Miami-Dade job growth forecast to continue despite downturn in global economy
By Frank Norton
Having partially recovered from severe job losses early last year, Greater Miami should see even stronger economic gains in 2003 if global conditions stabilize, analysts say.
Aside from the specter of war with Iraq and a rocky weapons treaty with North Korea, local industry faces added questions over whether its South American business partners will grow enough this year to help revive international business in Miami-Dade County.
Top Latin American wildcards are whether Venezuela can bring an end to its political crisis and what shape Brazilian economic policy will take under recently inaugurated President Luis In·zio "Lula" da Silva.
Still, a sluggish revival of 1%-2% growth in Greater Miami's gross domestic product should continue through the first half of the year and gain speed in the second, said J. Antonio Villamil, CEO of the Washington Economics Group in Coral Gables.
"We're well-positioned to grow faster than the national economy, depending on what happens in Brazil," he said, referring to that country's new administration.
"But he (President da Silva) seems now to want to attract foreign investment there and that will be beneficial to our international trade and banking sectors," he said.
In terms of job growth, local forecasters expect strong investment in residential development and public infrastructure to help buoy construction employment while slowly improving hospitality and retail sales should help consumer businesses move toward previous staffing levels.
The question is whether job growth can continue to outpace growth in the labor market, said John Cordrey, vice president of research for the Beacon Council, the county's economic development agency.
Miami-Dade County's jobless rate fell to 7% in November from 8.4% a year earlier, the largest drop among US metropolitan areas, the US Department of Labor said in its most recent report.
"I don't think we'll see an improvement like that next November," Dr. Cordrey said, "but nevertheless we're moving in the right direction."
While major public works will provide the county significant economic stimuli, private spending must also resume if the region is to continue recovering, he said. Fortunately, weak capital investment over the past year has slowly led to shortages in service capacity likely to be financed in 2003, he added.
As for individual sector growth, housing demand should ease next year since so much of it was already tapped in '02, while healthcare and business services demand should accelerate due to population growth, analysts said.
The biggest challenge, however, is building on gains made in the tourism industry, since the specter of war and strife in South America are largely uncontrollable obstacles.
"2003 will be better than last year but not as good as two years ago," said William D. Talbert III, president and CEO of the Greater Miami Convention & Visitors Bureau.
While the cruise industry should continue to stabilize, Mr. Talbert said, the health of the hotel industry is less certain due to high inventory.
With South America tourism to this region not expected to recover in 2003, a war with Iraq could further dampen or even reverse steady gains realized over the past year.
That eventuality would similarly impact South Florida's tourist-dependent retail sector.
"Retail will remain as it has in the past couple of years: 'mixed,' " said Rick McAllister, president and CEO of the Florida Retail Federation.
Despite weakening consumer confidence, analysts see discounters, drug stores and home furnishings posting the strongest gains, since those sectors are least exposed to fluctuations in South Florida travel and tourism. Instead, they will tap stable demand growth from value seekers, elderly consumers and homebuyers.