Expect Tampa's economy to remain weak through 2009
The Tampa economy is definitely in the doldrums. This statement is based on the fact that employment in the metro area has fallen by over 23,000 jobs over the past year.

Meanwhile, the city's unemployment rate has increased from 3.8% to 5.7%, its highest level since June 2003. Over the past year, the effects of the collapse of the metro area's housing market and the concomitant 6,400-job drop in construction employment are having a serious impact on other industries. This is particularly true in the service-producing industries, where employment is down by 13,800 jobs over the past 12 months.

Significant declines in employment have occurred in the following sectors:

• Professional and business services (-14,100);
• Manufacturing (-3,400);
• Trade and transportation services (-2,400);
• Information services (-2,000); and
• Financial services (-500).

Only three sectors added jobs over the past 12 months: education services, government services and leisure and accommodation.

Looking forward, while Tampa's longer term prospects remain fundamentally positive, its near-term outlook does not. This view is supported by the most recent Q3/08 Manpower Employment Outlook Survey, which reported that the Tampa/St. Petersburg employment outlook was one of the weakest in the nation.

In the third quarter, only 8% of surveyed companies planned to add staff, down from 30% in the second quarter. At the same time, 45% of firms plan to reduce their workforce in the third quarter, up from 22% in the second.

The effects of the weak hiring climate, when combined with relatively high house prices compared to the rest of the country, will probably continue to depress new single-family house construction well into 2009.

However, rental demand could get a boost in the meantime, as potential home-buyers choose to rent rather than buy a house today that might be worth less tomorrow.

Despite this near-term weakness, Tampa's attractive location, moderate climate and below-average cost of living will ultimately prevail. These factors should contribute to the revival of the metro area's economy late in 2009 or early in 2010.