Bradenton economy set to boom in 2021, says economist. But it will depend on COVID-19
Once the United States gets a handle on the COVID-19 pandemic, the economy should experience a significant boom in the second half of 2021 and the Bradenton-Sarasota area should be well positioned to benefit.
In his annual forecast to the Bradenton Area Economic Development Corp., this year presented on Zoom, economist Hank Fishkind said that pent-up demand will drive the recovery from the pandemic-induced recession.
“A substantial portion of the economy was able to adapt and thrive, but a significant portion was devastated,” Fishkind said.
The pandemic accelerated some trends, including working from home, the decline of brick-and-mortar retail, and the ascendancy of online commerce, Fishkind said.
The pandemic experience has huge implications for the workplace, which in many cases has shifted to home offices. One of the largest expenses for any business is for office costs. Office space is typically the third largest fixed cost for businesses
But there is collateral damage caused by having office staff work from home. Restaurants and coffee shops that depend on sales to office workers stand to lose a significant portion of their revenue.
“The economic boom won’t totally replace what has been lost during the pandemic,” Fishkind said. “A lot of jobs will be lost forever.”
The recovery trajectory is tied to the path of COVID-19, and until effective immunity is achieved, tourism, travel, trade, and return to an office environment will all be impaired, he said.
Going forward, Fishkind says that he thinks Manatee County has an opportunity to attract more financial services firms, and higher paying, home-based service sector jobs.
“You need to focus on your education system, your community colleges, and your amenities, and that the Bradenton area is a great place to live and work,” he said.
One of the strongest sectors of the Manatee County economy is in real estate sales. Sales increased significantly in 2020 for master planned communities, led by Lakewood Ranch where sales were up 30 percent year over year. Existing single-family home sales were also strong with median prices at an all-time high.
An area of concern continues to be the scarcity of affordable housing. Fishkind suggested that current zoning regulations actually discourage the addition of more affordable housing and urged that a fresh look be taken at unused retail and office space that could be converted into housing.
While Fishkind foresees a growing number of single-family and multifamily housing starts for the Bradenton area through 2025, he expects retail space demands will continue to shrink at an accelerating rate.
There is a huge excess supply of obsolete space available for reuse and there needs to be substantial reform of regulations to spur reuse, he said.
Over the remainder of this year, the huge amount of money the federal government has been infusing into the economy will cause interest rates to rise modestly, along with a 2-3 percent increase in inflation, but the national debt will not be a problem in the short run, he said.
Asked about the voter approved increase in Florida’s minimum wage, eventually to $15 an hour, Fishkind said that it will increase the tempo of automation, especially for lower wage jobs.
This story was originally published January 28, 2021 at 12:20 PM.
