The Miami metro area was pummeled by the Great Recession. The area’s economy bled jobs for 23 consecutive months. Home prices and housing markets were hammered. Bankruptcies jumped, while incomes and consumer spending slumped. Seven years after the beginning of the economic downturn, the Miami economy is still recovering. We have a cautiously optimistic outlook for Miami for 2014.
Area labor markets have made consistent gains since 2010. At the pre-recession peak of June 2007, Miami had a total nonfarm payroll of 2,425,000 jobs. By January 2010, the area lost approximately 250,000 jobs or around 10 percent of its total nonfarm employed. Beginning in 2010, modest job growth resumed after the near three-year hiatus. As of December 2013, Miami has regained 170,000 of the jobs lost from the Great Recession, leaving about 80,000 jobs to get back to its pre-recession peak. We expect approximately 49,000 jobs to be added in Miami in 2014 and another 56,000 jobs in 2015. This will elevate Miami payrolls to its pre-recession peak by 2015Q3.
Miami housing markets were hit disproportionately hard in the recession. Housing starts peaked in 2005Q3 at a 42,072 unit annual pace. Housing starts then bottomed out in 2009Q2 at a 3,093 unit annual pace. Our forecast has Miami housing starts reaching a 17,400 annual rate by 2014Q4 increasing up to 19,100 by 2015Q4. A firming labor market, strengthening income growth and increasing pent-up demand will be a boost for housing markets in 2014, with some drag from increasing mortgage rates.
Consumer spending in the region steadily increased throughout 2013 and heading into 2014. Sales tax revenues from the Miami metro area increased 6.7 percent from a year ago in December. Tourism has also been a boost to the area’s economy in 2013. According to Smith Travel Research, hotel occupancy in Miami was at 78.2 percent in December. This was third in the U.S. only to Oahu and New York City. Miami’s tourism and retail industries will continue to benefit from a pick-up in the overall U.S. economy and a synchronized global economic expansion.
Click here for the complete Miami MSA Regional Economic Update: Miami 2013Q4.