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Orlando Insight is a publication of the Orlando Economic Forum, an initiative of the Orlando Economic Partnership. Comprised of local industry leaders, the Forum meets quarterly to discuss both current economic conditions and issues of regional significance in Central Florida. Orlando Insight reflects those discussions and draws from the most recent data available at time of preparation.

A Changing LandscapeAs one of the nation’s fastest growing labor markets, adding more than 3,500 new jobs per month, Orlando is positioned to continue its trajectory as one of the nation’s top locations for job growth. Opportunities abound in industries ranging from business services to construction and from healthcare to manufacturing. However, the region’s ability to effectively capture opportunities, and fulfill the market’s potential, will depend on its ability to prepare its workforce to meet the demands of the future and adapt to the ever-changing labor market landscape.

Automation, artificial intelligence and the rise of the gig economy will continue to disrupt the traditional workforce, making some jobs obsolete while creating new opportunities for many workers. These technical and societal shifts emphasize the need to focus on STEM education and the proactive upskilling of the existing workforce.

Working Together

To get ahead of this demand, local schools are already teaching STEM skills as young as kindergarten, and organizations like CareerSource Central Florida (CSCF) and the new Orlando Economic Partnership are prioritizing cultivation of the talent pipeline.

Experts at CSCF are critical as they match the talent supply with the current, unfilled demand. Raising awareness is part of the equation as the agency markets underutilized training opportunities in growing and high-need fields. For career seekers, CSCF training and career coaching programs help displaced workers find a new fit in the workforce. For businesses, CSCF offers recruitment assistance and customized training.

On any given day, there are more than 30,000 job postings in Orlando. Meeting with more than 89,000 career candidates and 5,500 businesses annually, CSCF is in tune with the pulse of today’s labor market.

–– Tim Giuliani President & CEO

Orlando Economic Partnership

“The quality and quantity of the workforce is paramount in company location decisions. Our goal at the Orlando

Economic Partnership is to lead the effort to diversify our economy and work alongside our partners to prepare the labor force for the industries that are sure to grow

in our region. Companies will be attracted by our ready workforce and talent pipeline.”


Today’s Labor Market

Orlando’s preeminent leisure and hospitality industry welcomed an astonishing 68 million visitors last year verifying, once again, that the region is among the top tourism destinations in the world. Not surprisingly, the industry added 12,000 new jobs over the last year and with Walt Disney World Resort’s upcoming World of Avatar and Universal Orlando Resort’s Volcano Bay water park and hotel set to open in May 2017, leisure and hospitality employment demand is expected to continue.

What some may find surprising is the growth seen in the business and professional services industry that added the second largest share of new jobs over the last year with 7,100 new jobs. The business and professional services industry encompasses legal, accounting, computer systems design and administrative services. Recent large corporate relocations and expansions like Deloitte’s U.S. Technology Delivery Center, which is adding nearly 2,000 jobs in two years, are contributing to job demand especially for more technical talent.

Growing 8.8 percent over the last year, the demand for construction industry employment is far exceeding every other industry. This rapid growth is demonstrated across the region by the more than $9 billion in infrastructure construction. Notable projects include the Interstate 4 expansion, Orlando International Airport and Orlando Sanford International Airport expansions, SunRail phase 2 and numerous others.

Demand in the construction industry emphasizes the need to focus on cultivating a supply of skilled-trade workers. Educating young people on the opportunities within construction and manufacturing is vital to sustaining the talent supply in these fields. At the same time and in an effort to provide a more immediate supply, CareerSource Central Florida and Seminole State College have partnered to provide free 8-week training programs to specifically address the demand for skilled workers in construction and manufacturing.

Tomorrow’s Labor Market

The recent opening of BRIDG, the world’s first industry-led smart sensor consortium, is an important reminder of the changes to come. BRIDG is part of the larger 500 acre NeoCity research park in Osceola County, which over the coming years, will attract thousands of new high tech jobs focusing on the advanced manufacturing of emerging technologies.

While we don’t yet know what the jobs of tomorrow will be, current job postings indicate the rising demand for STEM related occupations. Of the more than 30,000 jobs postings in March more than 9,000 were for STEM jobs.

Software Developers, Computer User Support Specialists, Web Developers and Network and Computer Systems Administrators are among the top 15 advertised positions with 1,908 postings in March 2017. The demand for these occupations and even more technical occupations will only increase as the aforementioned technologies become more prevalent.

Power of Partnership

While the long-term effect of automation and artificial intelligence on jobs may be unknown, it’s an important reminder of the impending change. Preparing for the future while addressing current workforce needs requires extensive partnership and nimbleness. Luckily these virtues were the building blocks of Orlando’s present day success and will continue to guide the region toward a more prosperous future.

Second Quarter 2017 | 2 ORLANDO INSIGHT

“As the region continues to expand into more diversified and tech-heavy industries, it will be necessary to train a workforce

ready to meet these demands. Fortunately, Central Florida is well equipped with robust education, training, and incubation

systems in place and under development.”

–– Pamela Nabors President & CEO

CareerSource Central Florida

Orlando Job Openings March 2017

Source: The Conference Board, Help Wanted Online

24,723

9,679

Other

STEM

City of Orlando: Arrow Sky Media, a digital technology firm, is relocating its international

headquarters from Nashville to Orlando. Arrow Sky will become an anchor tenant in Creative Village,

a 68-acre mixed use site. Creative Village will be home to more than 7,000 students when the

University of Central Florida and Valencia College downtown campus opens Fall 2019.

Seminole County: Veritas Technologies, an international data management company with a large existing presence in

Lake Mary, announced plans to create 150 new jobs. Deloitte’s U.S. Technology Delivery Center, also in Seminole County, is

continuing to hire indicating, the high quality and large quantity of technical talent in the region.

Osceola County: The Florida Advanced Manufacturing Research Center, home to BRIDG, was completed on schedule – 24 months after design began – and is ready to host new manufacturing technologies as the anchor of a 500-acre, master-planned site owned by Osceola County called NeoCity.

Around the Region

ORLANDO INSIGHT Second Quarter 2017 | 3

Orange County: Bed Bath & Beyond announced it will establish a call center and create 500 new jobs over the next 3 years in west Orange County. Bed Bath & Beyond is the second company in recent months to absorb and repurpose vacant retail space in the West Oaks Mall. Xerox Corp. revamped 70,000 sq. ft. and plans to create 500 new jobs.

Lake County: Construction continues on the Wekiva Parkway spur to be completed in 2018. The extension will improve connectivity between east Lake County and the rest of the region. The spur intersects with Hwy. 46 where site work has already begun at the 1,300-acre Wolf Branch Innovation District to prepare for future light industrial and commercial development.

Labor Market

Labor Force1,290,972

Unemployment Rate3.9%

Initial UI Claims2,776

New Job Postings34,397

Arrows indicate change from previous year. Data for March 2017 unless otherwise specified.

• Construction employment grew 8.8 percent year over year and manufacturing employment grew 6.2 percent. The vitality of these industries is contingent upon new talent to take the positions of retiring baby boomers.


Source: U.S. Department of Labor, Bureau of Labor Statistics

• The online job ads reflect the transition occurring in the labor market. Hospitality- and retail-related occupations continue to be in high demand, but there is increasing demand for more technical occupations like software developers, network and computer systems administrators and web developers. The high demand for registered nurses is reflective of the statewide nursing shortage that Valencia College and others are working to address.

Total PayrollEmployment1,239,800

• Orlando employers added 1,900 jobs in March, bringing private year-over-year employment gains to 42,700. The leisure and hospitality industry added the largest net gain over the year with 12,000 new jobs.

• Total payroll employment between March 2016 and March 2017 expanded by 3.6 percent, one of the fastest rates among metros with more than 1 million jobs.

Source: The Conference Board, Help Wanted Online, prepared by the Florida Department of Economic Opportunity, Bureau of Labor Market Statistics

Change in Payroll Employment, Orlando MSA Y/Y % Change, Not Seasonally Adjusted

Top 15 Online Job Ads, CareerSource Central Florida March 2017

Source: U.S. Department of Labor, Bureau of Labor Statistics

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

ConstructionManufacturing

Level Percent Level PercentTOTAL PAYROLL EMPLOYMENT 1,239,800 1,237,900 1,197,000 1,900 0.2% 42,800 3.6%PRIVATE 1,115,000 1,113,400 1,072,300 1,600 0.1% 42,700 4.0%

Construction 71,400 71,300 65,600 100 0.1% 5,800 8.8%Manufacturing 44,400 43,700 41,800 700 1.6% 2,600 6.2%Wholesale Trade 47,000 46,300 43,800 700 1.5% 3,200 7.3%Retail Trade 147,900 148,500 143,300 -600 -0.4% 4,600 3.2%Transportation, Warehousing, and Utilities 37,500 37,100 37,100 400 1.1% 400 1.1%Information 23,300 23,400 23,900 -100 -0.4% -600 -2.5%Financial Activities 76,700 76,300 73,300 400 0.5% 3,400 4.6%Professional and Business Services 210,000 209,700 202,900 300 0.1% 7,100 3.5%Education and Health Services 150,000 150,700 147,100 -700 -0.5% 2,900 2.0%Leisure and Hospitality 260,900 260,900 248,900 0 0.0% 12,000 4.8%Other Services 45,600 45,200 44,300 400 0.9% 1,300 2.9%

GOVERNMENT 124,800 124,500 124,700 300 0.2% 100 0.1%

EmploymentIndustry Mar-17 Mar-16Feb-17 Feb 2017 to Mar 2017 Mar 2016 to Mar 2017

Change from

Company AdsRegistered Nurses 1,548

First-Line Supervisors of Retail Sales Workers 882

Retail Salespersons 766

First-line Supervisors of Office and Administrative Support Workers 737

Heavy and Tractor-Trailer Truck Drivers 734

Customer Service Representatives 723

First-Line Supervisors of Food Preparation and Serving Workers 691

Maintenance and Repair Workers, General 565Software Developers, Applications 539Computer User Support Specialists 526Maids and Housekeeping Cleaners 482Network and Computer Systems Administrators 422Web Developers 421Sales Representatives, Technical and Scientific Products 408Cooks, Restaurant 397

Commercial Real Estate

• Office rates continue to increase but have not reached prerecession levels. With rent rising and vacancy decreasing, especially for Class A space with only 7 percent vacancy, pressure is mounting for speculative office development.



Source: CoStar

• Multi-family permitting is hovering near prerecession levels at approximately 8,000 units annually. Single family activity continues to track at just half the levels recorded in the mid-2000s but increased significantly over the last two years as developers try to catch up with pent up single family housing demand.

• Large activity in first quarter 2017 was concentrated in south Orlando. Some of the largest leases occurred near the Florida Turnpike and Orlando International Airport. GEODIS Logistics signed a lease for 141,000 sq. ft. and Amazon signed a lease for 96,000 sq. ft.

Source: U.S. Census Bureau

• Interest rates fell near recession lows to 3.46 percent in October 2016, but have been climbing steadily since. Despite the rise of interest rates, the median home price and number of sales are increasing.

Office Gross Rent vs. Office Vacancy Rate, Orlando MSA Large Industrial Lease Transactions, Q1 2017

Housing Permits, Orlando MSAUnits Authorized, Through March 2017

Source: Orlando Regional Realtor Association

Median Sales Price vs. Interest Rate, Orlando MSAThrough March 2017

Source: CBRE and Cushman & Wakefield

Office Vacancy10.4%(Q1 2017)

Office Asking Rate$20.97(Q1 2017)

Industrial Vacancy6.4%(Q1 2017)

Industrial Asking Rate$6.09(Q1 2017)

Existing Home Sales3,437

Median Home Price$217,000

Residential Real Estate

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2000 2002 2004 2006 2008 2010 2012 2014 2016

Office Gross Rent Vacancy Rate

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Median Sales Price (left axis, 3-MMA) Interest Rate (right axis, 3-MMA)

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10,000

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Single-Family Units Multi-Family Units



Consumer Spending

Source: Florida Department of Revenue

• The region’s index of retail activity is continually increasing, reaching 191.7 in January 2017 out-pacing the statewide index of 171.3. Business investment was the fastest growing segment of retail activity increasing 25.2 percent since January 2016.

Index of Retail Activity, Orlando MSAThrough January 2017

Orlando InternationalPassengers4,073,242

Orlando Sanford InternationalPassengers274,116

Hotel Occupancy87.5%

Average Daily Rate$139.19

Taxable Sales$5.1 billion(January 2017)

Index of Retail Activity191.7(January 2017)

Transportation

Source: Sanford Aviation Authority

• For the fourth consecutive year, total passengers through Orlando Sanford International Airport posted its highest annual total on record at 2.75 million. Passenger traffic is increasingly shifting towards domestic travel.

Total Passengers, Orlando Sanford International Airport

• International traffic at the Orlando International Airport increased 4.9 percent year-over-year. Year to date international passengers have contributed to 12 percent of total traffic. With five new international destinations scheduled to commence in 2017, international traffic is expected to continue to grow.

New International Destinations Starting in 2017Orlando International Airport

Source: Orlando International Airport

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Dec 1999 = 100

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Domestic InternationalDestination Airline Weekly Flights

Dusseldorf, Germany airberlin 5

Birmingham, England Thomas Cook 1

Cologne, Germany Eurowings 2

Paris/Charles de Gaulle, France Norwegian 1

Rio de Janeiro, Brazil TAM 3

Port Au Prince, Haiti Sunrise Airways 3


Payroll Employment

Unemployment

Initial Claims

Office Vacancy

Industrial VacancyHome Sales

Median Home Sales Price

Hotel Occupancy

Airport Passengers

1st Quarter 2017 1st Quarter 2016 10-Year Low 10-Year High


Orlando Spider Chart

Commentary: The first quarter of 2017 was increasingly positive for the Orlando economy. All nine indicators improved between the first quarter of 2016 and the first quarter of 2017, with airport passengers gaining the most year-over-year.

Six of the nine indicators – total payroll employment, new claims for unemployment benefits, office vacancy, industrial vacancy, home sales, and airport passengers – sit at their highest same-quarter levels in a decade.

Hotel occupancy and total unemployment are very close to hitting 10-year highs and will likely do so by the end of 2017. The median home sale price lags slightly further behind due to the inflated home prices of 2008 that remain in the reference period. By early 2018 it is likely all nine indicators will be at their highest levels in ten years.

The Orlando Spider Chart is designed to allow monitoring of the Orlando economy by comparing current conditions to those over a rolling 10-year period. For each indicator shown, the center of the chart represents its worst same-quarter level over the last 10 years and the outside line represents its best. An indicator’s proximity to the outside measures its current health relative to 10-year lows and highs.

There are four indicators that move inversely to economic health (unemployment, initial unemployment insurance claims, office vacancy rate, and industrial vacancy rate). For all four, the indicator is inverted so that a decline is represented by outward movements on the chart.


ABOUT THE ORLANDO ECONOMIC PARTNERSHIP

The Orlando Economic Partnership is a not-for-profit, public/private partnership encompassing seven counties – Brevard, Lake, Orange, Osceola, Polk, Seminole and Volusia – as well as the City of Orlando. Top priorities include creating high-wage, high-value jobs; expanding Central Florida’s global reach and competitiveness; supporting and enhancing educational/skills preparedness in the talent pipeline; strengthening advocacy for improved infrastructure and community resources; and creating an enviable quality of life that is broad-based and sustainable.

Orlando Economic Forum

Marva JohnsonCharter Communications

Chester KennedyBRIDG

Bill MartinGreater Osceola Partnership for Economic Prosperity Chair, Regional Economic Development (RED) Team

Bill MossCBRE Chair, Business Development Committee

Pamela NaborsCareerSource Central Florida

Bob ProvitolaMitsubishi Hitachi Power Systems Americas, Inc.Chair, Manufacturers Association of Central Florida

Jerry RossNational Entrepreneur Center

Crystal SircyOrlando Economic Partnership

Rasesh ThakkarTavistock Group

Robert Utsey Skanska USA Building Inc. Co-Chair, Orlando Economic Partnership

Rick WasselIQ Orlando

Vickie WhiteFlorida Hospital

CHAIRSean Snaith, Ph.D.University of Central Florida

MEMBERSThomas Baptiste, Lt. Gen. USAF (Ret.)National Center for Simulation

Cecelia BonifayAkerman, LLPSecretary/Treasurer, Orlando Economic Partnership

Phillip BrownGreater Orlando Aviation Authority

Kevin DarrenhampLockheed Martin (MFC)

Arnold EvansSunTrust Bank, Central Florida Division

Orlando EvoraGreenberg Traurig, LLP

Scott FarisLuminar Technologies, Inc.

Melanie ForbrickSiemens

Tim GiulianiOrlando Economic Partnership

Larry HenrichsVisit Orlando

Daryl Holt Electronic Arts (EA Studios)

Steven JamiesonThe Mall at Millenia

Tony JenkinsFlorida Blue

Elizabeth [email protected]

For more information, contact:

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