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Perspectives on the Economic Outlookfor 2012-2013
1. Perspectives on the Economic Outlook
for 2012-2013
Tony Villamil, Chairman
Economic Roundtable
The Beacon Council
July 20, 2012
2. The 2011-2012 Economic Environment Presented at Last Year’s
Board Retreat: Update to Current Outlook
Last Year‘s Presentation 2011-2012 Current Outlook 2012-2013
• Prolonged period of below potential economic • Greater-than-expected slowdown in first-half of
growth in U.S., foreign economies, U.S. states and 2012 (U.S., Eurozone and Emerging Markets), with
regions continued slow growth through 2013. Global
recession in 2013???
• Highly constrained fiscal situation, public sector a • Fiscal pressures likely to continue through 2013 at
“drag” on employment growth U.S., Florida and local levels
• Possible pick up in inflationary expectations due to • Not happening as of mid-2012. Outlook positive
sharp monetary base expansion for low and stable inflationary expectations
through 2013, with continuation of very low real
interest rates
• Counties with diversified economic base in Florida • YES! But for 2013 slowing European and Emerging
will outperform counties dependent on population- Markets are a concern for globally driven counties
driven economic activity: ADVANTAGE MIAMI- and regions like South Florida
DADE
3. Macroeconomic External Factors Impacting the Outlook for Miami-Dade:
A Rank Order
MDC
Global Economy
U.S. Economy
Florida Economy
4. Global Economy: A Key Driver for Miami-Dade County Has Started
to Slowdown in 2012
Region/Country 2010 2011 2012E 2013F
World Output Growth (%), of which 5.3 3.9 3.0 3.5
Euro Area 1.9 1.5 -0.5 1.0
Japan 4.4 -0.7 2.0 2.5
Canada 3.2 2.4 2.0 2.5
United Kingdom 2.1 0.7 FLAT 1.5
Selected Emerging Markets
China 10.4 9.2 7.0 7.5
Brazil 7.5 2.7 2.5 4.0
Mexico 5.6 3.9 2.0 3.5
Argentina 9.2 8.9 2.0 1.0
Colombia 4.0 5.9 4.0 4.5
Chile 6.1 6.0 5.0 5.5
Peru 8.8 6.9 6.0 5.0
Source: International Monetary Fund World Economic Outlook, July 2012 Update and United Nations ECLAC,
June 2012 and the Washington Economics Group (WEG) for Estimates (E) and Forecasts (F).
5. U.S. Economy: Below Potential Economic Growth Through 2013
Indicator 2010 2011 2012E 2013F
Economic Growth ( % Real GDP) 3.0 1.7 1.5 2.0
PCE Deflator (∆ %) 1.2 2.1 2.0 2.0
Payroll Employment (∆ %) -0.7 1.2 1.0 1.5
Unemployment Rate (%) 9.6 9.0 8.0 7.5
Sources: Bureau of Economic Analysis, Bureau of Labor Statistics and The Washington Economics Group,
Inc. for Estimates (E) and Forecasts (F).
6. Florida Economy: Modest Growth, but Strong “Headwinds”
Late 2012 and Into 2013
Indicators 2010 2011 2012E 2013F
Population (∆ %) 1.0 1.1 1.5 1.0
Real GDP (∆ %) 1.4 2.5 2.0 1.5
Total Taxable Sales (∆ %) 2.4 6.2 4.0 3.5
Total Non–Ag Employment (∆ %) -0.7 1.2 1.0 1.5
Export Growth (∆ %) 22.0 19.0 15.0 8.0
Existing Single-Family Home Sales(∆ %) -4.0 -3.0
Sources: Florida Department of Economic Opportunities, Enterprise Florida, Florida EDR, Florida Association of
Realtors and The Washington Economic Group, Inc. (WEG) for Estimates (E) and Forecasts (F).
7. Miami-Dade County Economic Indicators Outperforming the State this
Year, but 2013 Depends on Global Developments
Indicator 2010 2011 20121
Payroll Employment (∆ %), of which -0.4 2.3 1.7
Construction -12.5 -4.0 -11.0
Wholesale Trade -1.0 1.9 3.2
Retail Trade 2.6 4.9 5.2
Financial Activities -2.6 0.8 -2.2
Professional & Business Services 0.6 4.3 2.0
Education and Health Services 1.2 4.1 5.1
Leisure and Hospitality 4.2 3.4 2.6
Total Taxable Sales Growth (∆ %) 2.1 11.7 5.9
Total International Trade (∆ %) 20.0 17.0 11.0
Overnight Visitors(∆ %) 5.6 7.0 9.6
Sources: Florida Department of Economic Opportunities, Florida EDR, U.S. Census Bureau, Int’l Trade Statistics and
Greater Miami Convention and Visitor’s Bureau.
1Same period year ago. * Miami-Miami Beach-Kendal Metropolitan Division.
8. Miami-Dade: Positive Business Climate, but Laboring Against Strong
“Headwinds” 2012-2013
FED Family Survey
• Sharp decline in U.S. real family median income of 7.7% between 2007 and 2010
• U.S. family median net worth down a large 38.8% during same period
Florida (FED of Atlanta)
• Lost 11.5% of total employment from peak to bottom
• Has gained only 2.4% of the jobs back through May 2012
• Large Metro Areas “improving,” but smaller Metro Areas “contracting”
Global Economy (IMF, July 2012 Outlook Update)
• Past 3 months, global recovery has shown signs of further weakness
• World ouput down to 3% growth this year, with modest pick up in 2013
9. Conclusions: Keeping This Economist “Awake in Miami”
Miami-Dade’s economy outperforming rest of Florida through 2012, with
2013 outlook dependent on global developments
Real estate markets recovering faster-than-expected in Miami
Dade, primarily due to “cash” purchases. How sustainable in 2013?
Global economy slowing down in mid-2012, with modest growth expected in
2013. Risks on downside
Significant differences in Florida regional performance depending on
economic structure and diversification
Other than that, watch the general elections of Nov 2012!