Jacksonville economic indicators lag behind rest of the nation

National economic indicators are pointing to a pickup in growth after the holidays, but local indicators show that Jacksonville may continue to lag behind the rest of the country.

The Conference Board, a New York research firm, said Thursday that its Leading Economic Index for the U.S. rose by 0.5 percent for the second straight month in October. That’s the fourth straight rise in the index that is designed to predict economic conditions several months ahead.

But the University of North Florida’s Local Economic Indicators Project (LEIP) reported that its leading index for the Jacksonville area fell by 0.31 points last month to 103.66, reversing a 0.80-point rise in September. That continues an up-and-down trend for the Jacksonville index that has risen five times and dropped five times in the first 10 months of the year.

The report on economic indicators follows another LEIP report Wednesday that its Consumer Price Index for the Jacksonville area fell in October for the seventh time this year, showing that businesses are keeping prices down because of weak consumer demand.

“The combination of our negative LEI and CPI values in October locally is not good news. The local area continues to lag the national recovery,” UNF economist Paul Mason said.

One negative trend in the Jacksonville area was a 400 person increase in new applications for unemployment insurance in October, after three straight monthly declines in new unemployment claims.

Nationally, the Conference Board said its index of coincident indicators, which measures current economic activity, rose 0.1 percent in October after being unchanged in August and September. However, the research group said the October leading indicators suggest that the slow growth may start to speed up.
The research group said the October leading indicators suggest that the slow growth may start to speed up.

“Expect modest holiday sales, driven by steep discounting. But following a post-holiday lull, the indicators are suggesting a mild pickup this spring,” Conference Board economist Ken Goldstein said in a news release.

Florida Times Union - November 18, 2010
http://jacksonville.com/business/2010-11-18/story/jacksonville-economic-indicators-lag-behind-rest-nation

Scott's "7-step plan" creates 700,000 jobs in 7 years

Governor Elect Rick Scott's plan for getting Floridian's back to work

1. Implement Accountability Budgeting

• Transparent, outcome-based budgets
• Biennial budgets that will allow an adequate review of the budget’s goals and give the public time to participate in the budget process
• Spending limits that ensure affordable government expenditures levels AND focus on economic growth not government spending
• Return Florida’s state and local government expenditure burden to at least the 2004 level
• Refuse temporary funding from the federal government that creates permanent spending

2. Reduce Government Spending
Balance the budget – without one-time revenues, borrowed funds, temporary funds, or tax increases.
Implement outcome-based budgeting to create budgeting efficiency throughout government, including:

• Align pension reform with state employee pension contributions in other states to save almost $1.4 billion. Currently Florida workers do not contribute towards their retirement.
• Pay competitive market-based salaries for corrections’ staff, use inmate labor to grow prison food, and competitively bid health care contracts to reduce prisoner costs by $1 billion.
• Impose more stringent standards on non-compliance with work requirements and require drug screening for welfare recipients. This could save Florida $77 million.
• Use common sense business solutions to reduce the cost of government through operational efficiency saving upwards of $500 million (per Florida Taxwatch). Reduce state workforce by 5 percent to save almost $300 million.
• Reform health care for Medicaid recipients (through a waiver) and state employees (consumer directed care) to save taxpayers’ $1.8 billion.
• Veto Pork Barrel Spending and unnecessary pork barrel projects.

3. Enact Regulatory Reform

• More affordable unemployment benefits
• Implement tort reform to limit frivolous lawsuits
• Impose a regulatory freeze and implement a comprehensive review of existing and proposed regulations
• Review state development regulations and expedite permits for job-creating businesses, such as Enterprise Florida’s targeted industries
• Reform Pubic Service Commission (PSC) processes to allow reasonable energy production and expansion
• Lower workers’ compensation costs - a 35% reduction in costs would save businesses about $2.46 billion
• Bring health insurance costs and mandates in line with the U.S. average
• Address Florida’s relatively expensive electricity costs to save businesses approximately $3.25 billion

4. Focus on Job Growth and Retention

• Ensure local economic development offices have the right resources and trained specialists to assist their local businesses with obtaining state and federal grants and complying with state and local regulatory processes
• Eliminate overlapping economic development agencies, and have one group serve as the statewide recruitment agency to assist local economic development agencies.
• As governor serve as the state’s chief economic development officer, working with existing as well as potential businesses every day to create jobs
• Make economic development programs more flexible to allow existing businesses to expand in their own unique ways and invest in the state Innovation Fund that brought Scripps and Burnham research labs to Florida.
• Nurture cutting-edge technology clusters – such as the biotechnology cluster in Orlando that creates over $7 in economic returns from every $1 invested.

5. Invest in World Class State Universities

• Invest in university research, laboratories, business incubators, and technology transfer
• Connecting the research conducted by each of Florida’s university to the state’s economic development process
• Leverage the research strengths of the state’s universities to invest in new and emerging technologies
• State economic development grants will always include partnerships with universities to develop research strengths into unique clusters, such as biotechnology

6. Reduce Property Taxes

• Reduce the statewide property tax (RLE) by $1.4 billion (from 5.29 mills to 4.29 mills, a 19% reduction in RLE).

7. Phase out the Business Income Tax

• Total state tax revenues will benefit from the dynamic economic growth created from the corporate income tax phase-out

More details about the 7-7-7 plan can be found at http://www.rickscottforflorida.com/home/turn-florida-around/

St. Pete Time PolitiFact.com says Scott's job plan promises are mostly true.
The Ledger.com says Scott's Plan may not pan out.

Regional resilience: Bouncing back from disaster - economic, natural, and social

Regions able to bounce back from, adapt positively to, or withstand negative, external shocks that throw a metro area off course are regionally resillient and have the following characteristics.

Strong and diverse regional economy: A diversity of major “export” industries, low reliance on durable goods manufacturing, and a relatively small gap between the incomes of high- and low-income residents help a region withstand or avoid negative economic shocks.

Large shares of skilled and educated workers: Workers with skills and higher levels of formal education have greater capacity to learn new skills and adapt to the changing needs of an economy. Regions with high percentages of highly-educated people are better able to withstand or avoid negative economic shocks.

Wealth: A community with funds, whether government, private, philanthropic, or individual, can help provide adaptive cushion and resources to invest in rebuilding, reconstruction, reforms, and needed capacities.

Strong social capital: A community with strong attachment to place, strong citizen participation and community engagement, and social cohesion between groups and individuals is more resilient.

Community competence: The ability of a community to solve problems, identify creative solutions, have nimble policies and institutions, and build strong political partnerships can all be critical tools to help a metro area adapt to and rebound well from a shock.

Thriving after the (economic, social, and natural) disaster after the storm in the seven-county, Post Katrina, Post Oil Spill, Post Recession New Orleans region means building a more prosperous community as defined by the following goals.

• Quality economic growth that boosts productivity, spurs innovation and entrepreneurship, and generates quality jobs and rising incomes;
• Inclusive growth that expands educational and employment opportunities, reduces poverty, and fosters a strong and diverse middle class;
• Sustainable growth that conserves natural resources, maintains environmental quality, and increases the safety of the area; and
• High quality of life for residents and businesses that often includes a package of strong amenities and quality public services, like good schools and safe streets.

Do these or similar goals seem make sense for the Jacksonville Region?

 Selected key actions for a more resilient New Orleans that may apply to the Jacksonville Region.

Responding to the BP Oil Spill and the Great Recession

• Diversify and strengthen the key regional “export” sectors of the economy. Tap into the area’s expertise in energy and higher education research capacity on renewable energy; challenge and encourage the growing network of entrepreneurs to identify bold, sustainable business ideas that strengthen core industries; and accelerate the transition to innovation-fueled, knowledge-based industries.
• Expand international export capacity to help grow existing industries and the number of good-paying jobs. Invest in innovation in key industry clusters to increase the quality of the goods and services produced in the region for sale to other regions and abroad; modernize the port and multimodal freight strategy to help move a greater volume of goods; or help small and mid-sized businesses reach global customers.
• Empower the area’s many institutions of higher education to help retrain and improve the quality of the workforce for growing sectors of the economy. The relatively high share of workers with low education levels and skills may be holding back the transition to more robust and knowledge-based industries and hindering workers’ pathways to wealth-creating opportunities.

Strengthening assets and capacities for greater regional resilience via community engagement

• Continue to nurture an “open society” where engagement, networks, partnerships, and collaboration continue organically
• Maintain citizen participation as the community transitions from “crisis” to the mundane task of implementation
• Expand local “wealth” (e.g., tax base, private investment, philanthropy, individual) to match outside resources and sustain a level of self-reliance
• Diversify and strengthen the economy’s export sectors and increase the share of its skilled and educated workers

Ultimately success depends on political, civic, business, and community leaders who identify a set of common goals, priorities, and strategies to set the region on a future course that leads to meaningful outcomes.

What can the Jacksonville Region learn from New Orleans’ seven-county region?

Read more at https://gnocdc.s3.amazonaws.com/NOIat5/Overview.pdf  An overview of Greater New Orleans: FROM Recovery to Transformation by Amy Liu and Allison Plyer of the Brookings Institute

Recession to recovery more likely in a previously expanding local economy

As of August 2010, according to Moody’s Analytics Adversity Index, the Jacksonville Metropolitan Statistical Area (MSA) was “At risk” for continued recession. The Index measures employment, single family housing starts, housing prices, and industrial production. Take a look at these Jacksonville MSA numbers.

8.2010 (“At Risk): Employment (-0.31%) | Single family housing starts (-0.67%) | Housing prices (N/A) | Industrial production (+5.22%)

So what did the Jacksonville MSA look like a year ago?

8.2009 (“Recession”): Employment (-6.17%) | Single family housing starts (+35.82%) | Housing prices (-7.95%) | Industrial production (-9.97%)

What about 2 years ago in the Jacksonville MSA?

8.2008 (“Recession”): Employment (-2.16%) | Single family housing starts (-31.79%) | Housing prices (-10.78%) | Industrial production (-2.08%)

Jacksonville MSA Strengths
-Military base underpinning strong demographic trends.
-Growth drivers in tourism and port.
-Low-cost center for financial services.
-Competitive living costs.

Jacksonville MSA Weaknesses
-Below-average incomes.
-Reliance on federal defense spending.
-Very susceptible to downturns in the business cycle.

In August 2008 there were seven states considered “In Recovery” – Montana, Colorado, New Mexico, Texas, Alaska, Massachusetts, and New Hampshire. These states were still considered “In Recovery” as of August 2010.

How have some of the large metro areas in these states fared since 2008?

Austin, Texas MSA
8.2010 (“Recovery”): Employment (+2.06%) | Single family housing starts (-24.36%) | Housing prices (N/A) | Industrial production (+9.17%)
8.2009 (“Recovery”): Employment (-2.75%) | Single family housing starts (-0.39%) | Housing prices (-0.39%) | Industrial production (-10.49%)
8.2008 (“Expansion”): Employment (+2.22%) | Single family housing starts (-38.32%) | Housing prices +3.73%) | Industrial production (+5.32%)

Austin MSA Strengths
-Strong population growth supports demographically driven consumer demand.
-Well-educated labor force attracts high value-added tech businesses.

Austin MSA Weaknesses
-Competitive pressure of foreign high-tech manufacturing challenges local industry.
-Tech cycle adds to cyclical volatility of overall local economy.

Denver, Colorado MSA
8.2010 (“Recovery”): Employment (-1.00%) | Single family housing starts (+10.9%) | Housing prices (N/A) | Industrial production (+5.74%)
8.2009 (“Recession”): Employment (-5.06%) | Single family housing starts (-34.08%) | Housing prices (-0.66%) | Industrial production (-8.98%)
8.2008 (“Expansion”): Employment (+1.05%) | Single family housing starts (-48.01%) | Housing prices (-0.52%) | Industrial production (-2.21%)

Denver MSA Strengths
-High concentration of high-tech industries and skilled workers.
-Per capita income is well above the national average.
-Strong demographic trends.
-Credit quality has held up well during the recession.

Denver MSA Weaknesses
-High dependence on volatile industries.
-Fiscal conditions are deteriorating

Boston, Massachusetts MSA
8.2010 (“Recovery”): Employment (+1.3%) | Single family housing starts (-3.12%) | Housing prices (N/A) | Industrial production (+7.1%)
8.2009 (“Recession”): Employment (-4.15%) | Single family housing starts (-12.73%) | Housing prices (-3.53%) | Industrial production (-9.44%)
8.2008 (“Expansion”): Employment (+0.4%) | Single family housing starts (-33.6%) | Housing prices (-4.47%) | Industrial production (-0.38%)

Boston MSA Strengths
-Business capital of New England.
-Access to skilled labor force and venture capital for emerging companies.
-Dynamic high-tech and biomedical research and development industries.

Boston MSA Weaknesses
-Very high business and living costs.
-Weak population growth.
-Highly exposed to cyclical financial and tech industries.

Note: The employment, housing, and industrial figures above are three month averages.
For more information about the Moody Adversity Index: http://www.msnbc.msn.com/id/29866676