemic at 3,793 cases. The state’s current count is down 31 percent from its peak and 26 percent lower than it was the same time last year. Last month the bankruptcy court for Florida’s middle district, which is the largest in the state, saw its lowest number of bankruptcies filed in more than a year, down 19 percent from the month before.
Despite broader economic uncertainty, the real estate market continued to charge ahead this fall, with ferocious demand and extremely low inventory continuing the hyper-competitive environment.
One St. Petersburg real estate broker, Lou Brown Jr., noted in November that a sign of the market’s fast pace is the fact that he’s been hearing from homeowners who’ve been receiving texts, postcards and other solicitations from investors trying to buy their houses.
The hyper-competitive real estate market has continued to result in rapidly rising home prices. These have added to concerns about affordability, especially for first-time buyers.
Through November, mortgage delinquency rates still remained stubbornly high when compared to pre-pandemic levels, worrying some in the real estate industry that a wave of foreclosures could be looming.
However, not all the homeowners with delinquent mortgages are at immediate risk of foreclosure. These percentages represent the portion of total mortgages that are considered delinquent, including homeowners who have forbearance agreements with their lenders to delay payments in order to avoid foreclosure.
Despite the fact that there are fewer protections against foreclosure for some homeowners — leaving those without federally backed mortgages particularly exposed — the number of foreclosures in Florida and Tampa Bay have still remained low, even compared to pre-pandemic levels. That’s according to numbers from real estate data firm ATTOM Data Solutions.
There are still federal programs in place to prevent foreclosures for many homeowners with federally backed mortgages — one likely reason for the suppressed figures.
They ticked up from historic lows in July, the same time that Gov. Ron DeSantis lessened the protections of the state’s eviction and foreclosure moratorium, allowing courts to resume foreclosures except for homeowners who were financially harmed by the pandemic.
Tourism and Travel
The latest Florida sales tax collections shows consumer spending outpaced what it was over the same period last year, according to the state’s latest reports. October’s sales tax revenue — which reflects what was collected over the prior month — beat last year’s rate over the same period by 3 percent. That boost came after September’s tax revenue report, which reflects August’s collections, had been down by about 4.5 percent.
The two most recent revenue reports capture back-to-school shopping and the state’s sales tax-free holiday weekend on school supplies. Upcoming tax revenue reports will show how holiday shopping matches up to the prior year’s spending rates. The holiday shopping period is usually when the state collects the largest amount of tax revenue it uses to pay for state projects.
Despite health officials warning against air travel over Thanksgiving, Tampa International’s recent bump in passengers is likely reflection of holiday travel. About 100,000 more people passed through Tampa International Airport in November than they did the month prior.
Despite the holiday uptick, the airport’s numbers are nowhere near what they were prior to the pandemic. Even with the uptick in November, the monthly total was down 55 percent compared to last year.
The bump in air travel seemingly didn’t have much of an effect on local hotel stays. Occupancy rates continue to hover around a 50 percent, according to industry analyst STR, Inc.
The average hotel occupancy rate for Tampa Bay just barely broke above 50 percent for the first time since March during October, but then fell again the next month. Tampa Bay hotels have been struggling to reach pre-COVID rates without the return of business travel, especially during weekdays. Hotels in Pinellas County, especially those close to the beach, have performed near normal rates. Those in Hillsborough have struggled more without conventions and other mass gatherings that usually fill their beds.
Overall, Tampa Bay hotels are performing better than much of the rest of the country. Local hoteliers still missed out on their peak season over spring break, when the the onset of the pandemic brought occupancy rates to all-time lows. As the one-year mark of one the pandemic approaches, hoteliers are anxious to see how the pandemic affects what is supposed to peak season once again.
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