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Florida's outlook remains bright

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Posted on Mon, Jan. 17, 2005

COVER STORY

Florida's outlook remains bright

BY GREGG FIELDS

[email protected]

One thing four hurricanes can't destroy is growth of the Florida economy.

In September, after weeks of battering by Charley, Frances, Ivan and Jeanne, the state actually gained a few thousand jobs.

And then things basically returned to normal. Between September and October alone, employment rose by 59,000.

How can that be? Simply put, Florida remains a place people want to visit or live in. And barring four more hurricanes this year, growth should continue in 2005.

''Florida is still a magical place, where people want to relocate and retire,'' said Darrell Kelley, chief executive of Enterprise Florida, the state's development arm. ``I anticipate 2005 will be a banner year for job growth.''

SCRIPPS QUESTION

Besides perennials like tourism and retailing, Kelley sees increasing gains in more technical fields. Although The Scripps Research Institute has been delayed by permitting problems, its plans to expand here has highlighted the state's scientific prowess.

''Florida is on the map for life sciences,'' says Kelley.

Kelley, of course, is paid to be an optimist. But most observers have similarly upbeat views.

The outlook is for continued job growth, although it could taper off from 2004. The tourism market should have a record winter, but summer remains a question mark considering last hurricane season. And the real estate boom looks to extend its run -- although for how long is anyone's guess.

''We see the trends of last year continuing,'' says Frank Nero, head of the Beacon Council, Miami-Dade's development agency.

Although Miami is historically the most sluggish of the state's major metro areas, unemployment has dwindled to 5.7 percent, where it was before the 9/11 attacks.

FOREIGN INVESTORS

Meanwhile, a strong euro and plunging dollar have made South Florida newly attractive to foreign investors and tourists. ''Normally, the projects we close are one-third international and two-thirds domestic,'' Nero says. ``Last year it was a 50-50 split.''

Broward had a similar experience, says JT Tarlton, head of the Broward Alliance.

''We had a lot more activity in 2004 on the international front, which took us into many areas we hadn't planned on,'' he says. For instance, county leaders are increasingly seeing not just foreign tourists, but foreign direct investment -- where companies buy assets in the community.

That's not to say South Florida is without its concerns. Nero fears the construction boom could create a condo glut in Miami, as happened in the 1980s. High housing costs in general are making it tougher to recruit companies.

And the rush of downtown condo projects could squeeze out job-creating office buildings. ''You may have an urban core that's a bedroom community,'' says Nero. ``People will commute from downtown to the suburbs.''

Despite the rosy outlook, no one is predicting a return to the boom that began in the late 1990s. In 2000, Florida gained nearly a quarter-million jobs -- despite limited exposure to Internet-related industries driving the expansion.

EMPLOYMENT UP

Final figures for 2004 aren't in, but November employment was 160,500 over a year ago.

Tony Villamil, a Miami economist, believes vitality could taper off a bit in 2005. For one thing, the Federal Reserve appears set to continue raising interest rates, which could take some wind out of real estate's sales.

''It's going to be a mixed bag,'' said Villamil. ``We have population-driven growth. But we'll see much slower new construction employment.''

Across Florida, tourism is a common economic denominator. And this year, the outlook is for a hot season, helped greatly by the slumping dollar.

In Miami, for instance, European arrivals are up 11 percent.

The rest of the state is also benefiting, says Hank Fishkind, an Orlando economist.

ORLANDO SUCCESS

''Orlando is doing terrific,'' he says. Besides currency translations, the city's amusement parks have added new attractions and begun national marketing campaigns touting them.

The city's clout in business travel is also growing.

''The convention center in Orlando just added 1 million square feet of space,'' Fishkind says.

Still, Florida convention business may feel a sting from the 2004 hurricanes. The reason: Companies may be reluctant to book major meetings during storm season.

But summer should remain strong ''on the leisure side,'' said Bill Talbert, head of the Greater Miami Convention and Visitors Bureau.

Talbert notes that, in the past 10 years, Miami has shaken off crime concerns and has added innumerable high-end hotels. Formerly dowdy locations such as Sunny Isles and North Beach have been reborn.

''It's the hottest place in the world right now,'' Talbert says.

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