Florida’s rising unemployment shines a light on the US state’s need to attract more foreign direct investment (FDI), a significant contributor to job creation.
In the wake of the Covid-19 crisis, Florida’s unemployment rate rose to 11.3% in July 2020, up 1% from June 2020 and 8.2% on the previous year, according to the US Department of Labor. This compares with a national unemployment rate of 10.2% for July 2020 and represents the second-highest number of new unemployment claims in the country, for the week ending 15 August 2020.
Data from the US Bureau for Economic Analysis shows that Florida’s job creation from inward investment is the fourth-largest in the US at 368,100 jobs in 2017. The number of employees at majority-owned foreign entities in Florida grew by 135,200 (58.1%) from 2010–2017. European companies accounted for the largest share at 58% of all FDI employment in Florida.
Florida’s Chamber of Commerce estimates that one in five of the state’s jobs depend on inward investment. However, according to fDi Intelligence’s 2020 fDi Report, Florida had 84 greenfield FDI projects in 2019, which represented a 5% decline on the previous year’s total. At the same time, the report found that FDI projects across North America increased by 14% in 2019.
Room to grow in FDI
State-level data collection for FDI by the US Department of Commerce has been irregular, particularly between 2008 and 2013. According to recently revised data, Florida received $5.7bn in FDI in 2015, an increase of more than 45% from 2014, representing just 1.36% of the US total. In 2016, Florida received $10.5bn in FDI, representing 2.8% of total US FDI. While FDI into Florida improved in 2016, the state still tends to punch below its weight in terms of national FDI share given the size of its economy.
Going forward, the University of Central Florida’s Institute for Economic Forecasting predicts state-wide unemployment rates of 8.2% for 2020, 5.5% for 2021, and 3.6% for 2022. The institute also predicts Florida’s economy will contract by 6% in 2020 but will bounce back with growth of 7.6% in 2021.