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Lutgert College of Business in the News

This is the text of a story in Gulfshore Business, April 2013

Is the Economic Recovery in Southwest Florida Going to Last?

If you’re listening to one economic expert at the start of a given week, there’s a good chance another will have a contrarian perspective by week’s end.

With that in mind, we present views from three insiders with different vantage points who spoke recently at the annual Market Pulse, held at Florida Gulf Coast University and presented by the university and the Bonita Springs Area Chamber of Commerce.

For Gary Jackson, director of the Regional Economic Research Institute at FGCU, the data yields a tentative thumbs-up.

“We’re optimistic, but we’re cautiously optimistic,” he says, citing trends that show impacts of the recession—technically over in June 2009—will linger well beyond that upcoming four-year anniversary. “The numbers have been resetting and setting us up for the next recovery, which is what we’re now in.”

Improvements in a battered housing industry and strong numbers in tourism have propelled the local bounce-back, though Jackson conceded unemployment—which hovered at 7.6 percent in Collier County in December and 8 percent in Lee—is not where it needs to be to significantly boost morale.

The return to prosperity tends to vary by location, according to Brad Hunter, chief economist and national director of consulting for MetroStudy, a Houston-based research/consulting firm with nine Florida offices.

He also referred specifically to housing numbers, which indicate a robust industry in areas such as Naples, Estero and Bonita Springs, while locales such as Lehigh Acres and Cape Coral continue to struggle.

In Fort Myers, he says, the “move-up market” of homebuyers with good jobs and money in the bank is driving demand, but the entry-level segment remains weak.

“Builders are getting better at competing against short-sale homes and foreclosure homes, but there’s a huge difference between what’s going on in Bonita/Estero than Lehigh Acres or Cape Coral,” he says.

Nationally, Sandra Pianalto, chief executive of the Federal Reserve Bank of Cleveland, says a decrease in personal debt-to-income ratio—which peaked at 130/100 in 2007 and is now down to 110/100— indicates good long-term signs for individuals, but won’t spur massive economic growth nationally.

“It’s trending positive, but it means people are being more frugal and spending less,” she says, “not to mention their incomes are growing slower, too. That’s why the recovery doesn’t happen faster.”

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