2021 Economic Forecast: University of North Florida economist Albert Loh optimistic
Posted by Carlos Renteria on
By: Mark Basch
When economists were making their 2020 forecasts 12 months ago, nobody could have seen what was coming.
The first cases of COVID-19 were detected in December 2019 in China and it would be months before people realized the impact it would have on the global economy.
Jacksonville felt the impact much like the rest of the U.S., with businesses shutting down in the spring and thousands of local residents losing their jobs, at least temporarily.
“We have reasons to be optimistic about a robust recovery of the local economy in 2021,” said University of North Florida economist Albert Loh.
“As more COVID treatments and vaccines become widely available in the early half of the year, many economic activities, including those in the worst-hit sectors such as accommodations, hospitality, entertainment and air travel, can return more fully,” he said.
The most recent available data shows Northeast Florida has recovered strongly already from the big job losses in the spring, but the economy still has more to do to return to its pre-pandemic level.
The unemployment rate in the Jacksonville metropolitan area was 5% in October, much lower than its April peak of 11.2%. It’s still much higher than the record 2.6% rate in December 2019.
Jacksonville area businesses reported 29,600 fewer jobs on their payrolls in October than they had 12 months earlier, a 4% decline.
More recent data on statewide trends in Florida shows continued improvement. The number of new claims for unemployment insurance has been dropping steadily since July and fell to 20,787 in the week ended Nov. 28, the lowest level since March.
New claims averaged about 5,500 in the first 11 weeks of 2020 before pandemic-related business closings began.
Weekly claims in Florida peaked at 506,670 in the week ended April 18.
Even if a vaccine successfully ends the pandemic in 2021, the economy will continue to feel long-term effects, Loh said.
“Many businesses may continue to rely heavily on online operation for fear of COVID returning as a seasonal threat and to serve customers who became accustomed to such a transaction mode during the height of the pandemic,” he said.
“Meanwhile, the damage to the state revenue in 2020 will trickle down to impact local budgets on public services, including education, transportation, and others next year.”
At least 2021 will be an improvement.
“We may continue to feel the impact of the pandemic in the next couple of years, but all indications suggest that next year will be a much better one than 2020,” Loh said.