Predictions Into 2023 Boast Positive Implications for Floridians

January 11, 2023   |   News

In the fluctuating economy, population and employment play huge roles in well-educated real estate and investment decisions. In Florida, these statistics hold highly positive applications.

After historically low rates of change between 2020 and 2021, the US resident population increased by 0.4%, or 1,256,003, to 333,287,557 in 2022. Following this growth, Florida was the fastest-growing state of 2022. With an annual population increase of 1.9%, Florida’s resulting total population of 2022 calculated to 22,244,823 residents.

While Florida has often been among the largest-gaining states,” said Kristie Wilder, a demographer in the Population Division at the Census Bureau, “this was the first time since 1957 that Florida has been the state with the largest percent increase in population.”

It was also the second largest-gaining state behind Texas, with an increase of 416,754 residents. Net migration was the largest contributing component of change to Florida’s growth, adding 444,484 residents.

What does this mean for employment?

Earlier this month, the US Bureau of Labor Statistics released its December 2022 employment statistics. Nonfarm payroll was 153,743,000 employees, representing a monthly increase of 223,000.

This was a little surprising as the market was expecting somewhat lower numbers. There could be an immediate negative market response however, most economists expect the response to be somewhat moderate. It would be wise for investors and economists to keep an eye out for the Fed’s interpretation at their meeting at the end of the month.

Additionally, keep in mind that the economy is slowing. December’s 223,000 nonfarm increase was about 15% below the growth from the prior 3 months which was over 263,000. It is also good to note that December’s employment growth was about 40% below the 2022’s average monthly job growth of 375,000 and about 60% below 2021’s average monthly job growth of 562,000.

Causes & Effects

  • The Labor Force Participation rate accounts for all individuals that are either working or are actively looking for work. Last month this rate sat at 62.3% while employed individuals (153,743,000) represented about 46.2% of the population (332,000,000).
  • 21.3% of the population (70,579,000) is receiving social security (including supplemental security income).
  • Construction jobs were 12.6% of the gain. This is expected to slow measurably in 2023.
  • Increase in Healthcare jobs (74,400) accounted for 33.4% of job growth. We expect this to continue and strengthen next year.
  • Restaurants (including food services and drinking places) accounted for 11.8% of job growth (26,300). This trend is also expected to continue.

What can we expect for the future?

As stated, the economy is slowing. While not entirely positive for real estate demand, it may result in moderation of the 10 year US Treasury rate. This result is positive for the economy and favorable for commercial real estate.

Finally, it is good to be in Florida. Over the past year Florida is growing jobs about 40% faster than the US. As an investor, it is good to keep an eye on these trends because employees are the direct demand for commercial real estate.

To discover more about our ever-changing economy, contact one of our expert real estate advisors. Boasting years of experience, our team aims to provide our clients with relevant data that gives them a leg-up in this competitive market.

Gary M. Ralston
Gary is an expert in all things commercial and he holds a strong passion for educating clients on market trends in the current and future economy. Earlier in his career, he guided a corporate real estate firm from less than $15 million in real estate assets to over $1.5 billion. Recognized as...