Lisa Simpson
Jun 11,2010
In: Foreclosure

The Economy in Florida Slipping on Oil

There is word going around that tar balls of oil are littering the famous white beaches of Florida. Apart from being an environmental disaster it has all the potentials to devastate an already mauled economy of the state.

Sean Snaith of Institute for Economic Competitiveness (University of Central Florida) bemoaned the unfortunate timing of this oil catastrophe. Even prior to the rig tragedy that happened in the Gulf of Mexico resulting in the leaking of oil at record pace, Florida was scrambling to get out from the recession blues that had hit the state badly. Today the oil leak is going to impact on everything – hotel industry to sale of condos. It could drown the state into a deeper economic chasm. Snaith warned that it would ripple right through the entire economy of the state. The only question that remains is the magnitude of the disaster.

Last April the unemployment in Florida was 12% – much more than the average of the nation. Even prior to the oil calamity, Snath had predicted that it would be many years before Florida would go below 10% in unemployment. Job growth was pale and anemic.

The foreclosure numbers in Florida, coming after the bursting of the housing boom, remains the highest in the nation as per the findings of RealtyTrac. Recently there were indications that the housing market was stabilizing but the oil tragedy could undo all these small gains. It is tourism on which Florida thrives. It is responsible for 6% of the economic output of the state calculating to $42.3 billion of yearly business as per the observations of Bureau of Economic Analysis. It is vital for employment with tourism employing 900,000 out of the total of 7.3 million workers in the state, according to the estimates of Snaith.

Deborah Breiter of Department of Tourism Events (University of Central Florida) said, “Tourism is what put Florida on the map, absolutely, and it will always be a major economic driver.”

Tourism also indirectly impacts on the economy by reaching out to attendants at gas stations who fill the rented cars to the dry cleaning workers who see to the uniforms of the hotel employees. Bretier further said, “We are intimately entwined in the economy of the whole state. As goes tourism, so goes the state of Florida.”

In 2009 tourists had spent nearly $60 billion that had contributed 21% to the sales tax revenues of the state commented Kathy Torian of Visit Florida, the marketing corporation for tourism of Florida State.

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