from TCPalm.com
Indian River County dodges recession trend; St. Lucie region not so lucky
By Nadia Vanderhoof (Contact)
Thursday, August 28, 2008
VERO BEACH — A national study that measures the economic status of U.S. states and metropolitan areas has ranked Indian River County as the only region experiencing an expansion in Florida.
But that good news might not last too long.
According to Moody’s U.S. Regional Recession Status report on Economy.com, the Port St. Lucie-Fort Pierce metropolitan statisti´cal area is in a recession. The Vero Beach-Sebastian economy is in expansion mode. The study ranked the entire state of Florida as being in a recession.
Mark Zandi, chief economist for Moody’s Economy.com, said Indian River County would likely join St. Lucie.
“This classification is very tenuous, and I wouldn’t be sur´prised if Vero Beach would be classified as being in a recession in two months,” said Zandi, who owns a home in Vero Beach. “I’d say it’s at the end of an expansion cycle.”
Treasure Coast economists were surprised at Indian River’s rankings and even questioned the methodology and rankings of the report.
“I don’t see how they can say that,” said William Fruth, presi´dent of Policom Corp., a Palm City-based economic research firm. “They must have mixed-up a number or something. The area peaked in 2006 as far as I am concerned.”
Merle Dimbath, Treasure Coast economist and owner of Dim´bath Economics in Stuart, agreed.
“I think if you talked with people in retail and finance up there they would laugh if you explained that the area is expanding,” Dimbath said. “I wouldn’t attach any significance to that report.”
According to the Moody’s study, the Palm Bay-Melbourne-Ti´tusville economy is at risk and the West Palm Beach-Boca
Raton-Boynton Beach region is in a recession.
Rankings are based on slowed growth driven by waning hous´ing markets and weaknesses in a region’s manufacturing sector.
Moody’s Economy.com classifies the current economic status of U.S. states and metro areas in four categories: in recession, at risk, recovery or expansion.
For a geography to be considered in recession, the region’s eco´nomic climate during the most recent six-month period must be contracting. If a trough has been reached, the economy has shifted from “in recession” to “recovery.”
If the six-month test shows the region to be in an expansion, then its status is either “expansion” or “at risk.” A region’s econo´my is only in expansion when economic indicators show its eco´nomic growth has yet to reach a peak. If it appears that a local peak may have been reached and certain economic indicators are increasing but at a decreasing rate, then the economy is ranked “at risk.”
The report stated almost half of the nation’s metro economies are in a recession. The recession extends from the Great Lakes to the Gulf Coast, as well as to the Southwest. The report said that in the Southeast, the housing downturn has now permeated the en´tire area and manufacturing is also “in a tailspin.”
Despite the prospect of the Indian River area falling into reces´sion status, Zandi remained positive about the region.
“I think the economic long-term prospects are good and it’s a very attractive place to live in because it’s relatively lower in costs than Miami, Fort Lauderdale, West Palm Beach,” Zandi said. “I was attracted to the area because it’s not tourist based.
“I would not have bought there if I thought the economy was dropping into a deep black hole, although I do watch the Weather Channel more than I used to.”
REGIONAL ECONOMIC CONDITIONS
On the Treasure Coast
Port St. Lucie, metro area: In recession
Sebastian-Vero Beach metro area: Expansion*
* Only region in Florida not considered in a recession or at risk of going into one.
Nearby regions
Fort Lauderdale-Pompano Beach-Deerfield Beach: In recession
Miami-Miami Beach-Kendall: In recession
Orlando-Kissimmee: At risk
Palm Bay-Melbourne-Titusville: At risk
West Palm Beach-Boca Raton-Boynton Beach: In recession
