Naples suffers biggest drop in personal income in the USA.
Of course, statistics are a strange beast.
Hardest hit: Naples leads nation with biggest drop in personal income
By LAURA LAYDEN
Wallets got slimmer in Naples in 2009.
Last year, personal income shrank by more than 7.1 percent in Naples-Marco Island. That put it at No. 1 in the country for the biggest drop among metro areas.
Income from all sources declined to about $18.3 billion, down from more than $19.7 billion in 2008, according to estimates released Monday by the U.S. Bureau of Economic Analysis.
“It just reflects how much of an impact the recession has had on our area,” said Gary Jackson, an economist and professor at Florida Gulf Coast University in Estero.
“Collier was certainly not immune,” he said. “It’s actually global. This was a global recession.”
Personal income includes wages, unemployment and Social Security checks, as well as earnings from stock and other investments.
Most of the income drop in Naples-Marco Island came from a decline in earnings from dividends, interest and rent. Income from those sources shrank to less than $10.1 billion, down from more than $11.2 billion in 2008. The difference is more than $1.1 billion.
“Those are huge numbers,” said Robert Matheson, president of Matheson Financial Services in Estero.
“The stock market in 2009 was actually up,” he noted. “Our clients were up about 17 percent after fees. So that big drop isn’t from our clients.”
The big drop might have come from private investments, particularly in banks, Matheson said.
With so many banks in Naples failing during the past two years, investors — many of them local — have lost millions. The stock is now worthless and employees have seen their retirement savings wiped out.
The worst may not be over, Matheson said.
“The scary part is we are seeing a set up for another double digit drop in the stock market, occurring in the next couple of months,” he said. “At this point, we are still invested in with our clients, but we will shortly be moving into inverse funds, which rise when the market goes down.”
Net earnings — primarily from wages and benefits — dropped to less than $6.1 billion in Naples-Marco Island in 2009, down by about $500 million from 2008. That reflects layoffs and cutbacks in hours and benefits.
“A lot of people who are employed are actually working part-time,” Jackson said.
That means more workers don’t have health or retirement benefits, which would increase their annual personal income.
In Naples-Marco Island, income from personal transfer receipts, which include unemployment, Social Security checks, Medicare and Medicaid payments, rose last year, reflecting a tighter job market. It increased to nearly $2.2 billion, up from less than $2 billion in 2008.
Some of Matheson’s older clients have been forced to tap into Social Security early because they can’t find jobs. He fears there will be more job losses in Southwest Florida.
More than 52,000 workers in Lee and Collier counties were jobless in June, as unemployment rates in both counties grew. Unemployment was at 13 percent in Lee and 12.3 percent in Collier, according to the Florida Agency for Workforce Innovation.
In Cape Coral-Fort Myers, personal income dropped from nearly $24.1 billion in 2008 to less than $23 billion in 2009. It was down by more than 4.5 percent.
Net earnings for the metro were about $10.2 billion last year, down from about $10.9 billion in 2008, a loss of $700 million.
Earnings from dividends, interest and rent were about $8.3 billion last year, down from $9.1 billion in 2008. Transfer receipts grew by about $400 million to more than $4.4 billion.
A declining population in Lee County was a factor in its drop in personal income because workers leaving the area took their wages with them, said David Lenze, a senior economist for the Bureau of Economic Analysis.
On the flip side, the Naples area saw a slight increase in its population last year, the most recent U.S. Census showed.
The construction industry — one of the hardest hit in Southwest Florida — continued to suffer in 2009.
In Naples-Marco Island earnings in construction declined nearly 31 percent to about $643 million in 2009, down from more than $930 million a year earlier. In Cape Coral-Fort Myers, earnings shrank more than 28 percent to less than $1.1 billion.
Lee County was hit harder at the beginning of the recession, while it took longer for Collier County to feel the effects, which may be one reason why personal income dropped more in the Naples area last year, Jackson said.
“You have to be careful looking at one point in time,” he said.
Farm earnings in Southwest Florida also took a hit in 2009.
Earnings declined in most industries in Naples and Fort Myers last year, including manufacturing and the wholesale and retail trades. The health care industry was one of the few to see increases in earnings.
In 2009, personal income shrank in 223 metros, increased in 134 metros and remained the same in nine metros.
On average, personal income in metros declined 1.8 percent in 2009, after rising 2.7 percent in 2008.
“Many people lost their jobs in 2009,” Lenze said. “More jobs were cut in the private sector.”
In 2008, personal income fell in five metro areas. In Cape Coral-Fort Myers, it grew less than 1 percent and in Naples-Marco Island it increased 2.2 percent.
Last year, Jacksonville, N.C. saw the most income growth — at 14 percent.
Net earnings increased in 57 metros in 2009. Most of that growth came from the government sector.
Military earnings growth was particularly strong in Jacksonville and Fayetteville, N.C., Manhattan, Kan., Elizabethtown, Ken., Lawton, Okla., Clarksville, Tenn., and Killeen, Texas.