The United States has had 22 documented recessions.  Since the early 1800’s, we’ve seen downturns initiated from post wartime spending to oil crises.  From multiple recessions in a single decade to Black Friday in the 80s, many had thought we had seen the worst.  It is blaringly obvious we had not.  Today’s recession is unlike anything most experts could have predicted.  In addition to the extended length of this recession – already lasting three years when typical recessions last just one or two – is the extraordinary impact.  There isn’t a sector across the market that has been left unscathed.  Times are tough, but you don’t have to read this story to know that.

It’s hard to imagine looking to the future with a positive frame of mind when you consider the state of the economy.  But looking to the future, aided by economic data, will help us find the answers.

One community agency that tracks local economic movements on a daily basis, the Economic Development Commission of Florida’s Space Coast, is looking toward the future with cautious optimism.  If you follow the growth curve of several indicators, they show positive progress over the last few quarters.  However, the labor market is still hurting.  Brevard’s unemployment has doubled in just the past two years and, at the time of publication, over 12.7{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} of our county is out of work. Unemployment is a lagging indicator and will take some time to rebound, but the evidence exists, however slow and despite remaining uncertainty over the future of the space program, Brevard is on a path to recovery.

So as we look toward the long awaited end of one of the longest downtowns in our nation’s history, we felt it would be interesting to take a look at sectors throughout the local economy to see where we stand today vs. one year ago.  As you will find, the majority of our indicators are moving in the right direction.

EDITOR’S NOTES:
*One Year Ago/Then = First Quarter 2009; Today/Now = First Quarter 2010
*Most complete data available at time of publication.
*Data provided by the Economic Development Commission of Florida’s Space Coast

THEN AND NOW

Labor Market
Then
(One Year Ago): Everywhere you turned it was more news about layoffs.  Brevard County lost an average of 950 jobs a month in 2009.  Most of us knew friends, neighbors and family members who fell victim to a shrinking economy which peaked at over 4,000 monthly initial claims for unemployment benefits.  In normal economic conditions, claims typically average around 1,250.

Not only were we shedding jobs, but local companies weren’t creating new ones either.  Year-over-year employment growth remained in negative territory with a 6{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} drop.

Now: A complete about-face one year later and we find Brevard County has experienced a net gain of 900 jobs in the fourth quarter of 2009 alone.  The fourth quarter of any year is usually associated with seasonal employment, but it’s not so cut and dry when you consider that in 2008, we still managed to lose 1,100 in the same quarter.

We aren’t losing as many jobs either, with employment losses in the second and third quarters of 2009 decreasing a combined 38{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} compared to the same quarters of 2008.

Unemployment claims have reversed course and are on a downward path.  The approximate 2,250 newly unemployed people in Brevard in February 2010 represented the lowest monthly total since June 2008.

Employment growth is on the up-tick again.  Although still in negative territory, this year we registered 3{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} growth.

Retail
Then (One Year Ago): Brevard residents cut back on trips to the mall and stretched their dollar further as we saw taxable sales in the county tumble 11{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} in 2008.  It didn’t just start this year, however.  Brevard’s Index of Retail Activity which measures personal consumption in the areas of consumer durables, consumer non-durables, autos & accessories, tourism and recreation spending, has been declining since mid-2006.

Now: In early 2009, the Index of Retail Activity finally ended its three year freefall and began to stabilize. Again, still in negative territory yet drastically reduced, we ended 2009 down just 2{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2}, a mark of stabilization from the previous year.

In July 2009, the government’s Cash-for-Clunkers program came calling and Brevard residents responded, sending taxable sales in the Auto & Accessories category up 9{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} that month.  This was the first large test of consumer confidence that year and the strong numbers are promising as we forge ahead.

Local residents were also not willing to skip Christmas last year.  In another show of positive consumer confidence, taxable sales of consumer durables (e.g. electronics) spiked 25{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} in December from November.

Real Estate
Then
(One Year Ago): ‘Foreclosuregate’ was becoming a new buzzword as we experienced negative sales growth of residential real estate in almost every month of 2008.

Not only were houses not selling, but many sellers experienced sticker shock when they realized their homes were worth considerably less than just a few short years ago, especially those that bought in the last five years. The median sales price of an existing single-family home fell throughout 2008, continuing to freefall from an August 2005 peak of $248,000.

Now: A new year brings new hope for the real estate market.  Sales growth of homes is largely positive as we experienced market growth in every month of 2009 except December.  Properties are selling…but the median price has been nearly halved as it stabilized around $110,000 – $120,000 in mid-2009.

There are also less new homes coming on the market, aiding our eventual return to market equilibrium.  The total number of housing units authorized for construction in 2009 was the lowest since 1975, with just 937 single and multi-family units.  It’s remarkable when you compare that total to 1,550 homes in 2008 and a whopping 8,500 in both 2004 and 2005 (‘boom years’).

It is important to note, that if there is still uncertainty in one sector, it is undoubtedly in real estate.  With several different government stimuli in place to bolster the housing market, we can’t be completely comfortable with the durability of the recovery until these programs expire and we get a true glimpse of whether consumers will still buy real estate. There is also concern about the extent to which purchases of distressed properties are padding sales numbers.  These sales may be contributing to a lower median sales point then expected during a normal, cyclical housing boom.  One bright spot is that any future upward movement in home prices will aid consumer spending by easing the significant wealth evaporation that residents have been experiencing over the last few years.

Tourism
Then (One Year Ago): Cutting back on high end, exclusive vacations, many families opted for ‘staycations’ and stayed closer to home to maximize travel dollars. In turn, we saw a significant, worldwide pull back in tourism spending, as both consumer and business confidence and therefore travel, declined hand-in-hand with the larger recession.

Now: People are once again venturing to popular vacation spots like the Space Coast. Brevard’s hotel occupancy rate increased year-over-year in 5 of the last 6 months of 2010.  Travelers are still being budget conscience but the up-tick is a good sign for Brevard and its critical tourism industry.

Multi-day passenger counts for Port Canaveral, the world’s second busiest cruise port, were up 40{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} in February 2010, and cruise revenue was up 43.8{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2}, compared with the same period a year ago.  Year-to-date cruise passenger counts were up 19.4{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2} and multi-day cruise revenue was up 23.4{099636d13cf70efd8d812c6f6a5a855fb6f8f27f35bea282d2df1d5ae896e2c2}.  In the coming months and years, Port Canaveral will continue to usher in its new fleet of 4,000+ passenger cruise ships.

Residents now have more options when it comes to personal and business travel.  There is great optimism present at Melbourne International Airport, with a passenger spike anticipated from the addition of two new airlines, U.S. Airways and Direct Air, as well as continued regional service from Delta Airlines.

Space and Beyond
However positive, Brevard’s economic outlook is muddied by a uniquely local concern. While we’ve known the Shuttle program phase out was coming, what we couldn’t have predicted was the recent flurry of revisions to the Constellation program, that have elevated the U.S. space program to the national stage and ignited an entire community to fight for its history and future all at the same time.

The aerospace industry is in flux.  Initial reports suggest President Obama intends to rely on commercially built spacecraft to carry humans to low-Earth orbit, extend the International Space Station’s lifetime, and abandon plans to send astronauts to the moon by 2020.  However, at the time of publication, a clear vision for the future has yet to be finalized.

We are entering a period of job losses that we’ve planned for some time.  The numbers are still very much developing as the vision unfolds.  Agencies across the state and region have worked, and will continue to work, to bring new opportunities to the Space Coast in an effort to transfer aerospace workers seamlessly to new career paths.  Groups like the EDC, have outlined strategic priorities and goals for the coming years as the community collectively works to make the local climate business-friendly and a tougher competitor in a global fight for few and far between new jobs.  Now is the time when everyone must work together to protect not only a highly-skilled aerospace workforce but the ultimate well-being of our community.

By looking to economic data, an official beginning and an end to any recession can be gleamed.  What proves to be tougher is convincing the public at large on the economy’s status.  When we finally get through this tough economic situation, you may feel or sense it, but don’t expect a complete and sudden turnaround.  Brevard County has a few extra kinks to work through and needs some additional time allowances before we will be home free.  We probably won’t see an immediate return to 2004-2005 ‘boom’ days either, if ever.  After the turbulent ride we’ve been on the last few years, it’s safe to say many of us will be satisfied with just a slight return to economic normalcy…even if it does still mean giving up that occasional $4 cup of coffee in the morning.