Robert D. Cruz, PhD, Chief Economist

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1 Robert D. Cruz, PhD, Chief Economist Office of Economic Development and International Trade Miami-Dade County / Office of Economic Development and International Trade 1

2 Overview A quick look at the recent boom/bust cycle. How bad was it? How bad is it? Economic outlook: Distinguishing the short-term from the longer term. Recognizing the extent of local control over the local economy. Office of Economic Development International Trade 2

3 Miami-Dade Economic Output Miami-Dade Real GDP, Ann. % Growth 4.5% 4.8% 4.7% 3.5% 2.9% 1.4% 1.1% -1.6% -4.5% Data Sources: U.S. BEA, regional data & OEDIT The CAGR rate in GDP was 3.6% from Miami-Dade economy grew 24% in 6 years. GDP per capita increased 16% in 6 yrs. Lost 6% of GDP and 8% in GDP per capita during 2-yrs of recession. Office of Economic Development and International Trade 3

Industry Leaders of the Expansion 5% 6% 5% Main Contributors to 2002-07 Economic Growth 5% 6% 8% 12% Real est, rental, leasing Finance and insur.

4 Industry Leaders of the Expansion 5% 6% 5% Main Contributors to Economic Growth 5% 6% 8% 12% Real est, rental, leasing Finance and insur. Wholesale trade Transport, warehousing Information All Other Private 9% 27% 8% Construction 10% Prof, scientific, tech svs Retail trade Healthcare, social assist. Hotel, food, entertain, rec Real estate development and directly associated industries generated 45% of growth. Prof., scientific, tech had solid growth, 9% Wholesale trade and transport, 14% Tourism and Healthcare were involved, but not so much. Office of Economic Development and International Trade 4

5 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Climbing Out Slowly from GR 1,070 1,050 1,030 1, Miami-Dade Nonfarm Payroll Employment Thousands of Jobs, Seasonally Adjusted Data Source: Florida Agency for Workforce Innovation Total Non Farm (L) Private Sector (R) Since Jan 2010 MDC recovered 23,300 (25%) of the 92,400 payroll jobs lost from Jan 08 to Jan 10. Average monthly job gain since Jan 10 = 1,230 Need consistent gains of 3000/mo. on avg. to feel like a true recovery. Office of Economic Development and International Trade 5

Industry Job Creators 2007-2011 High Growth Low Share 30% High Growth High Share Leisure & Hospitality Education & Health 0% Finanical Activities Wholesale

6 Industry Job Creators High Growth Low Share 30% High Growth High Share Leisure & Hospitality Education & Health 0% Finanical Activities Wholesale Trade Retail Trade Government Prof. & Bus. Svs Construction Low Growth Low Share -70% Low Growth High Share Office of Economic Development and International Trade 6

7 Socio-Economic Impacts Since Start of Great Recession Miami-Dade per capita income in 2010 (ACS) stood at $20,970, down 14% from 2007 after inflation adjustment. Median household and median family income in 2010 were down 12% from 2007 levels (after inflation). Average household and family income in 2010 down 10% and 9%, respectively. Income gaps widening. 20.4% poverty rate (all persons) in 2010 versus 15.3% in 2007, number of persons living in poverty has risen by 146,000 since Office of Economic Development and International Trade 7

8 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Thousands Unemployment Estimates SA Unemployment Rate & Initial Unemployment Claims (in '000s) Initial Unemployment Claims, 4MMA Data Source: Bureau of Labor Statistics Unemployment Rate (Right Axis) 16% 14% 12% 10% 8% 6% 4% UR continued to rise even after payroll jobs stopped falling. Demographic shift to working age pop. contributed to UR. Wide variation in UR geographically, education levels and social groups. LT unemployment is also a large problem. Office of Economic Development and International Trade 8

Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Financial Distress Not Limited

9 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Financial Distress Not Limited to Lower Income Groups Consumer Bankruptcy Filings: Miami-Dade 2,000 1,750 1,500 1,250 1, Source: U.S. Bankruptcy Court, Southern District Consumer bankruptcies rose quickly during the recession and continue at high levels. Average monthly filings: 2007 = 390; 2010 = 1,475; 2011 = 1,384 (Jan-Aug) Office of Economic Development and International Trade 9

Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Financial Stress on Local Businesses 70 60 50

10 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Financial Stress on Local Businesses Business Bankruptcy Filings: Miami-Dade Business bankruptcies rose quickly during the recession and continue at high levels. Average monthly filings: 2007 = 25; 2010 = 49; 2011 = 38 (Jan-Aug) Source: U.S. Bankruptcy Court, Southern District Office of Economic Development and International Trade 10

11 Glass Half Full but with Significant Socioeconomic Challenges In the last few months several indicators suggest stabilization or continued (albeit slow) growth in addition to payroll employment, first time unemployment claims, bankruptcy filings. Other indicators: Residential foreclosures far down from their 2010 peak Existing residential home sales holding steady and prices trending higher, and residential bldg permits up. Monthly taxable sales trend is positive; gaining 72% of loss during recession. Tourism sector began recovery in early 2009 and continues to grow. International trade growing as well. Office of Economic Development and International Trade 11

12 What lies immediately ahead? World economic growth is decelerating: U.S., Euro zone, Asia, Japan, and Latin America (varying causes) Economic policy uncertainty in U.S. has hurt the momentum of the recovery. Major stimulus unlikely. Some hopeful signs that enough actions will be taken to avert a return to economic recession. (Euro debt crisis; some parts of President s proposal adopted.) But not enough to accelerate the recovery and employment growth before Local economy in good position to participate in accelerated recovery should national and int l economic policy impediments be resolved. Office of Economic Development and International Trade 12

13 Office of Economic Development and International Trade 13

14 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Housing Foreclosures Miami-Dade Foreclosure Filings and REO's 4,000 3,500 Total Filings REO - RealtyTrac 3,000 2,500 2,000 1,500 1, Data Sources: Miami-Dade Clerk of Courts, RealtyTrac. Both filings and REOs are down significantly from last year. Foreclosure process is taking much longer. 5,048 foreclosure filings YTD and 2,612 REOs YTD Inventory of pending foreclosures estimated at 12,900, 13 per 1000 housing units. Office of Economic Development and International Trade 14

Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 ($ in '000s) Sales Existing Home Sales & Prices $250 $200 $150 $100 $50 $0 Existing Homes Sales: Seasonally

15 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 ($ in '000s) Sales Existing Home Sales & Prices $250 $200 $150 $100 $50 $0 Existing Homes Sales: Seasonally Adjusted Sales and Median Price 1,500 1, Volume of homes sold through realtors well above last year and rising. Transaction prices rising since Feb. Prices stabilized? Trend or temporary increase? SF Sales Condo Sales SF Median Price Condo Median Price Data Source: Florida Realtors. Office of Economic Development and International Trade 15

16 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 (Thousands) Housing Units Authorized by Permit 1,400 1,200 1, Data Source: US Census Bureau Residential Building Permits (3 Month Trailing Average) Miami-Dade US Units authorized by permit remain at low levels compared to the boom years, but showing slow positive trend. A large share of the units (70%) are in multi-family (5+) structures. 2,200 units from Jan to Aug (+63%) Office of Economic Development and International Trade 16

17 2008:Q1 2008:Q2 2008:Q3 2008:Q4 2009:Q1 2009:Q2 2009:Q3 2009:Q4 2010:Q1 2010:Q2 2010:Q3 2010:Q4 2011:Q1 Commercial Real Estate Miami-Dade Commercial Vacancy Rates 16% Office 14% 12% Industrial 10% 8% Retail Centers 6% 4% Retail 2% Data Source: CoStar Group Vacancy rates still high but saw a slight decline in last 6 months. Positive net absorption in last 4 quarters for all except Retail, not in centers. Office of Economic Development and International Trade 17

18 2008:Q1 2008:Q2 2008:Q3 2008:Q4 2009:Q1 2009:Q2 2009:Q3 2009:Q4 2010:Q1 2010:Q2 2010:Q3 2010:Q4 2011:Q1 Commercial Real Estate $35 $30 $25 $20 $15 $10 $5 Miami-Dade Commercial Lease Rates Office Retail Retail Centers Industrial (right axis) $12 $11 $10 $9 $8 $7 $6 Industrial Lease rates (not accounting for concessions) continue declining, except in retail centers. Data Source: CoStar Group Office of Economic Development and International Trade 18

19 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Taxable Sales 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 Total Sales Miami-Dade Taxable Sales Seasonally Adjusted, Million $ Consumer Dur. & Non-Dur. (Right Axis) nonlinear trend 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 Taxable sales increasing since spring 09. July (2011) sales were $3.2B (SA). Since Jun 09 Miami Dade has recovered nearly 3/4ths of what was lost from peak (May 06) to trough. Data Source: FL Office of Econ. and Demog. Research; OEDIT Office of Economic Development and International Trade 19

20 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Tourism 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% Overnight Visitors Year/Year % Change Data Source: Greater Miami Convention and Visitors Tourism indicators are much improved over last year. Visitors in 12 months ending in July are 7.8% above same period last year. February-July, hotel occupancy and room rates were up yr/yr. CDT in 12 mo. ending in July up 13% over same period last year. Office of Economic Development and International Trade 20

21 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 International Trade 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Value of International Trade from Miami-Dade Millions of US$ Data Source: USATradeOnline IMPORTS EXPORTS Total trade from MIA and POM running well ahead of last year, and 2009 levels. Almost 2 years of steady growth, especially at MIA. For 12 month ending in July, total trade up 22% vs same period last yr. Some diversification in trading partners occurring (Europe, Asia). Office of Economic Development and International Trade 21

ECONOMIC CURRENTS. Vol. 2, Issue 1 THE SOUTH FLORIDA ECONOMIC QUARTERLY. Introduction. In this Issue:

ECONOMIC CURRENTS. Vol. 2, Issue 1 THE SOUTH FLORIDA ECONOMIC QUARTERLY. Introduction. In this Issue: ECONOMIC CURRENTS THE SOUTH FLORIDA ECONOMIC QUARTERLY Vol. 2, Issue 1 Introduction Economic Currents provides an overview of the South Florida regional economy. The report combines current employment,