Economic Overview Introduction to Metropolitan Region The Subject Development Site resides within the Miami-Fort Lauderdale-Pompano Beach MSA, which is located on the southeastern coast of Florida. The MSA is comprised of Broward, Miami-Dade, and Palm Beach Counties. Known as the Gateway to the Americas, the region is an ideal location for conducting international business, especially in Latin America. As such, the MSA accounts for the majority of Florida s total export of goods to overseas markets. With a diverse, educated labor force, exceptional research universities, and thriving clusters of aviation, life sciences, and professional services companies, Miami-Fort Lauderdale-Pompano Beach MSA will continue to serve as a cluster of growth for Southeast Florida and contribute to Florida s ongoing development as the innovation hub of the Americas. Key Miami, FL Statistics Economic Indicators Total Employment 2,700,000 (Sept. 08) 12- Month Job Growth -3.9% (Apr. 09) Unemployment Rate 8.1% (Apr. 09) Infrastructure Florida is the nexus of the Western Hemisphere s transportation links. The Florida transportation infrastructure is multi-modal and includes highways, railways, seaports, airports, and a spaceport that enable companies to gain quicker access to markets and reduce bottom-line costs. The Development Site and surrounding region are easily accessible via Interstates 95 and 75, both of which run north-south along Florida s east and west coasts, region to Orlando. In addition, air transportation is available at three local international airports. Miami International Airport, Fort Lauderdale-Hollywood International Airport and Palm Beach International Airport are all located within the MSA region. In 2004, Florida s commercial airports served more than 125 million passengers, including nearly 40 million out-of-state visitors. Florida s commercial airports also handle nearly 6% of the nation s air cargo. Three and a half million tons of air cargo valued at $33.4 billion moved through Florida s airports in 2004, making them as crucial to businesses and 16
international trade as they are to tourism. The Port of Miami-Dade, a foreign trade zone, is the world s leading port for cruise line traffic. For fiscal year 2007, the Port of Miami-Dade handled approximately 3.8 million cruise passengers and approximately 7.84 million tons of cargo, and is known as South Florida s primary bulk cargo port, while the Port of Palm Beach is the 4 th busiest container port in Florida and the 18 th busiest in the continental U.S. Miami is the leading port for Latin America and the Caribbean, handling 40% of U.S. trade with the region. Economy The Miami economy is based on the area s attraction as a tourist destination and on its role as the gateway to Latin America and the Caribbean. Tourism, trade, international finance, health care, and entertainment have become major industries in Miami s bilingual business community. With more than 10 million domestic and international visitors spending over $10 billion annually, tourism dominates the Miami economy. Roughly half of the visitors to Miami and tourism spending come from abroad. Both domestic and international visitor spending can fluctuate as much as 30% per year, depending on U.S. and foreign economic performance. Tourism and trade depends on a comparatively large transportation sector, with the Port of Miami and Miami International Airport having a huge impact on employment and the economy. As the U.S. gateway to Latin America and the Caribbean, Miami has attracted a large community of businesses dealing with these regions. More than 1,250 multinational corporations conduct business in Florida, and Miami has the second largest concentration of domestic and international banks on the East Coast after New York City. Miami also has the largest concentration of medical facilities in Florida, with 28 hospitals earning more than $530 million annually, serving patients from the U.S., Caribbean and Latin America. Employment With the largest and most diverse labor force in the state, the Miami-Fort Lauderdale- Pompano Beach MSA offers a vast and growing talent pool from which to select. Employment in the MSA has been growing at an average rate of 1.2% annually over the past 10 years, and the workforce now totals over 1.1 million persons. Employment growth over the next five years is forecasted to be 1.4%. Miami s largest employment sector is trade, transportation, and utilities, which accounts for 24.3% of the workforce, compared to a 19.4% proportion in the national workforce. Employment in the sector totals over 250,000 jobs and is stable, growing at less than 1% annually. A rapidly growing sector is professional and business services, which is the second largest sector, with 160,000 employees, equal to 15.5% of total employment. This sector grew at an average annual rate of 4.3% over the past 10 years, adding 55,000 new jobs, and is projected to grow 1.6% annually over the next five years. The professional and business services sector will add another 13,400 jobs over the five-year period. The relatively small construction sector is expected to grow faster than other sectors over the next five years at 5.6% per year, adding a total of 13,300 jobs. The educational and health services sector is expected to add the most jobs, a total of 14,500, over this 17
period, while growing at an annual rate of 2.1%. Leisure and hospitality employment is expected to grow at an annual rate of 1.7%, slightly below the 2% annual growth achieved over the past 10 years. Government sector employment, which accounts for 15% of the workforce, is stable and is not expected to increase over the next five years. Largest Employers The region possesses a bustling network of aviation, professional services, and life sciences employer clusters. More than 1,000 multi-national companies have leveraged the region s strengths in international business by opening an office in the region. The region also serves as a network access point of the Americas, digitally connecting North and South America. While trade, transportation, and utilities is the largest employment sector in the regional economy, the largest employers are public sector agencies and populationserving enterprises such as educational institutions and health care facilities. Large employers in the transportation sector include American Airlines, which was among the 10 largest employers, United Parcel Service and United Airlines. The airlines have suffered nationwide and have been forced to cut jobs elsewhere, but their Miami operations are doing well due to highly profitable Caribbean and Latin American businesses, and their payrolls in the area remain stable. Tourism accounts for a larger share of employment in Miami than in other large MSAs, but health care, communications, and business services are becoming increasingly important to the local economy. Major employers in the tourism sector include cruise ship operators such as Carnival Cruise Lines and Royal Caribbean. Also on the 10 largest employers list is Precision Response Corporation, which provides a call center for outsourced e-commerce customer care. The company was recently acquired by IAC/Interactive Corporation, which employs over 7,000 people and is the parent company to the Home Shopping Network and Ticketmaster. One of the largest technology employers is MasTec, a leading communications, intelligent traffic and energy infrastructure service provider for North America and Brazil. With over $1 billion in annual sales, the company is based in Miami and employs over 4,000 people in the MSA. Demographics Miami s population has grown tremendously in the last 20 years. Now the second most populous county on the east coast, Miami-Dade County grew from two million residents in 1995 to 2.4 million in 2005, and is projected to increase to nearly 3.6 million residents by 2020. Most growth has come from net migration as opposed to natural increases. This trend should continue for the next five to ten years as the MSA continues to attract residents from both domestic and international origins. The expanding, competitive, and young workforce is lured to Miami by improving economic prospects and quality of life. Miami has the fourth largest public school system in the United States with more than 70% of graduating seniors continuing to college. The median age of Miami residents has dropped to 35.6 years, turning Florida s coastal retirement communities into family cities. The average household size is 2.84 persons, and the median household income is $46,592. While this is below the U.S. median 18
income of $47,971, Miami s income growth rate is expected to match the national level over the next three years. Miami s median income is relatively low because of the abundance of households that are either very young or very old, neither of which falls into the prime earning years. When adjusted for age, the MSA s income compares favorably with that of the United States. International Advantages International Business Hub Foreign Direct Investment International Trade No other site in the Western Hemisphere can match Florida s unique combination of strategic geographic location, state-of-the-art infrastructure, multilingual workforce, and concentration of corporate and financial resources. All of these factors combined make Florida a leader in international trade and foreign direct investment. From Florida, companies can do business globally with great ease, both virtually and in the real world. Florida is host to some 300 regional and hemispheric headquarters of companies from all over the world, making it a pillar of international business and trade. Many international firms base other facilities, such as those for warehousing, distribution and manufacturing, in Florida to take advantage of its easy access to global markets. Florida is a leader in foreign direct investment, attracting companies from all over the world. Ranking 9th among all U.S. states in total holdings by foreign-affiliated firms and 5th in employment in 2006 (most recent data), Florida has emerged as a hotspot for foreign direct investment (FDI). Merchandise trade valued at $115 billion flowed through Florida s airports and seaports in 2007, making the state one of the world s leaders in international trade. Enterprise Florida and its network of economic development partners around the state provide valuable exporting assistance services to Florida-based companies looking to expand their markets internationally. Foreign Trade Zones Florida's international businesses enjoy access to the second largest FTZ network in the country, encompassing 20 Foreign Trade Zones, mostly located at or near its seaports and international airports. Worldwide Connectivity Quality of Life International trade and FDI thrive in Florida due in part to the state's excellent infrastructure. Through state-of-the-art multi-modal transportation infrastructure of highways, railways, seaports, airports, a spaceport, and one of the most advanced telecommunications networks in the world, Florida enables international businesses to easily connect with their worldwide customers in every possible way. In addition, there are more direct flights connecting Florida with Latin America and the Caribbean than all other U.S. states combined. Metropolitan Miami has developed into a cosmopolitan urban area offering a vibrant business and cultural community and an exceptional quality of life to its residents. With an average temperature of 75 degrees, Miami provides a casual environment where outdoor activities take place throughout the year. Miami offers a lower cost of living than most major metropolitan areas and an abundance of popular attractions. Miami is a premier community in which to live and work. The region is home to a superior business environment, affordable housing, a 19
vibrant culture, family-friendly neighborhoods, and a plethora of shops and restaurants. In addition, Miami offers numerous outdoor activities, access to Latin America and the Caribbean, and beautiful weather and beaches. 20