The Orlando metropolitan area’s economy has been hit much harder than most by the housing-bubble burst and accompanying drop in household wealth. Proof of this fact can be found in the city’s falling employment numbers — Orlando has lost 62,600 jobs in the past year, the city’s largest 12-month drop in employment in over 20 years.

A large part of the reduction in total employment was due to a 14,800-job drop in construction employment; however, significant job losses also occurred in professional and business services (-22,900) and trade and transportation (-10,200). Orlando’s vital leisure and hospitality services sector has also lost 9,400 jobs as a result of the precipitous drop in travel and tourism spending across the country.

Looking ahead, hiring plans in Orlando are stagnant heading into the second half of the year, according to the latest Manpower Employment Outlook Survey.

Overall, the Orlando economy will continue to struggle over the next several months. Four factors are likely to contribute to this weakness: (1) an eight-month inventory of new, unsold homes; (2) a gradual increase in office vacancy rates; (3) a sharp -9% year-over-year drop in office-based employment; and (4) a further slowing in both domestic and international air passenger traffic.

However, Orlando’s prospects should start to strengthen as we head into 2010. This forecast is based on three assumptions: (1) the bloated inventory of unsold homes continues to shrink as it has done since the beginning of the year; (2) the national economy begins to gradually recover midway through the second half of the year; and (3) spending on travel and tourism strengthens during the first half of 2010.

Employment Growth: Orlando vs Total United States

*“Year over year” is each month versus the same month of the previous year.

Data source: U.S. Bureau of Labor Statistics (Department of Labor).
Chart: Reed Construction Data – CanaData.

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