Florida's economy is improving, but the state is likely three years away from returning to normal, according to the latest economic overview report by the Florida Legislature's Office of Economic and Demographic Research.
The research office's reports have consistently stated that the Florida economy still has a long way to go to complete the recovery, but this month's report was the first time it put a date on it.
"Florida growth rates are gradually returning to more typical levels. But, drags are more persistent than past events, and it will take a few more years to climb completely out of the hole left by the recession," it said.
"In the various forecasts, normalcy has been largely achieved by fiscal year 2016-17."
A rebound in the housing market is a key to the state's recovery and conditions are improving, the report said. However, like the rest of the economy, housing still is not all the way back.
Existing home sales in the first nine months of this year were at 89.4 percent of Florida's 2005 peak, an improvement from the 84.9 percent level for all of 2012.
Building permits through the first eight months of this year in Florida were 42.8 percent higher than last year, "but the level is still low by historic standards," the report said.
Florida is still seeing high levels of foreclosure activity. Citing data from RealtyTrac, the economic overview report said foreclosure activity fell 8 percent in the third quarter following six consecutive quarters with increases. However, Florida still had the nation's highest foreclosure rate.
Jacksonville continued to rank among the highest U.S. metropolitan areas in foreclosure activity in the third quarter, ranking second behind Port St. Lucie. Eight of the top 10 metropolitan areas for foreclosure activity were in Florida.
Florida's unemployment rate has dropped from 9.4 percent in December 2011 to 7 percent in August 2013, but the research office continues to point out that much of the drop is attributed to a reduction in the "participation rate."
Discouraged workers who have stopped looking for work or are delaying entry into the labor force are not included in the unemployment statistics. The research office said if the labor force participation rate was the same in August 2013 as it was in December 2011, Florida's unemployment rate would have been 8.4 percent in August.
Because of the federal government shutdown, labor force data was not collected on time in October, so the Florida Department of Economic Opportunity has not reported any new state unemployment statistics since the August report.
The state agency is scheduled to report unemployment data for September and October, as well as revised August data, this Friday.
Federal government budget issues continue to impact Florida's economy, the overview report said. Florida's personal income showed strong 1.5 percent growth in the second quarter this year, but that was "largely caused by a return to normalcy after an artificial decline" in the first quarter.
"The first quarter decline mainly reflected the effects of the expiration of the 'payroll tax holiday' and the acceleration of bonuses and personal dividends to the fourth quarter of 2012 in anticipation of unrealized changes arising from resolution of the 'Fiscal Cliff,' which particularly affected Florida," the report said.
The report said the effects of sequester-related federal budget cuts have been "muted" so far, but those cuts could hurt Florida more in the future.
"While it is clear that there is no meaningful support for the current sequester provisions, agreement has not been reached on a long-term replacement," the report said.
"It is likely that any of the proposed alternatives will attempt to generate a similar amount of savings and have an equal or greater detrimental impact on Florida's economy."
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