GOBA Economic Update
You remember Sky Mall, don’t you? Chances are if you flew on a commercial airline before the recession, there was a copy of a Sky Mall catalog waiting for you in your front seat pocket. But alas, due to the unforgiving nature of the Great Recession, Sky Mall filed for bankruptcy protection last year.
You might be wondering, “Jack, the great recession officially ended in June 2009, what does that have to do with Sky Mall’s bankruptcy… 6 years later?!”
As I learned at the Greater Orlando Builders Association’s Economic Update, there is a surprising connection. As part of the presentation, Dr. Sean Snaith spoke about the slow growth that businesses have been facing since the US economy officially came out of the Great Recession and his forecast for the future.
Dr. Snaith, who was honored by Bloomberg News as one of the country’s most accurate forecasters, cited that this sub-par growth since 2009 is primarily attributed to two factors. First, prohibitive legislature such as the Dodd-Frank Act, which so far has added 22,296 pages of additional rules to the Code of Federal Regulations, has complicated current law and made the process of conducting business less efficient in the US.
The second factor contributing to the economy’s slow growth has been the absence of robust consumer spending. This historically strong force behind economic growth, which has followed previous recessions like clockwork, is clearly missing during this recovery. People simply aren’t spending as much of their hard earned dollars on the ground, much less in the air, and the lack of spending hasn’t translated well for the US economy or Sky Mall’s bottom line.
The news wasn’t all bad. While Dr. Snaith amused us with Sky Mall’s peculiar product offerings like the Portable Hot Tub and the Scooter carry-on, he also mentioned that the US economy remains more robust than the economies of our global counterparts – particularly big players such as Brazil and China – regardless of relatively slow growth at home. However, Dr. Snaith did warn that touting this achievement would be equivalent to a patient bragging about being the healthiest patient in an ICU ward.
Luckily for us, Florida and more importantly, Orlando and Central Florida’s outlook is no where near as bleak as the global environment. Florida’s housing market recovery continues, led by double-digit price appreciation and a shrinking pool of distressed properties. Orlando’s growth has outpaced that of Florida and the National market and has emerged as a bright spot for current and future development; in fact, Dr. Snaith forecast a 6% growth in the construction industry over the next 5 years. I am personally very excited to see how far Orlando has come since the housing crisis, and cannot wait for the City Beautiful to continue its upward trend into the National spotlight.
The Melrose Corporation is quite pleased to have had the opportunity to listen to Dr. Snaith discuss Central Florida’s economic outlook. Our company is a proud sponsor of GOBA’s Developers Council this year, and I look forward to sharing more of our experiences at upcoming events.
One last note: if you’re saddened by Sky Mall’s demise, don’t be! They have re-launched through their website and plan to be in airline seat pockets once again before the end of the year. They no longer carry the portable hot tub (don’t worry, I checked) but at least it’s great to see things are finally looking up!