Lee EBCS: Fourth Quarter 2022 Report
In our last report, we noted there was a blurred picture when it came to the national economy. This national scenario remains true for the latest report as well, as businesses and workers continue to navigate a period of economic uncertainty. In an effort to stabilize inflation, the Federal Reserve increased the federal funds rate by 0.75 basis points in November 2022, representing the highest level since January 2008. There is still some debate among economists as to whether this will produce a recession. While the housing market has been cooling down, consumers continue to maintain their expenditure level.
Lee County had to contend with similar issues to the national trend, but also had to face an unfortunate reality when it comes to living in Florida. Hurricane Ian ravaged Lee County and much of Southwest Florida in late September 2022, leaving a path of destruction in its wake. Many parts of Lee County were without utilities such as water and electricity for multiple weeks. The hurricane had a profound effect on the Lee County economy and the latest economic indicators available back these findings. The seasonally-adjusted unemployment rate for Lee County was 4.3 percent in October 2022, rising 1.7 percentage points from the prior month.
The fourth quarter 2022 EBCS results found that surveyed executives view Lee County economy as worse off today compared to 12 months ago, a belief held by 60 percent of respondents. A similar trend was observed when asking just about industry conditions, with 58 percent of surveyed executives stating that conditions were better 12 months ago compared to now. The Executive Business Climate Index (EBCI), a value that measures and gauges the current business climate in Lee County, continued to decline in the latest quarter, down to 49.9. This was fueled mainly by the Current Economic Conditions component of the index, which slipped from 50.9 to 38.3. The EBCI measure represented the third worst reading since this survey began in 2012, with only the Covid-19 impacted quarters of 2020 Q2 and 2020 Q3 measuring worse.
But not all was doom and gloom for the county in the latest report. The other two indices that comprise the EBCI (Future Economic Conditions and Future Industry Conditions) were up from the previous quarter, suggesting that while conditions might be tough now for Lee County, sentiment amongst business owners suggests that they expect better times over the next 12 months. Furthermore, despite rising interest rates and the Hurricane Ian aftermath, planned investment trends continued to show strong numbers.
We also asked questions relating to Hurricane Ian this quarter. The results found while most businesses reported a disruption in their operations due to Hurricane Ian, most of the firms reported the disruption lasting up to two weeks. As of the survey completion date, 90 percent of the businesses that closed at some point due to Hurricane Ian had reopened their doors to consumers. The major issues experienced were lack of electricity and internet services. Close to half of the firms experienced problems with other resources such as capital, labor, fuel and transportation.
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.