SARASOTA ECONOMIC OUTLOOK 2009–2010

Below is the conclusion to Prof. Grimes' study of the economic outlook for Sarasota:

CONCLUSION

Sarasota County’s economy has entered its worst economic episode in memory. The unemployment rate in the county, which historically has been below the national average, now exceeds the unemployment rate in the nation as a whole, and it’s expected to get worse before improving slightly in the second half of 2010.

The county’s economic troubles can be traced to the construction-and-real-estate-related boom between 1995 and 2005, which inevitably has led to a construction-and-real-estaterelated bust. The nation has followed a similar path, but the amplitude of both the boom and the bust has been much greater in Sarasota. We anticipate that there will continue to be job losses in Sarasota County in 2009 and 2010, but the losses in 2010 will be minimal, partly because we have assumed that the much-discussed economic stimulus package, especially its infrastructure spending portion, will mitigate some of the job losses in residential construction activity.

The good news is that there has been some employment growth in the high-wage, higheducational-attainment industries in the county, even during the first two years of employment decline. We expect that employment will continue to grow in these industries (health care, professional services, and corporate headquarters) over the next two years, but that these gains will be too small to overcome the job losses resulting from the construction bust and the weak economy overall. Job opportunities for people with relatively low levels of educational attainment will be scarce.

We are forecasting that the unemployment rate in the county will continue to increase through the first half of 2010, when it will peak at 9.3 percent, after which it will begin to drift down slowly.

The county has some great assets to promote future economic development. These include its natural beauty and weather, its recreational opportunities, and its arts community. There is already a sizable and reasonably healthy white-collar employment base in the county. These assets are a magnet to attract up-and-coming industries.

Among such opportunities is a group not usually thought of as an industry, that is, affluent retirees. It is fortunate that so many of them have gravitated here on their own, but there should be no slacking off of efforts to keep them coming.

At the same time, it is important to recognize the county’s liabilities, especially the fact that it is geographically isolated from most of the country. This will make it difficult to attract manufacturing companies to this area, an observation supported by Sarasota’s very low share of manufacturing employment that is not related to construction. In fact, it would be difficult to imagine a less geographically hospitable place for manufacturing than coastal southern Florida, except for Alaska and Hawaii. Economic development efforts should be directed elsewhere.

The most important factor in determining any area’s economic prosperity, at least as measured by the income of its residents, is the level of educational attainment of its work force. Sarasota County needs to become single-minded in its efforts to attract highly educated residents and the industries that seek to employ them. We believe Sarasota has the assets to do so.