Increased road construction in FL's Port St. Lucie
is just one sign of the upbeat economic times throughout FL.
January 21, 2002
NATIONAL
Bad Times? Not in a Thriving Florida Town
By DAVID LEONHARDT
PORT ST. LUCIE, Fla., Jan. 18 — If there is one place in the country that is escaping the current recession, it may be this city of almost 100,000 people about 100 miles up the Atlantic coast from Miami.
Bulldozers seem to be everywhere, and builders continue to sell houses before they have completed them. A new wing of St. Lucie Medical Center opened last month. The city's first four-year college opened this week.
Wal-Mart will soon start building a supercenter across the street from a 100,000-square-foot store that has become too small. One of the area's biggest employers plans to add 300 workers by April to the 1,000 it already has.
In the last year, the Port St. Lucie metropolitan area has had the fastest growing economy in Florida, and Florida has had the fastest growing economy in the United States. The state may not be booming the way this city is, but it is holding up better than almost anywhere else, data indicate and economists say.
"Florida is the strongest significant economy in the country, hands down," said Mark Zandi, the chief economist at Economy.com, a research firm in West Chester, Pa., that follows regional trends.
The state's relative strength goes a long way toward describing the current recession. The economy here has comparatively little manufacturing, the sector hit hardest in this downturn, and many of the items Florida does make, like boats and orange juice, are selling better than the clothing, lumber, steel and semiconductors from other regions.
At the same time, Florida depends to an unusual degree on perhaps the only two large sectors of the American economy that have been growing in recent months: health care and home construction. Low interest rates have kept house prices affordable for many people and have allowed the influx of new Florida residents to continue. Meanwhile, the state's population, the oldest in the nation, is spending more on medical care as it ages and as expensive new treatments become available.
Florida has not escaped the recession. Tourism of all kinds, including visits to Disney World and cruises sailing from Miami, fell sharply after the terrorist attacks of Sept. 11, and the unemployment rate is rising because job growth has fallen below population growth. With tax revenues dropping, Gov. Jeb Bush and the State Legislature cut $1 billion, mostly in education spending, from the state budget last month.
But the state still stands out. In the last year, as the nation's economy lost more than a million jobs, Florida gained 138,000 jobs, a 1.9 percent increase that is higher than in any other state, according to the Labor Department in Washington. In the Port St. Lucie metropolitan area, which includes Fort Pierce to the north, jobs have increased 4 percent.
"We're doing better than O.K.," said John H. Auld, a commercial real estate agent and the leader of a group of executives who try to attract companies to the area. This month, Mr. Auld will be talking to local developers, builders and real estate agents about the area's economy. The title of his presentation will be "What Recession?"
Port St. Lucie's roots date only to the late 1950's, when developers tried to draw Northerners here by taking out magazine advertisements that offered house lots for $10 down and $10 a month.
But the city remained a sleepy northern outpost of South Florida, with most lots empty, through much of the 1980's. Only when many people decided that real estate in West Palm Beach had become too expensive did they come here, 50 miles farther north on Interstate 95, residents say. Since 1990, Port St. Lucie's population has grown to about 95,000, from 55,000, as people moved here from other states and from more expensive communities to the south.
"There's a huge difference in the price of houses," said Andrea Heady, 32, an assistant manager at a local bank who moved here with her husband a few years ago from Odessa, Tex. Last year, they moved into a gated community, and their three- bedroom, 2,500-square-foot house with red roof tiles and a screened porch cost less than $200,000.
"I can guarantee you there's no way I could get a house like this in West Palm," Ms. Heady said.
In fact, the city's relative lack of wealth has been a major reason for its growth. In recent years, the area's low wages and high unemployment rate — partly a result of its large number of seasonal agriculture jobs, like grapefruit picking — have attracted companies looking for new workers in a tight labor market. QVC, the television shopping channel, opened a call center here in early 1999, and three other call centers soon followed.
One of them, Convergys, has turned a failed department store in an old mall into a bustling floor of cubicles, headsets and computer screens where 1,000 employees now work in shifts between 6 a.m. and midnight, answering and making calls for AT&T and other large companies. The center will start operating 24 hours a day next month and hire 300 more people, managers say.
The new jobs, with starting pay between $7 and $9 an hour, are unlikely to erase the 25 percent gap between average incomes here and those in the rest of the state, but they have helped raise wages at the bottom of the salary scale in the last few years, local officials say. Between 1998 and 2000, the average wage in St. Lucie County increased 11 percent, or $1.12, to $11.78, an hour.
The real boom here continues to be in construction. New two-story Walgreens and Eckerd drugstores continue to go up at major intersections, and local developers say houses, with an average price of $150,000, are selling before they are finished.
"There's no such thing as a spec home," Paul J. Hegener, the president of Core Communities, said.
The combined value of the building permits issued in the county last year was 35 percent higher than those issued in 2000. The value of permits in the first two weeks of January has already exceeded the value of permits in the entire month last year, the county reports.
Overly optimistic building in the early 1990's caused Florida to suffer greatly in the last recession. If house prices begin falling in other parts of the country this year, making it hard for people to sell their houses and move to Florida, the state could be in for a rough 2002, economists say.
But most analysts say that banks and developers have remained fairly conservative in recent years.
"We have not seen the same overbuilding that hurt Florida in 1990 and 1991," Dave Denslow, an economist at the University of Florida in Gainesville, said.
Barring a new downturn, Port St. Lucie's biggest problem will be handling traffic, Mayor Bob Minsky said.
Already, the city has upset some residents by planning to evict people from 167 houses so it can widen a road in the next few years.
Ms. Heady, the bank manager, said even she and her husband notice how the city has changed since they moved here. "To us, sometimes it seems like traffic," she said. "But then we go to Miami, and we remember what real traffic is like."