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- 2012 - June - 12th -

Real estate remains No. 1 economic generator in state

by Mark Basch, Contributing Writer

Florida’s real estate industry is generating less of the state’s economy than it did before the recession, but it is still by far the state’s biggest private industry.

A report on the state gross domestic product was released the past week by the Legislature’s Office of Economic and Demographic Research.

The report also shows that, despite efforts to reduce the size of government, the government sector has been a growth engine for the state since 2006, while the private sector’s output has been basically flat.

The office is the Legislature’s research arm that forecasts economic and social trends that affect policymaking, revenues and appropriations.

It analyzed statistics from the U.S. Department of Commerce Bureau of Economic Analysis. Florida’s GDP is the sum of all the goods and services produced in the state.

Florida’s total GDP rose by 0.77 percent per year from 2006 through 2011 to $754.3 billion in current dollars, the report shows.

That was helped by 6.01 percent annual growth in government output to $97.3 billion in 2011.

The private sector grew by only 0.1 percent a year over the five-year period.

The report does not break down the government output by federal, state and local sources.

While the private sector slowed down, government accounted for 12.9 percent of Florida’s total economy in 2011, up from 10.5 percent in 2006.

That made government Florida’s second-largest industry behind real estate, which accounted for 15.6 percent of the state’s GDP in 2011.

However, real estate’s share of the GDP dropped from 16.8 percent in 2006.

That’s because the output for real estate and rental and leasing fell by 1.19 percent a year from 2006 through 2011 to $117.4 billion.

Not surprisingly, the only sector to record a sharper decline was the related industry of construction, which dropped by 14.5 percent a year over the five years.

Construction’s share of the state’s overall GDP fell from 7.7 percent in 2006 to 4 percent in 2011.

The biggest private-sector growth industry was health care and social assistance, which rose by 6.4 percent a year to $66.3 billion in 2011.

The industry accounted for 8.8 percent of the state’s GDP in 2011, up from 7.1 percent in 2006.

The industry-by-industry trends in Florida are similar in many ways to the nation as a whole, although government surpassed real estate as the largest sector nationwide with 12.6 percent of total output in 2011.

The one significant difference between Florida and the rest of the country is that Florida has a smaller manufacturing base.

Manufacturing’s share of the economy was basically unchanged nationally and in Florida over the five years, but manufacturing still accounted for 12.3 percent of the nation’s GDP in 2011, while manufacturing only produced 5.1 percent of Florida’s state GDP.

mbasch@baileypub.com

356-2466

Florida’s Gross Domestic Product

Industry% total 2006% total 20112011 value in millions
All industries100%100%$754,255
Real estate and rental and leasing16.8%15.6%$117,383
Government10.5%12.9%$97,307
Health care and social assistance7.1%8.8%$66,254
Retail trade8.0%7.7%$58,199
Professional, scientific and technical services7.0%7.2%$54,672
Finance and insurance6.7%7.0%$52,947
Wholesale trade6.5%6.3%$47,713
Manufacturing5.1%5.1%$38,338
Accommodation and food services4.0%4.4%$32,926
Information4.1%4.2%$31,482
Construction7.7%4.0%$29,989
Administrative and waste management services4.2%3.8%$28,533
Transportation and warehousing, excluding Postal Service2.8%2.9%$22,108
Other services, except government2.7%2.8%$21,141
Utilities2.0%2.0%$14,805
Arts, entertainment and recreation1.6%1.8%$13,567
Management of companies and enterprises1.3%1.5%$11,138
Educational services0.8%1.0%$7,911
Agriculture, forestry, fishing and hunting0.8%0.8%$6,288
Mining0.2%0.2%$1,545

Source: Florida Legislature Office of Economic and Demographic Research, U.S. Department of Commerce Office of Economic Analysis

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