Lee EBCS: Second Quarter 2024 Report
April 30, 2024 / RERI Research Team
Lee County Executive Business Climate Survey Second Quarter 2024 Report
The US economy displayed mixed signs in the first quarter of 2024, as evidenced by the latest national indicators available. The labor market continued to perform well, headlined by a 3.8 percent unemployment rate in April. The labor force participation rate continued its upward trend since the beginning of Covid, measured at 62.7 percent in March 2024. However, the advanced estimate of real gross domestic product (GDP), a measure of overall economic activity, was measured at a 1.6 percent annualized rate for the first quarter, coming in below expectations set by the Dow Jones at 2.4 percent. These advanced GDP estimates come a month after the collapse of Baltimore’s Francis Scott Key Bridge. The collapse of the bridge and subsequent shutdown of the Port of Baltimore is likely to lead to some supply chain disruptions throughout the economy in the coming months.
Personal Consumption Expenditures (PCE) price index, the preferred inflation measure of the Federal Open Market Committee (FOMC), remained elevated in its latest readings, increasing 2.7 percent in March 2024 over March 2023. Inflation has remained sticky over the past few months and has been noted by the FOMC, stating in their March press release that “inflation has eased over the past year but remains elevated.” Furthermore, the committee also said in the press release that they have no plans to reduce their target rate until they have “gained greater confidence that inflation is moving sustainably toward 2 percent”. The lack of progress being made on moving inflation toward the FOMC’s target, coupled with potential supply chain disruptions from the shutdown of the Port of Baltimore, could result in the Federal Funds rate remaining elevated for a longer period of time. The FOMC is set to meet again toward the end of April.
Sentiment amongst consumers at the national level stabilized from January to April 2024, following a 17.7-point improvement from November 2023 to January 2024. Joanne Hsu, director of the University of Michigan Survey of Consumers, noted in the latest report that “different parts of the population exhibited offsetting changes this month. Republicans posted notable declines in sentiment this month, whereas Democrats and Independents did not. Sentiment for younger consumers rose, in contrast to middle-aged and older adults whose sentiment changed little or fell. Overall, consumers continue to express uncertainty about the future trajectory of the economy pending the outcomes of the upcoming election, but at this time there is no evidence that global geopolitical factors are on the forefront of consumers' minds.”
Locally, sentiment amongst Lee County business owners changed little during the second quarter of 2024. The Executive Business Climate Index (EBCI) for Lee County inched up nine-tenths of a point from the first quarter to 55.3. Expectations over the next 12 months on local economic and industry conditions improved but were partially offset by a decline in current economic conditions. Despite the improvements, the EBCI remains beneath pre-Covid levels, when the index measured at 62.5 during the first quarter of 2020.[1]
The latest quarter also asked respondents questions relating to disaster plans and hurricane preparedness. Results from the latest survey were compared to results from the 2022 Q3 survey, when the same questions were asked before Hurricane Ian. A larger share of businesses indicated they had a formal disaster plan in place compared to before Hurricane Ian (77.1 percent in 2024 Q2 versus 59.4 percent in 2022 Q3). Electricity and phone/internet were identified as the two services that would most significantly impact the normal day-to-day operations of a business. Lastly, in preparing for a hurricane, 36.6 percent of respondents stated they would use their bank or financial institution as a resource, while 25.4 percent said they would use the economic development organization as a resource.
Downloads:
Lee County Executive Business Climate Survey Second 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 sponsor, the Horizon Council, for helping make the survey happen.
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