Miamidade County Economy Chugs Uphill But Gas Price Could Stall Climb
Written by Miami Today on March 31, 2011
By Ashley D. Torres
The most recent Miami-Dade County taxable sales numbers point to a moderately improving economy. However, the tipping point back to less consumer spending could be gas prices at $4 per gallon.
Miami-Dade’s January total taxable sales, which represent consumer spending on goods subject to state sales tax, rose 6.1% to $2.974 billion compared to $2.788 billion in January 2010, according to figures from the state legislature’s Office of Economic and Demographic Research.
Compared to the state, said Manuel Lasaga, president of consulting firm StratInfo, Miami-Dade is performing better in the overall growth rate of taxable sales.
This growth partially springs from strong local tourism and retail sales fueled by Miami’s international orientation and the currency appreciation of visitor markets such as Brazil.
"We are being helped by the stronger than expected influx of visitors," Mr. Lasaga said, "and their spending in our local economy."
Tourism and recreation taxable sales climbed 5.4% in January to $706.9 million over January 2010′s $666.4 million.
In addition, January’s average daily hotel room rate rose to $171.01 from January 2010′s $164.66, up 3.9%, according to Smith Travel Research’s Trend Report. January’s occupancy saw a slight year-over-year dip of 0.6% to 74.7% from 75.2% in January 2010.
Tourism continues to spur Miami-Dade’s economy as visitors dining at area restaurants and shopping in local malls bolster taxable sales.
Consumer nondurable taxable sales of items such as clothing, paper products or food also rose 7.2% to $999.2 million from $923.3 million in January 2010.
As South Florida consumers have more disposable income, Mr. Lasaga said, they like to dine out.
January consumer durable taxable sales, which include big-ticket items such as appliances, also grew year over year to $251.4 million from January 2010′s $244.2 million, up 2.7%.
"Unfortunately," said Sean Snaith, the University of Central Florida’s Institute for Economic Competitiveness director, "oil prices are going to take the wind out of consumer sales."
Rising gas prices are like a tax on consumers, said J. Antonio Villamil, St. Thomas University’s business school dean, transferring dollars abroad. If gas prices reach $4 per gallon, he predicted, consumer spending will dip below levels of the prior six months.
Rising gas prices could also hammer tourism, discouraging road trips and raising the cost of airline tickets.
However, if jobs grow, unemployment declines and gas prices don’t rise much higher, Mr. Snaith said, that could offset any falling consumer confidence.
Miami-Dade’s unemployment rate fell in January for the first time since 2007 to 13.3% from 13.4% in December 2010, according to the county’s Office of Economic Development and International Trade. The unemployment rate is still higher than January 2010′s 11.9%. Nonetheless, Miami-Dade employment grew by nearly 4,000 jobs from December to January while the labor force grew by over 3,000.
Building investment taxable sales for purchases such as building construction materials climbed 6.7% in January to $104.6 million from $98.2 million in January 2010.
The rise indicates that the slide in residential and commercial construction may have hit bottom, Mr. Lasaga said. However, the year-over-year climb in building investment is also a result of much lower numbers during the recession.
Business investment taxable sales, which include business equipment purchases, also grew year over year in January to $521.2 million from January 2010′s $498.1 million, up 4.4%.
The growth in business investment taxable sales is slower than the national average, Mr. Lasaga said, and, while encouraging, does show that local companies aren’t aggressively investing as they have in previous economic recoveries.
Autos and accessories taxable sales also climbed 9.3% year over year in January to $390.5 million from January 2010′s $357.6 million.
The rise in autos and accessories taxable sales is attributed to pent-up demand for vehicles, Mr. Villamil said, as well as strong car part exports.
Florida Internation University is partnering with Miami Dade Public Schools aiming to increase graduation rates. Read the complete story in e-Miami Today.