National, State and Local Economic Outlook January 6th, 2009

The Business Cycle

REFERENCE DATESDURATION IN MONTHS PeakTroughContractionExpansion Quarterly dates are in parenthesesPeak to Trough Previous trough to this peak December 1969(IV) November 1970 (IV)11106 November 1973(IV) March 1975 (I)1636 January 1980(I)July 1980 (III)658 July 1981(III)November 1982 (IV)1612 July 1990(III)March 1991(I)892 March 2001(I)November 2001 (IV)8120 December 2007(IV) ?? 73 Recent Business Cycle Data

REFERENCE DATESDURATION IN MONTHS Average, all cycles: ContractionExpansion Peak to Trough Previous Trough to Peak (32 cycles) (16 cycles) (6 cycles) (10 cycles)10 57 Historical Business Cycle Data

U.S. Forecast  U.S. Currently in a Moderate Recession (not depression)  12 months and counting…  Recession: 2007Q4 to 2009Q2/Q3  Housing, credit freeze, turmoil in financial markets and volatile energy prices have created an environment that is toxic for economic growth.

U.S. Forecast  Short-run threat of inflation subsided:  Energy prices – bubble has burst  Inflation gone, but not forgotten  Extremely stimulative fiscal and monetary policies  Once recovery takes root prices could rapidly rise

U.S. Forecast  Fed has cut target interest rate to near zero  Quantitative easing  Another stimulus package - $500 billion, $750 billion or even $1 trillion?  Stimulus should be a cocktail of drugs to fight the recession  Rebate Checks  Infrastructure  Investment incentive  Treasuries the latest bubble?

U.S. Economic Outlook From IEC 4 th Quarter 2008 Forecast 2008 Q Q Q Q Q Q3 Gross Domestic Product % Chg, Annual Rate Consumer Price Index % Chg, Annual Rate Oil - WTI ($ per barrel) Total Consumption % Chg, Annual Rate

A look at the Florida housing data: November 2008 Snapshot

Realtor SalesMedian Sales Price Region or MSA November 2008 November 2007 %Chg November 2008 November 2007 %Chg STATEWIDE 8,5718,2694$158,300$217, Orlando 1,2771,108 15$167,900$239, Panama City $190,000$192,500 Fort Walton Beach $191,300$199,300-4 Jacksonville $150,000$178, Tallahassee $170,000$201, Lakeland-Winter Haven $127,400$158, Florida Sales Report – November 2008 Single-Family, Existing Homes

Florida Sales Report – November 2008 Single-Family, Existing Homes Realtor SalesMedian Sales Price Region or MSA November 2008 November 2007 %Chg November 2008 November 2007 %Chg STATEWIDE 8,5718,2694$158,300$217, Orlando 1,2771,108 15$167,900$239, Fort Myers-Cape Coral $106,100 $228, Marco Island $262,500$500, Punta Gorda $97,700$177, Miami $224,700$359, Fort Pierce-Port St. Lucie $130,500$206,300-37

Realtor SalesMedian Sales Price Region or MSA November 2008 November 2007 %Chg November 2008 November 2007 %Chg STATEWIDE 2,2782,474 -8$130,600$185, Orlando $76,100$140, Pensacola $375,000$225,00067 Panama City $258,300$260,700 Jacksonville $131,400$135,800-3 Gainesville $133,300$146,700-9 Ocala 3250 $95,000$108, Florida Sales Report – November 2008 Existing Condominiums

Realtor SalesMedian Sales Price Region or MSA November 2008 November 2007 %Chg November 2008 November 2007 %Chg STATEWIDE 2,2782,474 -8$130,600$185, Orlando $76,100$140, Miami $172,600$264, Fort Pierce-Port St. Lucie $110,000$170, Melbourne-Titusville- Palm Bay 67 —$113,800$172, Fort Lauderdale $109,400$166, Florida Sales Report – November 2008 Existing Condominiums

A look at the housing data: January 1994 to November 2008

Florida Forecast Scenario for Florida Economy:  Credit freeze further delayed real estate recovery  Recovery will finally start to take root in 2010  Economy s-l-o-w-l-y gains momentum  Short and Long run demographics of the state have changed

Region Population Growth Average % ChgRank Florida Deltona 0.96 Gainesville 1.05 Jacksonville 1.34 Lakeland 1.92 Miami 0.19 Naples 1.34 Ocala 2.21 Orlando 1.63 Palm Bay 0.77 Pensacola 0.48 Tallahassee 0.96 Tampa Averages; Q Forecast

Region Employment Growth Average % ChgRank Florida Deltona Gainesville Jacksonville Lakeland Miami Naples Ocala Orlando 0.21 Palm Bay Pensacola Tallahassee 10 Tampa Averages; Q Forecast

Sector Orlando % Avg. Ann. Gr. Educ.-Health Serv. 3.7 Other Serv. 2.3 Prof. & Bus. Serv. 0.7 Trade, Trans., Util. 0.3 State & Local 0.3 Leisure 0.2 Federal 0.2 Financial 0.0 Information -1.3 Manufacturing -4.5 Const. & Min Averages; Q Forecast

Sean M. Snaith Sean M. Snaith, Ph.D.Director Institute for Economic Competitiveness (407) Thank you