Weak U.S. Dollar will boost Orlando’s Economy in 2008
John Clinkard
Entering 2008, there are signs that the Orlando economy is cooling. Over the past year, employment growth in the metro area has slowed from +3.8% year over year to its current pace of +2.0%. At the same time, the metropolitan area’s unemployment rate has edged higher, to 4.0% from 2.9% a year ago.
Despite this evidence of moderating growth, due primarily to a collapse in new home construction, the Orlando economy is continuing to generate jobs at a faster pace than all but four of the 25 largest U.S. major metropolitan areas.
Leisure and Hospitality Sector the Major Source of New Jobs
The major source of new jobs in Orlando over the past year, by far, has been the leisure and hospitality services sector. In particular, the arts and entertainment sub-sector has added almost 5,000 jobs, while employment in accommodation services is up by 3,400 jobs.
Other sectors contributing to Orlando’s 21,500-job increase in total employment over the past year have been education services (+2,800), professional and business services (+2,000), government services (+2,300) and trade and transportation services (+2,100).
Over the past year, however, the sharp decline in housing demand (e.g., residential permits are down by 40%) has reduced construction employment by 2,000 jobs and financial services employment by 1,900 jobs.
Lower U.S. Dollar Helps Orlando’s Theme Parks in Two Ways
Looking forward, the effects of tight credit conditions are likely to persist, meaning that residential construction will remain in the doldrums over the next several quarters. Nevertheless, the employment outlook remains positive.
This view is reinforced by the most-recent Manpower Employment Outlook Survey and the Conference Board’s Help-Wanted Online Data Series. Both indicate a positive hiring climate in the first half of 2008.
Moreover, Orlando’s leisure and hospitality sector will continue to underpin the metropolitan area’s growth well into 2009. In particular, the depreciation of the U.S. dollar has made foreign travel more expensive for Americans, thereby keeping vacationers relatively close to home. At the same time, the cost of visiting the U.S. and Orlando’s major theme parks is now less expensive for foreigners.
