Lee EBCS: Fourth Quarter 2024 Report
December 02, 2024 / RERI Research Team
Lee County Executive Business Climate Survey Fourth Quarter 2024 Report
Despite challenges from political uncertainty, labor disputes, and natural disasters, the national economy remained resilient through October 2024. The national unemployment rate measured at 4.1 percent in October 2024, staying within the range often considered “full employment” for an economy. Real GDP advance estimates for the third quarter showed an annualized growth rate of 2.8 percent primarily driven by consumer spending on goods and services. Reflecting this growth, consumer sentiment rose 2.5 points in November 2024, according to preliminary findings from the University of Michigan Survey of Consumers. In their press release, the University of Michigan does note that preliminary findings in their November figures were derived from surveys that concluded before the results of the 2024 election.
Similarly, optimism amongst small business owners continued to improve in October 2024, rising 2.2 points from the previous month to 93.7, according to findings from the latest National Federation of Independent Businesses (NFIB) Small Business Economic Trends. Inflation was the top issue reported by business owners, identified as the single most important problem by 23 percent of respondents to the monthly NFIB survey. Core inflation (all goods minus food and energy) measured by the Consumer Price Index (CPI) remained at 3.3 percent in October 2024. The Personal Consumption Expenditures (PCE) price index, an alternative measure of inflation, corroborated findings from the CPI, with core PCE holding steady at 2.7 percent in September (the latest month available). Improvement in inflation numbers, along with a strong labor market, should continue to reinforce confidence in the Federal Open Market Committee (FOMC), which has lowered the Federal Funds rate by a total of 75 basis points over its past two meetings. The committee is scheduled to meet one more time before the end of the year and markets are split on whether the committee will cut the Federal Funds rate by another 25 basis points by the end of 2024 (as of November 20th, 2024).
Economic conditions were not as favorable locally, according to the latest findings from the Executive Business Climate Survey. This survey, conducted among business owners and executives after Hurricane Milton and before the 2024 election, revealed a 3.3-point drop in the Executive Business Climate Index (EBCI) for Lee County, bringing it to 52.1 in the fourth quarter of 2024. Milton was the third Hurricane to affect Lee County this year (Debbie and Helene). These three events have set back some of the advances on the recovery from Hurricane Ian, especially for business in the Accommodations industry. The decline in the EBCI was attributed almost entirely to worsening local economic conditions, which fell from 49.3 to 41.1. Despite the impact of Hurricane Milton, the long-term outlook among business owners remains relatively stable, with future economic and industry conditions slipping only 0.7 and 0.3 points, respectively. Future investment and hiring trends are somewhat flat but remain below the historic average. Historically, Lee County and Southwest Florida benefit from a strong national economy.
The latest survey also included questions on company health insurance offerings. Fifty-nine percent of executives reported that their companies provide health insurance as a benefit, while 41 percent do not. Of those surveyed, 58 percent expressed confidence in their ability to offer health insurance over the next year, though this confidence declines over time, with only 48 percent believing they can maintain this benefit over the next five years. Additionally, 47 percent of executives expect health insurance costs to increase by at least 10 percent in the coming five years. Health insurance remains essential for attracting and retaining workers, as over half of respondents indicated it was somewhat or very important for recruitment and retention.
Downloads:
Lee County Executive Business Climate Survey Fourth Quarter 2024 Report
Previous Lee County Executive Business Climate Survey Reports
Acknowledgments:
We would like to thank all of the executives that participated in our survey. Without your continued feedback each quarter, our surveys would not be possible. Furthermore, we would also like to thank our partners, the Horizon Council and Lee County Economic Development, for helping make the survey happen.
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