2023 Economic Outlook
Northwest Florida's economic forecast for 2023
Regional business leaders talk about the outlook for the year ahead, plus demographics and statistics
Perspectives on the Year Ahead
President/CEO, LandrumHR, Pensacola
- HIRING OR FIRING? “For the most part, companies are hiring, but as they go into 2023, they are still hurting for people. I went to a conference recently, and I learned that in the health care field there is one nurse for every 10 open positions. In the hospitality industry, it is one person for every six job openings. It’s getting better, but it’s still very painful for many industries. So, a lot of companies are trying to fill the gap with automation, and inevitably everybody is going to have to go there out of desperation. Many companies have resisted doing that, but they have got to find a way to close the job gap and perhaps consider going down the artificial intelligence path. Perhaps using AI to search through resumes for keywords and things of that nature. We’re a very personalized relationship-driven business, so we don’t want to damage our interpersonal relationships by being too abstract or too distant or too techie, but we have had a really hard time, especially following COVID, finding quality people for quality jobs.”
- WORKFORCE: “What we’ve seen over the past year or so is that younger, highly trained workers are job hopping, and we expect to see that trend continue in 2023 especially in the professional fields. It comes down to math; large numbers of Boomers are retiring, and there are just not enough people to fill the gaps in the workforce. I’ll be honest with you, companies and employers have had to lower their standards and become less selective in who they hire. You know, desperate times bring desperate measures kind of thing.”
President /CEO, Florida’s Great Northwest
“I would say manufacturing overall is a big area we’re starting to see build momentum going into 2023,” Conoley says. “And we’re also seeing on the capital investment side that manufacturing and distribution companies in Northwest Florida are starting to be more comfortable with making expansion decisions. Of the various industry sectors in Northwest Florida, aviation and aerospace have always been and, I think, will remain one of the biggest investment sectors because of the six military installations in the region. Another bright spot on the aviation side is the amazing growth in 2022 and on into 2023 of commercial passenger numbers at all four of Northwest Florida’s airports,” says Conoley.
President/Owner, Merrill Land Co./ Great Southern Restaurants, Pensacola
- WORKFORCE: “If you’re in the food service field, obviously you can’t work from home like many other professions, so it took awhile for us to hire some of our good servers back. Going into 2023, there is still a manpower shortage. As a result, we’ve had to quit doing outside catering at our restaurants, and we’ve quit doing a lot of other things because we just can’t get crews together. In large part, the problem is the guy we’re trying to get back at 20 bucks an hour can go pick up sticks for $25 an hour. So for 2023, we’re still in a kind of wait-and-see mode of where we’re going with hiring.”
- RISING INTEREST RATES: “We’re nearing completion of our $26-million Dolphin Oasis capital project at the Gulfarium in Fort Walton Beach. This project has been in our pipeline for several years, but we put it on hold during COVID. Then in 2021, we saw tourism numbers throughout the Panhandle exploding because people and families were not going to Disney World or taking cruises because of COVID. So, those huge tourism numbers and the fact that we’re mostly a drive-to market were the positives that helped us decide to push that button, lock in some favorable interest rates and move ahead with this capital construction, which is on track to open in the spring.”
Founder/CEO, Innisfree Hotels, Gulf Breeze
- WORKFORCE: “I’m hearing horror stories about workforce shortages from hoteliers around the country. I think our approach to these staffing challenges has worked better than most. What we’ve done and will continue to do in 2023 is focus on our culture. We let our employees know they are working for a company that is committed to taking our free cash flow and putting it back in the community.”
- RISING INTEREST RATES: “We went into 2022 with more development projects than we’ve ever had. We had six major capital projects planned with a total investment of over $500 million. On Pensacola Beach, we had three projects about to get underway totaling around $250 million. We were ready to start construction in August, and at that time we were already under construction with a new Best Western hotel. But in August, we canceled all of our Pensacola Beach hotel projects primarily because of rapidly rising interest rates. Our pricing on those projects went up by 50% over our budget in which we had already factored in a big increase in materials and labor costs. Canceling those hotel projects resulted in an economic impact loss of about $175 million in new jobs, construction materials and all the other costs involved in a large capital project. We have 26 hotels, and we’re estimating about a 10% drop in sales in 2023 from 2022. I think 2023 will be flat as far as the income side of it.”
- CAPITAL INVESTMENTS: “On the capital investment side, we’re cutting back 50% on growth. In 2022, we bought four hotels because we were taking advantage of this contraction in the hospitality industry. But as far as building hotels in 2023, that is being put on hold.”
Economic Development Opportunities in 2023 …
Executive Director, One Okaloosa Economic Development Council
Okaloosa County’s focus in 2023 is further development of the 10,500- acre Shoal River Ranch Gigasite, an industrial park located seven miles east of Crestview. The site is largely owned by the Holland M. Ware Charitable Foundation of Idaho. Okaloosa County owns a 750-acre site within the ranch, which is zoned for industrial use.
“For 2023, it is especially noteworthy that the Okaloosa County Board of County Commissioners has initiated efforts to construct a new wastewater treatment plant on the southern end of Shoal River Ranch,” says Sparks.
While still in the planning process, the treatment plant, Sparks says, is slated to be operational by 2026. What’s more, Okaloosa County has an additional 260 acres under contract for purchase on the southern end of Shoal River Ranch that will provide additional land for economic development purposes.
Co-founder/CEO, BitWizards, Fort Walton Beach
- HIRING OR FIRING? “I am always in the hiring mode because we’re always looking for top-notch talented people. I’m not saying that we’re irresponsible about hiring, but what I am saying is if the right candidates come along with the right skill sets, we’re going to act on that and find a place for them in our company. However, with respect to the broad picture of hiring, I do think in the U.S. technology sector there are going to be a ton of layoffs in 2023. I think that a lot of the big tech companies are already preparing to do large layoffs.”
- INFLATION: “Naturally we’re concerned about the issues of inflation, stagflation and recession. With respect to interest rates, we renewed our business line of credit in 2022 just before the interest rates changes started happening. So, we will have a favorable rate for at least another year and made it just under the wire.”
President, Bay Economic Development Alliance
The county is focusing on manufacturing, aviation and construction opportunities in the year ahead. Over the next two years, Bay County expects major capital investments by boat manufacturer Mocama Marine, FedEx, fixed-base aviation operator Southern Sky Aviation, construction company Resia and electrical transformer manufacturer Central Maloney.
Hardin says each company will generate anywhere from $10 million to $55 million in capital investment.
MAJOR DOWNTOWN DEVELOPMENTS
- Florida Institute for Human and Machine Cognition: The $20-million expansion of the institute’s downtown Pensacola campus is under construction. The project will add a four-story, 44,000-sq.-ft. facility adjacent to the IHMC’s downtown headquarters. IHMC is a research institute focusing on human health and performance, artificial intelligence and robotics. IHMC executives say the project is on track for completion by first quarter of 2024.
- Danfoss Turbocor: The company says it will complete its 167,000-sq.-ft. manufacturing plant in Tallahassee’s Innovation Park by the end of March. The $48-million building will triple Danfoss’ current manufacturing capacity and create some 240 jobs. The Danish company manufactures magnetic bearings for use in oil-free compressors for high-efficiency heating and cooling systems.
- Baptist Health Care: The hospital’s new $650-million hospital near downtown Pensacola is 75% complete and scheduled to open in September. The hospital and the 57-acre campus constitute the largest single health care project in Northwest Florida history. When completed, the hospital will have nearly 300 beds and employ about 4,500.
- North Florida Innovation Labs: Construction of the $24-million labs in downtown Tallahassee is on schedule for a mid-2024 opening. The project is a partnership of Tallahassee, Florida State University and Leon County. The 40,000-sq.-ft. business incubator will house 31 labs designed to help technology companies that need specialized, dedicated research facilities to commercialize and grow their innovations. Local officials predict the labs and programs stemming from the facility will produce more than 600 full-time jobs in the Tallahassee region.
- Bay County commissioners have given their approval to a Latitude Margaritaville Watersound expansion project by St. Joe Co. Commissioners have rezoned to residential more than 4,300 acres of St. Joe land adjacent to the Latitude Margaritaville development.
- Calhoun County commissioners have set aside $1.58 million in Hurricane Housing Recovery Program funds for property owners whose homes were destroyed or damaged by Hurricane Michael in 2008. Eligible homeowners can get up to $80,000 for moderate rehabilitation of damaged homes and purchase assistance up to $40,000. The funds were derived from the Florida Housing Finance Corp.
- A surge in passengers in 2022, expected to continue in 2023, has city officials speeding up a $70-million expansion of Pensacola International Airport. Matt Coughlin, airport director, says he hopes to get the design and engineering plans completed in early 2023 and break ground on the expansion in 2024. The project would add eight gates and expand the current security screening area.
- Despite restoration efforts by the Florida Fish and Wildlife Commission, Apalachicola Bay’s famed wild oyster fishery, declared a Federal Fishery Disaster in 2013, remains depleted. Commercial oyster harvesting has been suspended through 2025.
- The county has received more than $7 million from the state for infrastructure improvements and rehabilitation of existing public buildings for community events and senior citizen activities.
- A Miami-based liquefied natural gas company is considering locating a plant near the town of Port St. Joe. Nopetro is a compressed natural gas fueling infrastructure company that has developed a network of stations throughout Florida for medium and heavy-duty vehicles.
- Several Jackson County towns have received more than $26 million for infrastructure improvements and weather hardening of public buildings from the Florida Department of Economic Opportunity and its Rebuild Florida General Infrastructure Repair Program. The towns approved for funding include Marianna, Cottondale, Grand Ridge, Graceville and Greenwood, along with Jackson County.
- State and local officials are working with Dallas-based NaturalShrimp to find financing for construction of a 180,000-sq.-ft. facility for processing shrimp products.
- Amazon’s plans to build a 123,115-sq.- ft. distribution center near Tallahassee are moving forward, local officials say, despite a delay in the company’s national expansion plans.
- Gulf Air Group has selected Crestview’s Bob Sikes Airport for an expansion project. The $16-million investment will result in an aircraft hangar complex totaling 70,000 square feet. It will create 55 jobs, says Nathan Sparks, executive director of One Okaloosa EDC.
SANTA ROSA COUNTY
- With the recent purchase of the Milton Interchange Park, Santa Rosa County now has five industrial parks, with plans underway to add several more. The existing parks are at capacity or filling up rapidly, say county officials.
- High-speed fiber internet is coming to coastal Taylor County in early 2023. Residents along the coast from Steinhatchee to the Leisure Retreats area will be the first in Taylor County eligible to receive high-speed fiber internet service from Tri-County Electric Cooperative.
- County commissioners have approved the sale of the final three available parcels in the Mossy Head Industrial Park. The three parcels, totaling 34 acres, were sold to Onicx Group, a Tampa real estate development and construction company, for $1.3 million, an average of $38,000 per acre.
- The Washington County Industrial Park has been designated “shovel ready” by an independent site certification organization. Economic Development Council President Brandon Lovering says the certification means much of the legwork a company normally would have to do has already been completed.