Many economic forecasts for next year predict improvement in the national economic outlook. I would agree with this overall national assessment based on the length of the current downturn and the increased federal government spending. However, the Central Florida region and its economy will continue to be adversely impacted by an over reliance on population growth and tourism to grow the local economy. Whether we like it or not, these are the main two engines that have, and will, continue to drive the local economy in the near future. Future economic diversification attempts such as the Lake Nona medical city will help pay dividends with a more sustainable economic growth model for our region, some of which we will see as soon as next year.

The excess supply of previous construction coupled with flat population growth has caused a severe downturn in the local construction industry. As the amount of excess inventory is reduced along with corresponding lower prices, a leveling out should start to take place in the next year. Interest rates are very affordable, but lenders continue to be cautious in who they approve for money.
The tourism industry is struggling with reduced overall visits and amount of spending per visit. As the national and world economies improve, the tourism industry is expected to rebound quicker. Central Florida remains one of the premier and affordable tourist destinations in the world. Continued investment by our tourism industry leaders, like Walt Disney World and Universal Orlando, is vital to maintaining growth in the future.

As the title of this article suggests, follow the money to see which other industries will rebound the quickest. Right now the only sector of the economy spending increased amounts of money is the federal government. So, continue to follow news on healthcare reform, industry subsidies, educational support and any other industry sector our federal government has decided to spend more money on. Stimulus money for infrastructure and green projects should start to make more of an economic impact in Central Florida as the pipeline of funds out of Washington starts to increase. For example, automobile lots in Central Florida were a ghost town and then when “cash for clunkers” came along, there was an immediate sales boost.

The most promising economic opportunity on the horizon for East Central Florida is the medical city project. Although, some of the construction projects have been delayed or slowed down, there is no doubt this economic development is the kind of diversification our economy desperately needs. In addition, the UCF Technology corridor will continue to pay dividends with high paying research and defense industry jobs.

Central Florida will remain a desirable place to live, work and play with our great location, low taxes, and warm weather (like August). However, a somewhat painful transition will need to be made from our government leaders on eschewing growth for growth sakes to smart growth. Make sure you support leaders who understand this challenge and are willing to work towards the goal of a more diversified economy which will benefit all of us.

Article by Barrett Haus

Barrett Haus provides independent (through his own companies) financial and tax advising for businesses and individuals. He can be reached at 407-222-5120 or barrett@hausfinancial.com. For more informaiton, visit his Web site at www.hausfinancial.com. If you would like to receive his e-mail newsletter updates (every 2-3 months) send an e-mail and you will be added to the distribution.