The Florida Chamber of Commerce’s Chief Economist says there’s a low chance of a recession this year. However, that doesn’t mean it will be smooth sailing.
Will There Be A Recession?
the Legislative Office of the Economic and Demographic Research (EDR) released its forecast for the new year. The state says chances of a recession range from 21 – 43%. It uses data from financial firms like Moody’s and IHS. Amy Baker leads the EDR. She says Florida’s economy has been riding a historic boom.
“It’s slowing down. It’s not keeping quite the same pace as it was keeping, but it is still positive,” Baker says.
Whereas recessions she says, “You’re not just slowing down, you’re losing ground over the prior year.”
The state’s latest economic analysis shows the risk of recession could increase later in the year.
Will Events Abroad Affect Florida?
Jerry Parrish is the Chamber of Commerce’s Chief Economist. He says recent events in the Middle East could negatively impact Florida’s economy. He notes Florida’s large military footprint.
“With the recent events in the Middle East and understanding that Florida has 20 military bases, three combatant command centers, and 1.5 million veterans in Florida, a lot of families could be impacted by these events,” Parrish says.
Chamber Spokeswoman Edie Ousley says if conflicts involving the U.S. in the Middle East escalate, it could affect the stock market and consumers’ readiness to buy new things.
Meanwhile, The Florida Chamber of Commerce and the Legislative Office of the Economic and Demographic Research are in agreement about the threat of tariffs to Florida’s Economy.
“Not knowing what tariff rate the goods will be subject to makes it difficult for Florida businesses to plan, and it causes businesses to hold off investing. This is causing a reduction in our international trade as well,” Parrish says.
The EDR’s report suggests tariffs and events abroad are a key factor in determining whether economic predictions hold.
Minimum Wage Increase: Why Businesses Are Concerned
Raising Florida’s minimum wage to $15 an hour is one of Parrish’s big concerns.
“Many people get cut from full-time down to part-time hours and they lose their benefits. There are also definitely jobs lost and some businesses will definitely close,” Parrish says.
The University of Washington has been studying the city of Seattle after it voted to raise the minimum wage to 15 dollars an hour. It found about half of all employers reported raising prices to offset increased labor costs. Fewer than one in four employers reported reducing workforces by cutting hours or laying off employees. But franchises were more likely to reduce their workforce than independent businesses.
During the 2020 elections, Florida voters will have a chance to vote on whether the minimum wage should be $15 per hour.
Other Things To Consider:
Parrish also points to rising oil prices, abolishing Visit Florida, and international trade as factors that could affect the economy.
