Two leading economists are cautioning that job growth will slow in 2019 locally and statewide.
Overall, however, the economists are bullish on the area’s prospects for this year.
“It’s a very hot economy,” said Stu Hoffman, senior economic advisor for The PNC Financial Services Group (NYSE: PNC). “The momentum which was also true in the United States in 2018 is still very strong.”
If Florida was a stock, it would be considered a strong buy, said Mark Wilson, president and CEO of the Florida Chamber of Commerce, which held its annual Economic Outlook and Jobs Summit in Orlando Monday.
Local unemployment was around three percent at the end of 2018, lower than the national average, which was just under four percent, Hoffman said. Wage growth nationally topped three percent, the best gain in 10 years, and Hoffman expects that to continue this year.
“Not only are more people going to be working, but they are going to get a little fatter paycheck in a tight job market and with inflation pretty low, at or below the Fed’s 2 percent target, those wages stretch a little further in terms of more than keeping up with inflation,” Hoffman told St. Pete Catalyst after visiting PNC clients in the area on Jan. 10.
While job growth locally outpaced the national average, Hoffman sees a slowdown in jobs created this year. So does Parrish at the Florida Chamber.
Florida had a 2.8 percent job growth over the last year, making it the No. 1 state in the Southeast for job creation, the Chamber said. Parrish projected the state would add 150,000 additional jobs this year, a lower number than the 241,600 jobs added in 2018.
Both Hoffman and Parrish cited concerns about the possibility of a trade war, tariffs and the global economy.
“When job creators see uncertainty in financial or international markets, they are less likely to invest,” Parrish said.
To mitigate potential threats to the state’s economy, the Chamber said Florida should continue to focus on diversifying its economy, attracting and retaining a talented workforce, and welcoming new business and innovation.
Tampa and St. Pete government leaders and economic developers have put a lot of emphasis on growing the technology sector, with its high-skill and high-wage jobs. That’s true for every state and local area, Hoffman said
“It’s been growing all over the country so it’s hard to say that it’s had outsized growth in this region, but in terms of long-term health to the economy, technology coming out of the universities, the incubators and entrepreneurship is what everyone wants to do, and this region seems to be doing it fairly well,” he said.
Although many other economists have said an economic downturn is likely this year or next year, PNC does not see recession as looming or imminent, Hoffman said. The Florida Chamber said the probability of recession is 20.6 percent over the next nine months.
The federal government shutdown could have an impact if it’s not resolved soon, Hoffman said.
“The longer this drags on, the more it will hurt the economy and the madder and madder the public will get and maybe the message will be enough is enough, get the government back open,” Hoffman said. “That message is being delivered, but it will work if this drags on for more than a couple more weeks.”