LOCAL

Population growth helping state economy recover

John Ceballos
john.ceballos@theledger.com
Allen Sukholitsky, vice president and senior market strategist for Goldman Sachs Asset Management.

     PIERRE DuCHARME/THE LEDGER

WINTER HAVEN — Florida’s unemployment rate and job growth are outpacing their national counterparts, while the U.S. economy continues to recover at a faster clip than the rest of the world.

Those were among the topics of conversation at the 13th Annual East Polk Economic Summit. The event took place Wednesday morning at Polk State College’s Winter Haven campus and was highlighted by presentations from a pair of speakers.

Allen Sukholitsky is a vice president and senior market strategist with Goldman Sachs Asset Management in New York, and his presentation focused on the U.S. economy. Sean Snaith is the director of the University of Central Florida’s Institute for Economic Competitiveness, and his remarks centered on Central Florida and the state as a whole.

“Both presenters did a great job,” said Suzie Moraco, a certified financial planner and associate vice president for Morgan Stanley’s Winter Haven branch, one of the event’s sponsors. The summit was also sponsored by Polk State College, the Greater Winter Haven Chamber of Commerce, the Winter Haven Economic Development Council, and Six/Ten LLC in Winter Haven. “I think they were both very reassuring that our national and local economies are on steady footing.”

Snaith noted that the state’s economy was notably slower to recover from the recession than the rest of the country.

“We were in recession, I would argue, 2½ years longer than the national economy,” Snaith said. “After 2012, Florida started to outpace the national economy and we continue to do so today.”

One factor was the state’s population growth, which currently exceeds 20 million people. In December 2014, Florida passed New York to become the third most populous state in the U.S. behind California and Texas.

“I’ve always said population growth is economic development for dummies,” Snaith said. “If you want your region and your economy to grow faster, put more people in it.

“You’ll get more transactions, more spending, and more income being created.”

He also praised Polk County and the rest of Central Florida as a hub for economic activity.

“The I-4 corridor is the new breadbasket when it comes to economic growth in Florida,” Snaith said. “I think that’s going to continue to be the case regardless of cyclical fluctuations in the economy.”

On the other hand, Snaith noted that both Polk and the rest of Florida have struggled to keep up with all the new residents moving into the state.

“We’re behind the curve as far as construction is concerned,” Snaith said. “In 2005, we built way too much, and right now we’re not building enough to keep up with the population growth.”

Snaith also pointed out that Polk’s unemployment rate, which was 5.9 percent in September, still lags behind the rest of the state, which posted a 4.7 percent figure for the same month. Meanwhile, Polk’s 1.4 percent year-to-year job growth in September — which resulted in 3,000 more jobs — trailed the state’s 3.4 percent gain, which resulted in 276,300 more jobs statewide.

“This has been a real long road to recovery here in Polk County,” Snaith said. “It’s still struggling to get to where things were pre-recession.”

However, both Snaith and Sukholitsky agree that unemployment rate doesn’t tell the full story.

“It’s about how creative people can get with how many people they are counting as unemployed,” Sukholitsky said.

He added that although the current 5 percent national unemployment rate in September is a marked improvement from unemployment rates that exceeded 10 percent during the financial crisis, analysts should still take those numbers with a grain of salt.

“Five percent (unemployment) today may not necessarily reflect what 5 percent was in the past,” Sukholitsky said.

Sukholitsky  pointed to the fact that the Federal Reserve raised interest rates in December for the first time since the financial crisis as a positive sign for the near future.

“Inflation has been pretty tepid,” he said. “Where we are today is approaching those more comfortable levels for the Fed to start reversing course.”

Sukholitsky expects the Fed to raise interest rates by 0.25 percent once again next month, along with similar increases two or three times per year going forward.

It’s an advantage that U.S. economy has over its global counterparts.

“We don’t think their interest rates are going to move up any time soon,” Sukholitsky said. “We are all traveling down the same road, but many international economies are several miles behind us. The U.S. is out front, but we’re on the same road.

“It might take them a little bit longer to get to where the U.S. is, but ultimately they’re at least moving in the right direction.”

Hap Hazelwood, chairman of the Greater Winter Haven Chamber of Commerce’s board of directors, closed the summit with a quick message for how Polk residents can help nudge the economy in the right direction during the holiday season

“Since there are eight weeks left until Christmas, remember that when you shop local you are directly contributing to the betterment of your local economy,” Hazelwood said.

— John Ceballos can be reached at john.ceballos@theledger.com or 863-802-7515.