Miami economy building steam for strong second half
Greater Miami's economy at midyear is building steam for continued growth after substantial gains in most areas, economists and business leaders agree.
The number of persons at work in the area is greater than ever with the exception of a peak of a few months that the September 2001 terrorist raids clipped off, and strength is not limited to just a few industries.
"The trend looks good," said John Cordrey, chief economist of the Beacon Council, Miami-Dade County's economic development arm. "I'm optimistic that the second half of this year will continue in strong mode."
"We're finally seeing job growth in the 21/2 years where we haven't been until right after 9/11, and it's beginning to be broad-based," Mr. Cordrey said. "Our two major industries, the visitor industry and international trade, seem to be back."
Indeed, the visitor industry leads the community in job growth, up 2.7% in employed workers in the year ending in May, the most recent figures available from the US Department of Labor's Bureau of Labor Statistics.
"The industry is very strong," said Bill Talbert, president and CEO of the Greater Miami Convention & Visitors Bureau. "All the signs are terrific. The tourist tax is at or above pre-9/11 numbers. That's the key measure that tourism is back from the devastation of 9/11."
As new luxury hotels have opened, Mr. Talbert said, jobs have been added - and those increases spread across the industry, including transportation and attractions.
That growth is seen in two key figures of the industry - occupancy percentage and the average daily room rate charged in hotels. Both are substantially ahead, said David Whitaker, Greater Miami Convention & Visitors Bureau senior vice president for marketing and tourism.
In the first three months of the year, the strong point for the industry here, room occupancy was 76.6%, up 5.5% from a year earlier, and the average daily rate was $140.04, up 7.4%. Both figures far exceeded the national averages of 56.8% and $86.89.
But even in muggy June, according to Smith Travel Research, hotels were doing far better in Miami-Dade than elsewhere. At 61.5%, occupancy was up 9.1% from a year earlier, while the $92.86 average daily rate was up 10.4%.
And even though there are far more hotel rooms to fill, Mr. Whitaker said, "we're still growing at a pretty healthy rate with the addition of properties."
The growth of international trade employment is harder to track - those jobs don't fall into a neat compartment like tourism. The jobs categorized for trade, transportation and utilities for the community have actually declined 0.3% in the year ended May 31.
The biggest categories of job growth after leisure and hospitality for the 12-month period, however, were professional and business services, with 2.3% more jobs, financial activities with 2.2% more, and other services, up 2.1%. All three categories are bound to some degree to international trade.
The biggest falloffs came in information and manufacturing areas, each of which lost 2.1% of its jobs within the 12 months.
Overall, the county had 1,119,045 persons at work in May, up nearly 9,000 from April and more than 18,000 jobs ahead of the same month last year, according to the Bureau of Labor Statistics.
Bright as the county's total 1% increase in jobs in 12 months appears, however, it would look rosier if the government were to revise how it looks at employment, said J. Antonio Villamil, a former US undersecretary of commerce who heads the Washington Economics Group in Coral Gables.
"The bottom line is if you look at employment, in terms of measurement a lot of times the growth areas in our county are small businesses and entrepreneurial types," Mr. Villamil said. But the payroll employment numbers of the Bureau of Labor Statistics capture larger companies, he said, not the entrepreneurs and the self-employed.
While the US agency's methods are fine in mature economies, Mr. Villamil said, they don't work in entrepreneurial environments "like Miami or Hong Kong," where dynamic startups and the self-employed are important segments of the economy's growth.
Adding to Mr. Cordrey's list of strengths, Mr. Villamil cited construction and real estate as a third leg of Miami-Dade's growth, as foreign capital continues to flow into the marketplace, even with the start of moderate interest rate increases.
Those increases are not likely to begin melting the residential real estate snowball this year, several developers agreed, and probably won't do much melting next year either, barring a rapid rate increase that could contribute to a meltdown.
But Mr. Cordrey was less sanguine.
"One of our strengths was the strong construction," he said, "and it continues to help fuel the economy. But now we have clearly turned the corner with respect to where interest rates are going," and that may price some out of the housing market.
Of added concern in that area, Mr. Cordrey said, is the continued rise in the price of concrete. That, coupled with rising steel and plywood prices, will raise the cost of condo projects that have yet to come out of the ground, one developer said, and could ultimately cool the torrid industry.
Other perils also loom for the economy, experts say, though they're unlikely to become apparent the rest of this year as the community's economic engines keep steaming ahead.
Mr. Villamil points to educational gaps in the labor force, saying that funding for education at every level here is a ticking time bomb that could blow a hole in the economy in years ahead.
Another concern is transportation bottlenecks, punctuated as he spoke by a trucking slowdown at the Port of Miami. "The travel for the port is essential to us," he said.
And that, in turn, affects international trade. Despite job growth in that area, Mr. Villamil said, "we are slowly losing our market share in international trade to other ports because of the cost of moving goods."
Transportation and education shortfalls "are the termites in the basement," he said. "You don't see it until the foundations crumble in the house."
On the plus side, Mr. Cordrey noted that the Beacon Council is continuing to look at the potential of biotech and bioscience industries because of the growth in that sector. And, like Mr. Villamil, he sees continued growth in international investment in the Miami area.
He also noted a surprising phenomenon: While in the mid-1970s rising prices of oil and by extension gasoline choked the economy, that doesn't seem to be happening today. The price of gas goes up, he said, but the economy steams ahead.