Ten years ago, Fort Lauderdale was still badly bruised from the housing market’s collapse, a global financial panic and the local economy’s worst recession since the Great Depression of the 1930s. The crash knocked a hole in the local job market that appeared almost impossible to patch.
“I remember sleepless nights at the height of recession. We were looking at 100,000 people unemployed in Broward County. And where were all those new jobs going to come from?” recalls Bob Swindell, president and CEO of the Greater Fort Lauderdale Alliance, the primary economic development agency for the city and the rest of Broward. “Nobody really knew where it was going to end. We had so much dependent on real estate.”
Now, of course, as anyone can tell from the surge in high-rise development in and around downtown Fort Lauderdale, real estate has rebounded. And employment in the Fort Lauderdale metropolitan area has come roaring back, reducing the Broward unemployment rate to historically low levels.
And although the current decade-long economic expansion is aging amid tight labor market conditions, it may have more life in 2020 and beyond. Broward’s expanding economy, after all, is bigger than many residents may realize. The county’s economic output totaled a whopping $96.8 billion in 2018, up 2.8 percent from 2017 – more than the combined economies of Panama, Jamaica and the Bahamas, according to World Bank data.
The so-called Great Recession officially started a dozen years ago, in December 2007, and lasted 18 harrowing months until June 2009. But Broward’s unemployment rate kept rising after mid-2009, peaking at 10.5 percent in 2010 before starting a steady descent in 2011 as the local economy slowly recovered. By October 2019, the unemployment rate in Broward had fallen to 2.8 percent, which equated to 29,600 jobless residents.
“For Broward and the rest of the state, the current economic expansion appears more sustainable than previous ones,” says Mark Vitner, a senior economist at Wells Fargo Bank. He expects the number of jobs in Broward to increase in line with his forecast of 1.8 percent employment growth statewide in 2020.
The short-term outlook is upbeat for local hiring in Broward, Miami-Dade and Palm Beach counties. A survey by temp agency Manpower shows that 24 percent of South Florida employers expect to add to their employment in the first quarter of 2020 while just 3 percent expect to reduce employment from January through March. The survey found that 71 percent of South Florida employees expect no change in their employment in the first quarter, and just 2 percent are unsure.
In the long term, trends for South Florida look promising with job growth across sectors – although better-paying tech jobs, while increasingly plentiful, still lag behind the region’s more traditional employers such as construction or hospitality. Industry experts say that while South Florida does not yet have a reputation as a tech hub, it’s still seen as an attractive place to move compared to many traditional tech centers. However some local business leaders also warn that for South Florida’s economic growth and diversification to continue, leaders must plan for the challenges posed by climate change and sea-level rise.
Over the next five years, South Florida’s unemployment rate is likely to increase, although not precipitously, according to Sean Snaith, an economist at the University of Central Florida. Snaith has predicted that the tri-county area’s monthly unemployment rate will average 3.8 percent in 2020, gradually increasing to 4.6 percent by 2024 – still well below the post-recession peak in 2010.
Vitner, the Wells Fargo economist, said he is “very positive” about the Florida economy in the years ahead. “What makes me most optimistic is you don’t see any big imbalances that you typically see several years into an economic expansion,” he says. “It’s when commercial and residential real estate are grossly overbuilt that Florida tends to run into its biggest problems. That’s when Florida’s economy tends to underperform the nation’s and goes into deep recessions that take us a long time to recover from. I just don’t see that anywhere in the state of Florida.”
Construction, however, is still a pillar of the local economy.
Among nine major industries in Broward, the construction industry had the fastest growth in employment from mid-2015 to mid-2019, jumping 21.6 percent to nearly 50,000 jobs with an average weekly wage of $1,078. Financial industry employment grew at the second-fastest rate over the last four years, rising 11.3 percent to nearly 60,000 jobs with an average weekly wage of $1,208.
Unfortunately, the composition of Broward’s employment expansion hasn’t been ideal from a pay perspective. Figures from the federal Bureau of Labor Statistics also show that two of Broward’s highest-paying industries had some of the slowest growth in employment over the last four years. Manufacturing employment grew 4.1 percent to about 28,000 jobs paying an average of $1,078 a week.
The highest average wage among the nine local industries is $1,654 a week in the information industry, including software publishers and other types of technology companies. But employment in this industry grew just 2.3 percent to about 18,000 jobs from 2015 to 2019. By contrast, low-pay employment in leisure and hospitality grew three times faster, rising 7.4 percent to about 96,000 jobs with an average weekly wage of $471.
No Amazon, but more attention
Local employment in the information industry could have gotten a big boost if South Florida had succeeded in attracting the second corporate headquarters of online retailing giant Amazon. The Seattle-based company searched the nation for a location and included South Florida in its short list of 20 finalists before choosing Crystal City, Virginia, just south of downtown Washington, D.C.
But South Florida’s tri-county effort to attract Amazon’s second headquarters was hardly a total failure. “It got the attention of a lot of other technology companies,” Swindell says. “The technology community globally was watching what Amazon was doing. We’re still enjoying some of the residuals from that.”
Another residual benefit from the tri-county bid for Amazon’s “HQ2” prize is closer ongoing cooperation among the primary economic development agencies in Miami-Dade, Broward and Palm Beach counties. “Even Miami-Dade couldn’t check all the boxes for Amazon,” Swindell says. “Our teams get together more regularly now than they did before … We realize that, on projects like this, anywhere that would land in South Florida would benefit the whole region.”
In addition to trying to recruit Amazon and other large tech-driven companies, the Greater Fort Lauderdale Alliance also is taking steps to help entrepreneurs grow local tech companies. For example, the economic development agency is working with Nova Southeastern University to open an “innovation center” on a vacant floor in a library at the Davie campus. “The idea is to be an incubator and accelerator for start-up businesses,” says Swindell, a board member of the FAU Research Park at Florida International University. “We talk about diversifying the economy; I’m a firm believer in diversifying our approach to economic development as well … You never know which one of these start-ups is going to hit it big.”
One of Broward’s biggest hits in the tech sector is Fort Lauderdale-based Citrix, a global developer of digital systems that enable remote employees to work for their companies wherever, and on whatever device, they choose. The 30-year-old company has more than 8,200 employees worldwide, including about 1,800 in Fort Lauderdale. But during the humble beginnings of Citrix, “they were a three-person start-up working out of a third bedroom in Coral Springs,” Swindell says.
Citrix has hired 500 engineers worldwide in the last 18 months, including some who took jobs at the company’s home office in the Cypress Creek area of Fort Lauderdale. The city has a mixed appeal to out-of-town candidates for local jobs with Citrix, says Chris Fleck, vice president and technology fellow at Citrix. “The weather’s great. There’s no state income tax. The housing prices, versus where we compete for talent, [are] good,” he says. But South Florida lacks recognition as a technology center on par with places such as Boston or Silicon Valley. “I would say it’s not well perceived as a technology hub, even though there is a lot of rich technology history here,” says Fleck, who moved to South Florida from New York about 20 years ago as an IBM employee. “The original IBM PC was developed here. The first smartphone ever was developed here.”
Citrix is taking a harder look at homegrown talent. The company has several initiatives to help local college students who see an occupational future in technology. Fleck says the company is pursuing “tighter engagement” with Nova Southeastern, FAU, the University of Miami and Florida International University. Citrix employees work with the universities in positions such as curricula advisers and adjunct faculty. “We get really good insight into top talent,” he says. Citrix also hires interns and sometimes offers them permanent jobs “before they finish their senior year, so they don’t move away.”
The Amazon HQ2 campaign fit well with the emphasis at South Florida’s top economic development agencies on recruiting companies with high-wage jobs. In 2019, for example, Greenwich, Connecticut-based ICON International Inc., a specialty finance company that arranges corporate barter deals, opened a 15-employee satellite office in Fort Lauderdale, and Techtronic Industries, whose tools and appliances include products sold under the Dirt Devil brand, moved its U.S. headquarters to 450 E. Las Olas Blvd. In a press release, Techtronic said the move will bring approximately 75 executive and other new jobs to the area.
Perhaps the biggest local win in 2019 on the economic development front was Spirit Airlines’ decision to move its headquarters from Miramar to Dania Beach – instead of an out-of-town location. Spirit plans to move 1,000 employees to its new home office at the master-planned Dania Pointe development, consolidate several local training facilities on the same campus, and create 225 new local jobs. While making their decision, proximity to Fort Lauderdale-Hollywood International Airport was important to the Spirit executives, Swindell says, “but they were also quick to say, ‘We don’t have to have our headquarters here. We have choices.’”
Building for success
Other types of companies in Greater Fort Lauderdale have choices, too, and some may consider other locations if Broward’s public infrastructure needs aren’t met. For example, Phil Purcell, president and CEO of the Marine Industries Association of South Florida, has long pushed government leaders to demolish the aging drawbridge over the New River for train traffic and replace it with a taller drawbridge so large boats could pass under it easily. He also says the train track leading to the bridge should be elevated above busy Broward Boulevard, not at grade, creating a traffic choke point.
The chief of the not-for-profit marine trade group says members generally expect good business conditions in 2020. “Our members as a whole feel pretty optimistic,” he says. “A year ago, they would have been talking more about recession. Now, they’re not necessarily talking about that, but they are cautious.”
But Purcell says the aging drawbridge and other looming infrastructure issues are potential obstacles to long-term prosperity in Fort Lauderdale: “Miami has been visionary with Metrorail, with signature architecture. We’ve been reactive here, whether it’s our infrastructure with our sewers and our water, or transportation; we’re not ahead of it. We’re reacting to it.”
Addressing climate change and sea level rise may prove to be Fort Lauderdale’s biggest infrastructure challenge. “Tides are getting higher,” Purcell says. “These king tides aren’t going away, and we need to build the infrastructure properly.”
That’s one reason why the Greater Fort Lauderdale Chamber of Commerce is producing an international conference on private-sector responses to sea level rise and climate change. The International Resiliency Convention and Conference (IRCC) will be held in December 2020 at the Fort Lauderdale Marriott Harbor Beach Resort & Spa. “We’re bringing the world to South Florida to talk about this from an entrepreneurial aspect, not a regulatory aspect per se,” says Dan Lindblade, the president and CEO of the chamber.
Lindblade said he expects a steady local economy in 2020, citing the views of the chamber’s Council of Economic Advisors, which meets quarterly with the Federal Reserve Bank of Atlanta. Through 2020, “they are projecting a glidepath similar to the one we’re on right now, so anywhere between 14,000 to 20,000 year-over-year job growth. That’s pretty steady with the numbers we’ve been seeing.”
But the chamber chief said rising seas could damage the local economy if left unaddressed. “Whether it’s surface or sub-surface, infrastructure is going to continue to be an issue. The long-term issue we have to deal with is sea level rise, global warming and resiliency,” Lindblade says. “We just have to address it and take one bite of the elephant at a time. If you don’t address it, if you don’t show something to the actuaries, they’re going to raise the insurance premiums through the roof. We have to adapt.”