Farming and the lumbering and naval stores industries, all concentrated in northern Florida, were early mainstays of the economy. In the late 19th century, the extension of the railroads down the peninsula opened up an area previously populated only by Indians; given the favorable climate, central and southern Florida soon became major agricultural areas. Tourism, aggressively promoted by the early railroad builders, became a major industry after World War I and remains so today.

Tourists and winter residents with second homes in Florida contribute billions of dollars annually to the state economy and make retailing and construction particularly important economic sectors. However, this dependence on discretionary spending by visitors and part-time dwellers also makes the economy—and especially the housing industry—highly vulnerable to recession.

The arms build-up during the Reagan administration helped to expand Florida's aerospace and electronics industries. Even in 1991, after the reduction of the national military budget, Florida ranked seventh nationally in the value of Department of Defense contracts awarded. Florida ranked fourth in the nation in defense electronics manufacturing employment in 1999.

The state's economy—particularly that of the Miami area—has also benefited from an influx of Latin American investment funds. Miami is said to have one of the largest underground economies in the US, a reference both to the sizable inflow of cash from illicit drug trafficking and to the large numbers of Latin American immigrants working for low, unreported cash wages. Florida's population increased by 16% between 1990 and 1999, due primarily to migration. Strong annual economic growth rates in the late 1990s (averaging 6.6% 1998 to 2000) were only moderated to 4.2% in the national recession of 2001. Growth continued damped in 2002, reflecting, particularly, a slowdown in Florida's tourist industry, but remained above the national average. By July 2002, the state was experiencing positive, if small (less than 1%), job growth. As was true in much of the country, the share of manufacturing in Florida's economy decreased in both absolute and relative terms coming into the 21st century. From a peak of $31 billion in 1999, output from the manufacturing sector declined 6.3% by 2001. As a share of the Florida economy, manufacturing declined from 7.7% in 1997 to 5.9% in 2001. By contrast, the financial services and trade sectors (wholesale and retail) each grew by more than 27% 1997 to 2001, and general services (including hotels and tourist services) grew 36.9% during this period.

Florida's gross state product in 2001 totaled $491.5 billion (fourth largest in the nation), of which the public sector contributed 12.2%). The major contributors to the state's gross output in 2001 were general services ($125.9 billion); financial services ($108.5 billion); trade ($$83.4 billion); transportation and public utilities ($39.4 billion), manufacturing ($29 billion) and construction ($27 billion).