Turnaround time: employment is on the rise, Latin America is coming back, the US economy has emerged from recession, real estate is strong and the visitor industry is rebounding. Add them all up, and the future for Miami-Dade starts to look damn good - Overview

South Florida CEO, Jan, 2004 by J.P. Faber

This is it. Really. After a series of false starts, dashed hopes, disappointing statistics and inaccurate predictions, the great economic turnaround is apparently, and finally, underway. By all measures--local, national and international--everything points to a rousing 2004 for Miami-Dade County and its most vital industries, including trade, tourism and real estate.

"Going forward, 2003 is like the hump, the inflection point," says economist J. Antonio Villamil, CEO of the Coral Gables-based Washington Economics Group. "Those elements relative to the South Florida economy are recovering."

What makes Villamil optimistic is that Miami-Dade County has continued to grow despite "a significant amount of adverse effects" in recent years. These have included the US recession, economic downturns in major trading partners such as Brazil, Argentina and Venezuela, a more recent European slowdown, and the still-walloping fallout of 9/11, which hit such vital South Florida industries as aviation and international travel. All those sectors, and more, are now on the mend.

Villamil predicts 3 percent growth in 2004 for Miami-Dade's estimated $72 billion GDP, itself larger than that of all Central American countries combined. The reasons for Villamil's optimism are as varied as the local economy has become.

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First, there is the return of Latin America, where economic recovery in countries such as Brazil will create more demand for imports from Miami. Predictions are that between $54 billion and $55 billion will pass through the Miami Customs District this year--not yet back to 2000's record $56 billion in trade, but way up from 2002's $50 billion. Next, there is the growing strength of the Euro, which was trading at a ratio of one to $1.24 as of press time; it's expected that one Euro will cost $1.30 later this year. A stronger Euro means more investment and visitors, especially from Spain, France, Germany and Italy.

"As we look back at 2003, we are going to view it as the transition year, the year when the major drivers of our economy started to turn around," agrees Dr. John Cordrey, director of research for The Beacon Council. "Take the visitor industry. It had reached record numbers in 2000, then the impact of 9/11 saw it shrink. Now we are seeing the occupancy rates expanding and price rates coming back up. Clearly 2003 was bigger than 2002, and as we look at 2004, we have a chance to get back to the record numbers of 2000, when we had 11.1 million visitors."

In the all-important area of real estate, predictions call for a strong year on the residential side, and improvements in the commercial and industrial areas.

"I'm quite convinced that housing is still gong to be a strong motor in the economy and interest rates are going to stay low, though they will rise a little bit," says Dr. Michael Connelly, chair of the economics department at the University of Miami. "In anticipation of them rising, we are seeing record applications for new building permits and record levels of construction. That is a very big factor in South Florida, especially with the condominium developments along the seashore."

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As for commercial and industrial real estate, says Terre Blanca de Ulloa, Cushman & Wakefield's Miami-based managing director for Florida, "Leasing [in 2004] is looking very good for both, with activity increasing in the last quarter [of 2003]. Tenants seem to be getting more comfortable with the state of the economy." While leasing demand will not be dramatic in the first half of the year, "it will be strong in the second half," she says.

Of course it is jobs, more than any other measure, that signal a real recovery, and Cordrey predicts good news. "As we headed into the fall [of 2003] we were 9,000 to 10,000 jobs ahead of 2002," says Cordrey. "We think that 2004 will be a record year of employment in Miami-Dade. Employers have enough confidence and enough sales to hire new people."

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While much credit for those jobs goes to the growing US and Latin American economies, local economic development agencies have clearly helped. The Beacon Council estimates that its programs created 1,829 direct new jobs in fiscal 2003; it's goal for 2004 is 2,500 direct new jobs.

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Since last year, The Beacon has focused on retaining and growing local employers rather than on recruiting new companies to the area. That goal remains a high priority for Calixto Garcia-Veez, Citibank's top executive for South Florida and this year's chairman of The Beacon Council. "We had tremendous success last year with our local business/local jobs initiative," says Garcia-Valez. "I think it's clear that Miami's backbone is small businesses and entrepreneurs. To retain and help those businesses expand is a critical priority over the next year."

Another helping hand for The Beacon's job creation efforts is coming from South Florida Workforce, the federally funded agency that has traditionally placed welfare recipients into unskilled jobs. Under new director Robert Crook, the agency is upgrading its mission to focus on providing skills for higher level jobs. Last year, for example, when Miami-Dade transportation director Roosevelt Bradley announced the purchase of 600 new buses, Workforce set in motion a training program for 60 new diesel mechanics. For another 21 Miami-Dade companies, including Pharmed, Miami Children's Hospital and BioNucleonics, Workforce paid 50 percent of the salaries for new workers receiving on-the-job-training.