Orlando Insight Q1 2016 - Orlando Economic Development

Orlando Insight is a publication of the Orlando Economic Forum, an initiative of the Orlando Economic Development
Commission (EDC). Comprised of local industry leaders, the Forum meets quarterly to discuss both current economic
conditions and issues of regional significance in the four-county Orlando Metropolitan Statistical Area (MSA).
Orlando Insight reflects those discussions and draws from the most recent data available at time of preparation.
Orlando: Ten Years After The Boom
In early 2006, Orlando was the envy of the nation. The region had added over 50,000 jobs in 2005 and was growing at a
rate second only to Phoenix. Our pipeline of development projects was full and almost all workers who wanted a job could
find one.
Yet Orlando was on shaky ground, which ultimately resulted in the region experiencing a harsher recession than some
similarly sized metro areas. More than 100,000 jobs would be lost between late 2007 and early 2010, and unemployment
would reach a new high.
Ten years later, Orlando is once again at a crossroads. Growth has returned, and the region is consistently lauded as one
of the nation’s leading job creators. Yet, work to rebuild Orlando’s economy remains unfinished.
Hundreds
Return To Growth
Total Payroll Employment, Orlando MSA
Through December 2015, Seasonally Adjusted
1,200
The final months of 2015 represented an
extension of the recent past. The Orlando
Metropolitan Statistical Area (MSA) added a
seasonally-adjusted 13,000 new jobs in the fourth
quarter, bringing total job creation for the year
to over 38,000 and driving unemployment to its
lowest level in more than seven years. At 4.3
percent, December’s unemployment rate is fast
approaching the 3.0 percent of December 2005,
and new claims for unemployment benefits have
actually fallen below pre-recession levels.
1,150
1,100
Nov ’07 – Jan ’10
103,700 jobs lost
Jan ’10 - Present
187,200 jobs regained
1,050
1,000
950
RECESSION
900
Although more muted than in 2005, 2015’s job
creation has helped return us to pre-recession
employment levels – and beyond. We lost over
100,000 jobs during the recession, but we’ve
gained over 180,000 since. Over 80,000 jobs
in Orlando today were not present before the
recession.
850
800
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Florida Department of Economic Opportunity
Our status as a regional growth center has resumed. In 2005, our employment growth was second among all of the
country’s large regions and first in the South. In 2015, we were fourth in the U.S. and again first in the South.
–– Rick Weddle
President & CEO
Orlando Economic
Development Commission
“We are once again one of the country’s leading growth centers and thus
we are entering a year of great opportunity for our region. Now the question
is, how will we seize those opportunities and forge a path to prosperity for
all? The answer lies in our ability to make transformational investments in
what matters most – education, infrastructure and high value industries.”
301 E. Pine Street, Suite 900 // Orlando, FL 32801 // P/ 407.422.7159 // orlandoedc.com
ORLANDO INSIGHT
First Quarter 2016 | 2
An Incomplete Recovery
For all the positives, there’s still work to do. We are fortunate to be anchored by a vibrant tourism sector but its ongoing
success has served only to extend our vulnerability to outside forces. Robust job growth in one dominant industry is again
overshadowing gains across all sectors and resulting in limited progress toward diversification. In 2005, construction
accounted for almost one quarter of net job creation; in 2015, tourism accounted for nearly one third.
Challenges also persist in the labor market, where
participation remains volatile and underemployment hidden.
Wage stagnation has been the hallmark of the recovery
nationally but has been particularly pronounced locally,
where average weekly wages closed 2015 just $37 higher
than in 2010. Much work remains to move the needle on
persistent wage and income disparity.
Comfort has been found in a housing recovery that has
reversed at least part of the wealth erosion of the previous
decade, but the affordability issues of 2005 may yet return.
Prices remain some 25 percent below pre-recession highs
and sales volume in 2015 actually exceeded that of 2005.
However, sustained double-digit price gains, elusive wage
growth and the arrival of interest rate hikes in 2016 pose
challenges. On the supply side, residential construction
has been disciplined and has failed to add significantly to
increasingly tight inventory levels.
A Community Agenda
Net Job Gains by Industry, Orlando MSA
December 2014 - December 2015
Leisure & Hospitality 33%
Business Services 21%
Trade, Transportation & Utilities 18%
Construction 7%
= 1,000 jobs
Government 7%
Finance 6%
Education & Health 5%
Manufacturing 3%
Source: Florida Department of Economic Opportunity
As recession fades and growth normalizes, the time is now
to course-correct Orlando’s economic trajectory. We can
choose to drive structural economic change, build on
existing strengths to ensure all sectors flourish equally,
and embrace a targeted regional investment strategy that
builds human capital and community capacity to deliver
sustainable economic prosperity for all.
The road ahead is being paved with a solid foundation
as the region begins to reap the benefits of its business
branding campaign, “Orlando. You don’t know the half of
it.” More companies are looking at Orlando as a business
location after realizing the full potential of the region. The
Orlando Economic Development Commission is seeing a
50 percent increase in its project pipeline relative to past
years with prospect companies bringing a higher number of
jobs that are associated with higher wages.
The Orlando MSA will welcome an additional 350,000 new
residents by 2020, of which more than 200,000 will join
the labor force. How we prepare for this influx and how we
leverage that opportunity may be the challenge of our time.
“We have made good progress in attracting good, high paying
jobs to Orlando. But, we are at a strategic point relative to our
future economic growth. In order to attain quality, diversified and
sustainable growth we will need to make strategic investments to
position us for future growth.”
“To advance prosperity in the region, we must focus on making
strategic investments in growth segments of the advanced
technology market. Through this focused collaboration among
government, industry and academia, we can offer the diversity
needed to accelerate innovation and protect against future
economic challenges.”
–– Jon Rambeau
Vice President & General Manager
Lockheed Martin Training and
Logistics Solutions
“Advances in technology are both accelerating and enabling a
new wave of economic progress and productivity that promises
to reshape labor markets forever and potentially eliminate many
of the jobs that have driven our economic recovery. Orlando’s
economic future must be as a source of innovation and talent, not
a victim of technological change.”
–– Scott Faris
–– David Fuller
President
SunTrust Foundation
Chair, Orlando EDC
CEO
AeroSonix, LLC
ORLANDO INSIGHT
First Quarter 2016 | 3
Around the Region - Coming in 2016
Lake County: The Minneola
Interchange on Florida’s Turnpike
began construction in January 2016.
Less than 30 minutes to downtown
Orlando and the tourist corridor, the
interchange will bring 9,000 new
homes and over 3 million square
feet of new non-residential space
to the City of Minneola.
Seminole County: In May Seminole County will celebrate
the opening of the new Seminole County Sports Complex.
The facility will offer 102 acres of premier tournamentquality fields across 15 lighted athletic fields, including nine
synthetic turf fields. The complex will be home to more than
40 sporting events by the end of 2016 and is expected to
generate 13,100 hotel room nights.
City of Orlando: The fourth
annual Lake Nona Impact Forum
will take place February 2426, convening more than 200
thought leaders from business,
academia, government and
industry. The Forum provides
a platform to highlight Lake
Nona Medical City and the City
of Orlando to global leaders of
industry as a leader in health,
product development and
scientific research.
Orange County: Mayor Teresa Jacobs
and the National Center for Simulation will
host the second annual Florida Simulation
Summit September 22 at the Orange County
Convention Center. The Summit highlights
Florida’s growing simulation industry as well as
opportunities for commercialization.
Osceola County: Construction on the $200 million
Florida Advanced Manufacturing Research Center
(FAMRC) should be substantially complete by the
end of 2016. The first industry-led smart-sensor
research and development center in the nation is a
cooperative effort of Osceola County, the University
of Central Florida, The Corridor, the Orlando EDC
and Enterprise Florida.
ORLANDO INSIGHT
First Quarter 2016 | 4
Labor Market
Orlando MSA Area Unemployment Rates
Unemployment Rate
(%, SA)
December 2015, Not Seasonally Adjusted
Unemployment Rate vs. New UI Claims, Orlando MSA
Through December 2015
New Claims
12-MMA
14
14,000
ORLANDO MSA: 4.3%
Sanford
5.0%
Kissimmee
4.1%
St. Cloud
4.1%
Casselberry
Winter Park
Orlando
3.9%
Apopka
3.8%
Oviedo
3.8%
Ocoee
3.5%
0%
8
4.4%
6,000
5.2%
6
4.5%
4.8%
4.6%
4.2%
4,000
4
4.7%
3.6%
Winter Garden
8,000
4.8%
4.0%
3.9%
10,000
10
4.9%
4.0%
Winter Springs
12,000
5.4%
4.2%
Altamonte Springs
New UI Claims
12
5.7%
4.8%
Clermont
Unemployment Rate
RECESSION
Dec-15
2
2005
Dec-14
4.4%
2,000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
Source: Florida Department of Economic Opportunity
3.9%
2%
4%
Source: Florida
Department
of Economic
Source: Florida
Department of Economic
Opportunity Opportunity
6%
• New claims for unemployment benefits have fallen below prerecession levels. Claims are normalizing at a 12-month moving
average of approximately 3,300.
• At 4.3 percent, unemployment closed 2015 at its lowest level
in more than 7 years and down eight-tenths of a percentage
point from year-end 2014. Declines in the unemployment rate
have occurred throughout the region and in all four counties.
Neighboring Ocoee and Winter Garden have the lowest rates.
Labor Force Participation Rate, Orlando MSA
Through Fourth Quarter 2015
%
75
“The success of Central Florida moving forward relies extensively,
and perhaps exclusively, on our ability as a region to diversify
and expand our economy into sectors that focus as much on
high-tech, healthcare, and advanced manufacturing as they do
on our benchmark industries of tourism and construction. This
region is dedicated to training and growing our already talented
pool of career seekers to sustain and encourage these emerging
industries in our community.”
70
65
–– Pamela Nabors
60
President & CEO
CareerSource Central Florida
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Moody’s
• Labor force participation decreased through 2015 and has
helped accelerate declines in the unemployment rate. However,
declines may prove more difficult to sustain moving forward as
improving job prospects encourage workers to rejoin the labor
force.
Labor Force
1,222,042
Unemployment Rate
4.3%
Initial Claims
2,810
New Job Postings
21,818
Arrows indicate change from previous year. Data for December 2015 unless otherwise specified.
ORLANDO INSIGHT
First Quarter 2016 | 5
Payroll Employment / Consumer Spending
–– Sean Snaith, Ph.D.
“I expect 2016 will see a continuation of Orlando’s strong
job growth. Construction and business services will be key
contributors.”
Director, Institute for Economic
Competitiveness
University of Central Florida
Chair, Orlando Economic Forum
60
Thousands
56.0
December 2014 to December 2015, Not Seasonally Adjusted
50.9
50.3
40.0
40
15.4
UNITED STATES: 1.9%
38.1
37.9
31.9
25.0
20
% Change in Payroll Employment, Southern MSAs > 1 Million Jobs
Net Job Gain, Orlando MSA
Not Seasonally Adjusted
Dallas
3.0%
19.4
15.3
12.1
12.0
Houston
More
0.8%
0
Atlanta
Number
of Employees
3.0%
-20
-23.4
Miami
-40
-60
2000
2001
2002
2003
2004
2005
2006
2007
-51.9
-50.9
2008
2009
2010
2011
2012
2013
2014
2015
Less
2.2%
Tampa
3.2%
Source: Florida Department of Economic Opportunity
Orlando
• Orlando’s net job creation of 38,100 in 2015, while less than in
2014, brought total net gains since late 2010 to over 180,000.
Almost one in six jobs in the region today did not exist in 2010.
3.3%
0%
1%
2%
3%
4%
Source: U.S. Department of Labor, Bureau of Labor Statistics
• Year-over-year employment growth closed 2015 at 3.3 percent.
Among large regions, this was the highest rate in the South and
the fourth highest in the country.
Source: Florida Department of Economic Opportunity
• Although job growth has been uneven across sectors, the region nevertheless added over 25,000 jobs outside of our headline tourism
industry, most prominently in the business services sector.
Total Payroll
Employment
1,183,300
Business
Services
Employment
195,500
Construction
Employment
61,300
Manufacturing
Employment
41,300
Taxable Sales
$4.9 billion
(October 2015)
Index of Retail
Activity
181.6
(October 2015)
Arrows indicate change from previous year. Data for December 2015 unless otherwise specified.
ORLANDO INSIGHT
First Quarter 2016 | 6
Commercial / Residential Real Estate
Office Market, Orlando MSA
Significant Lease Transactions, 2015
Tenant
60,000
Type
Submarket
SF
CVS Health
New
Tourist Corridor
112,329
Continental Casualty Company
New
Lake Mary
108,000
Synchrony Financial Services
New
Maitland
102,339
Renewal
Central Business District
81,857
New
Lake Mary
74,000
Home Sales vs. Median Sales Price, Orlando MSA
2000-2015
Sales
50,000
$300,000
Median Sale Price
40,000
$200,000
30,000
20,000
Wells Fargo
$100,000
10,000
Deloitte
0
Akerman
Renewal
Central Business District
54,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
$0
Source: Orlando Regional Realtor Association
Source: Cushman & Wakefield, JLL
• Absorption in the office market closed 2015 at 1.4 million square
feet, its highest level in over nine years. Market fundamentals
may now support new speculative office development. Demand
for Class A space is far outpacing the rest of the market,
accounting for almost 60 percent of all leasing volume in 2015.
• Over 35,000 homes were sold in the region in 2015, a level
surpassing even 2005 activity. Despite consecutive years of
double-digit price growth, 2015’s median sales price of $178,500
remains almost 30 percent lower than the market’s peak of
$248,000 in 2006.
Housing Permits, Orlando MSA
Units Authorized, 2000-2015
30,000
25,000
Industrial Market, Orlando MSA
Significant Lease Transactions, 2015
Single-Family
Tenant
Type
Submarket
SF
Freeman Expositions
New
Regency/Turnpike/Beeline
451,823
15,000
Tech Packaging
New
Silver Star/Apopka
200,000
10,000
Publix Food Markets
New
Regency/Turnpike/Beeline
190,100
5,000
Smart Warehousing
Renewal
Michigan/South Orange
144,000
0
Renewal/
Expansion
Silver Star/Apopka
136,655
New
Regency/Turnpike/Beeline
99,100
J.J. Haines & Co.
Shepard Exposition Services
Source: Cushman & Wakefield, JLL
• All industrial submarkets except Lake Mary/Sanford recorded
positive absorption in 2015, pushing vacancy down to 7.3
percent from 8.5 percent at year-end 2014. Leasing volume has
been driven in part by demand from convention supply firms.
Office Vacancy
13.6%
(Q4 2015)
Office Asking
Rate
$20.94
(Q4 2015)
Industrial
Vacancy
7.3%
(Q4 2015)
Multi-Family
20,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YTD*
*through November
Source: U.S. Census Bureau
• Although on the uptick, residential construction continues to
prove relatively muted. Approximately 12,000 single-family
homes are expected to be permitted in 2015, less than half the
region’s peak of 27,000 in 2004. Multi-family activity is expected
to finish the year closer to historic averages at 7,000 units.
Industrial
Asking Rate
$6.43
(Q4 2015)
Existing
Home Sales
2,552
Median Home
Price
$185,000
Arrows indicate change from previous year. Data for December 2015 unless otherwise specified.
ORLANDO INSIGHT
First Quarter 2016 | 7
Transportation / Visitor Industry
Total Passengers, Orlando International Airport
Total Boardings, SunRail
2005-2015 YTD
40
Through December 2015, Y/Y % Change
Millions
20%
Domestic
2.3
35
2.7
2.1
2.2
3.2
3.0
International
3.5
16%
3.8
3.9
4.3
4.6
8%
30
25
20
12%
31.9
34.2
32.5
4%
33.0
31.6
30.7
31.9
31.5
30.8
31.4
30.6
0%
-4%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
YTD*
*through November
Source: Greater Orlando Aviation Authority
-8%
-12%
• With one month of 2015 still remaining, total passengers
through Orlando International Airport is expected to post its
highest annual total on record. Through November, international
visitation has already posted a new high, at 4.6 million
passengers.
June
July
August
September
October
November
December
Source: Florida Department of Transportation
• SunRail recorded almost 1 million boardings in 2015, its first full
calendar year of operation. Boardings increased year-over-year
in each of the last 5 months.
Hotel Occupancy vs. Average Daily Rate, Orlando MSA
2005-2015
100%
$120
Hotel Occupancy
90%
Average Daily Rate
$110
80%
$100
70%
• Orlando-area hotels closed 2015
by reporting year-over-year growth
in both key metrics. Occupancy
increased to 77.0 percent from
74.0 percent in 2014; average
daily rate (ADR) rose $5.18 to
$112.00. Both numbers represent
recent highs.
$90
60%
50%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
$80
Source: Visit Orlando
Orlando International
Passengers
3,254,810
(November 2015)
Orlando Sanford
International
Passengers
208,208
Hotel Occupancy
77.0%
Average Daily
Rate
$112.00
Arrows indicate change from previous year. Data for December 2015 unless otherwise specified.
Orlando Economic Forum
CHAIR
Sean Snaith, Ph.D.
University of Central Florida
MEMBERS
Thomas Baptiste, Lt. Gen., USAF (Ret.)
National Center for Simulation
Cecelia Bonifay
Akerman, LLP
Chair, EDC Economic Strategy Committee
Phillip Brown
Greater Orlando Aviation Authority
Bill Martin
Greater Osceola Partnership for Economic Prosperity
Chair, Regional Economic Developers (RED) Team
Orlando Evora
Greenberg Traurig, LLP
Scott Faris
AeroSonix, Inc.
David Fuller
SunTrust Foundation
Chair, Orlando EDC
Larry Henrichs
Visit Orlando
Kimberly Maki
Bright House Networks
Leslie Molony, Ph.D.
Sanford Burnham Prebys Medical Discovery Institute
Bill Moss
CBRE
Co-Chair, EDC Business Development Committee
Pamela Nabors
CareerSource Central Florida
Bob Provitola
Mitsubishi Hitachi Power Systems Americas, Inc.
Chair, Manufacturers Association of Central Florida
Jon Rambeau
Lockheed Martin Training and Logistics Solutions
Jerry Ross
National Entrepreneur Center
Thomas K. Sittema
CNL Financial Group
Past Chair, Orlando EDC
Jacob Stuart
Daryl Holt
Electronic Arts (EA Studios)
Steven Jamieson
The Mall at Millenia
Tony Jenkins
Central Florida Partnership
Rasesh Thakkar
Tavistock Group
Rick Weddle
Orlando EDC
Florida Blue
Vickie White
Florida Hospital
ABOUT THE EDC
The Orlando Economic Development Commission (EDC) is a not-for-profit, public-private partnership that works
to aggressively attract, retain and grow jobs for the Orlando region while advocating, championing and educating
in support of efforts to improve competitive position. The EDC serves Orange, Seminole, Lake and Osceola
counties and the City of Orlando in Florida.
For more information, contact:
NEIL HAMILTON
Director, Business Intelligence
[email protected]
ELIZABETH GODWIN
Associate Director, Business Intelligence
[email protected]
301 E. Pine Street, Suite 900 // Orlando, FL 32801 // P/ 407.422.7159 // orlandoedc.com