Florida’s 2016 first quarter 2.1 percent GDP growth outpaced the nation as a whole. It also beat every top-population state and all but one Southeast states. This was driven by gains in the state’s standard industries: real estate, retail, and construction.
Gross domestic product (GDP) is the market value of goods and services produced by a state’s labor and property. Florida’s first-quarter GDP stood at more than $911 billion, up more than $48 billion from the previous year.
Florida’s 2015 real GDP was $789.8 billion, the fourth-largest in the nation.
Real Estate Market Driving Growth
The real estate market and construction industries’ production output accounted for half of the state’s first-quarter gains. This was great news for industries battered by the late 2000’s great recession.
Other Florida industries such as accommodation, food services and entertainment fell in the first quarter, which doesn’t bode well for the state’s travel and tourism efforts. Warehousing, utilities and transportation also saw first-quarter declines.
Nationally, U.S. GDP growth has remained positive but sluggish, averaging 2.4 percent in 2015 but only 1.2 percent in the first quarter of 2016.
Economic momentum indicates Florida may continue to grow more quickly than the U.S. as a whole for the conceivable future. The state has a steady flow of new residents, and continues to benefit from strong job creation. Much of the influx of new residents over the next four years is expected to be retiring baby boomers, the Orlando Sentinel reports.
Housing Prices Expected to Continue Rising
The increases in jobs and residents will likely continue driving the state’s burgeoning housing prices further upward, boosting the state’s GDP.
Sagitec Solutions recently revealed it will add 60 jobs to the Tampa market, and ADP plans to add 1,600 new jobs in the Orlando area. Amazon announced it will expand its Florida warehouse/distribution empire to Jacksonville and hire 1,500.
Residential real estate is joined by commercial development and construction in buoying the state’s economic success.
Commercial real estate construction, including office, industrial, warehouse and retail, is a substantial contributor to both the U.S. as a whole and individual state economies, supporting about 3.2 million American jobs and contributing $450 billion to U.S. GDP in 2015, according to a report by the NAIOP Research Foundation. In Florida, commercial real estate development supports 100,569 jobs and contributes about $5.7 billion to the state’s economy.