BUSINESS ACTIVITY | LABOR MARKET | iNDUSTRY eMPLOYMENT
REAL ESTATE | tOURISM AND TRANSPORTATION | OUTLOOK

BUSINESS ACTIVITY

Business confidence reaches two-year low.

• The latest results from the Partnership’s Orlando MSA Business Conditions Survey suggest Orlando businesses became less confident in Q2 2026. The share of area businesses expressing confidence in the U.S. economy (35%) and in their own prospects (72%) both fell to two-year lows at midyear.
• The decline in confidence appears related to broader concerns around conflict in Iran and subsequent inflationary pressures. Cost pressures became the most frequently cited challenge facing area businesses in Q2; Florida consumer sentiment also fell seven percentage points year-over-year to 71.1 in June, amid ongoing volatility.
• Total sales in the Orlando region reached $58.3 billion in Q1 2026, down 0.5% from a year earlier. The decline suggests economic activity remains fragile, with more businesses reporting weaker year-over-year revenue growth and profitability in Q2 2026 than a year earlier.

LABOR MARKET

Labor force growth outpaces job growth.

• The region’s labor force expanded by more than 17,000 people in the year ending June 2026. However, local employment grew by just 6,000 over the same period—inching unemployment up to 4.6% at midyear.
• The more challenging environment for jobseekers is consistent with the more cautious hiring in many sectors captured in our recent surveys, as well as the “no-hire, no-fire” environment being reported nationally, in which businesses are maintaining current staffing levels rather than aggressively hiring or reducing headcount. The increase in unemployment also reverses a post-pandemic trend in which employment growth outpaced labor force growth.
• At the same time, surging local demand for AI skills continues to suggest many businesses may be prioritizing productivity gains as a growth strategy over adding jobs.

INDUSTRY EMPLOYMENT

Orlando leads state in job growth.

• Orlando employers added 20,600 jobs in the year ending June 2026—half of Florida’s total job growth over the period and more than Miami, Tampa, and Jacksonville combined.
• Leisure and hospitality, education and health, and professional and business services have been the key drivers of job growth over the last year. A challenging real estate environment has seen the wider financial activities sector experience job losses, while softer consumer demand and layoffs associated with Spirit Airlines’ bankruptcy have also driven declines in retail and transportation, respectively.
• At 1.4%, the pace of annual employment growth in Orlando at midyear compares favorably with that of the nation (0.3%) and all but four of the 30 most populous regions in the U.S.—providing further evidence of Orlando’s underlying economic momentum in the first half of 2026.

REAL ESTATE

Office absorption turns positive.

• The Orlando office market recorded its strongest first-half performance in at least five years, with net absorption reaching 170,000 square feet. Vacancy subsequently fell from 17.1% in the final quarter of 2025 to 16.7% in Q2.
• Tenants continued to favor premium space and amenity-rich locations. Class A properties accounted for nearly two-thirds of leasing volume in the first half of 2026 (64.3%), while the Central Business District was the most active submarket, attracting 26.6% of all leasing activity.
• The industrial market also posted solid gains in the first half of 2026, recording net absorption of 629,000 square feet, more than double the amount from a year earlier. Vacancy was 8.4% at midyear, down from 9.0% a year ago.

TOURISM & TRANSPORTATION

Hotel demand nears pre-pandemic levels.

• Orlando-area hotels generated more than 18.0 million room nights of demand through June, a 1.1% increase from the same period in 2025 and just below pre-pandemic levels. The result suggests visitor demand remains healthy despite weaker consumer sentiment and broader economic uncertainty.
• Passenger traffic through Orlando International Airport has continued to grow in 2026. Through May, total passenger volume reached 25.2 million, a 3.1% increase from a year earlier, driven primarily by gains in domestic travel.
• SunRail ridership remained strong during the second quarter, with June passenger volume increasing 17.2% from a year earlier. The continued growth reflects increasing utilization of the region’s commuter rail system.

OUTLOOK

U.S. growth to prove resilient in 2026.

• U.S. economic growth in 2026 is now forecast to modestly exceed the 2.1% recorded in 2025, with higher business investment offsetting a projected slowdown in consumer spending.
• Growth in consumer spending is expected to fall to 1.9% in 2026 from 2.6% in 2025 amid softer income growth and a more constrained consumer environment.
• Conversely, business investment is expected to accelerate to 6.4% in 2026 from an already-elevated 4.1% in 2025 as companies continue to prioritize technology, automation, and AI-related expenditures to improve productivity in an uncertain economic environment.