Expert: Brexit Vote Casts Shadow Over Florida Business, Tourism

Jan 16, 2019

The business community in Florida is monitoring the Brexit turmoil across the pond.

 


This week, British lawmakers rejected a deal to leave the European Union. The United Kingdom is facing a March 29 deadline without a clear direction.

Jerry Parrish, chief economist and director of research for the Florida Chamber Foundation, spoke with WLRN’s Alexander Gonzalez about how the recent Brexit vote could play out in the Sunshine State.

WLRN: What are you hearing from the business community? 

PARRISH: Interestingly enough, we were at our economic outlook summit in Orlando. This is a yearly summit where I do my jobs forecast and we have the leaders from around the state talking about what the path of the economy is. And we talked about this with some of our business people down there. Everybody's wondering what's going to happen. There's a lot of uncertainty. Nobody knows if there'll be another Brexit vote. But certainly everybody's watching it because of our trade relationship and the number of visitors we get from the U.K. every year is substantial and it has a big effect on the Florida economy. 

Tell us about those trade relationships and you say the number is substantial. How many visitors from the U.K. are coming? 

That number was 1.7 million and it had been growing. We know visitors from other countries are typically the ones who spend the most and stay the longest. The tax yield we get from international visitors is high. The U.K. is No. 2 only to the Canadians as far as the amount of people that come to Florida every year. Certainly, let's say the British pound because of Brexit drops in value. That'll make coming to the U.S. more expensive for the people in the U.K.

It will also affect our trade relationship. We do more than $3 billion worth of trade with the U.K. and that's about $1.47 billion in exports and $1.59 billion in imports from the U.K. So a weaker British pound would make Florida-origin exports more expensive for them, and it might reduce that volume of those exports that we love to send over there. 

Why should Floridians even be paying attention to what's happening in the U.K.? 

The uncertainty that's been caused is certainly a concern for all businesses because they want to be able to have a stable playing field out there to play on. Without knowing what's going to happen in the U.K., it's hard for businesses to to make their plans – not just the ones in the U.K., those businesses in Florida.

And the U.K. is the highest foreign employer of Floridians with more than 70,000 Floridians that are employed by U.K. companies. That's the top number of any country. It's substantially bigger than Canada, France, Germany, Japan and Switzerland. So ... uncertainty hurts everybody. It hurts people's planning. It stops people from investing, and we need those foreign direct investments. The investments of Floridians in other countries like the U.K., that's what keeps international business moving. 

Where could the U.K. be heading?

The probabilities of the hard Brexit went down because of the vote. What you saw was the British pound actually gaining in value and now it's much more likely that they'll even potentially have another Brexit vote where they go to the people and vote again. Although there's a lot of uncertainty over there, I believe the financial markets saw some relief.