South Florida’s healthcare industry accounted for 60 percent of the region’s economic recovery since the recession began.
That’s one startling conclusion from some local economic data released Friday morning.
The new estimates of economic output show 2011 was a feeble year for the region’s $263 billion economy, with overall output still down 7 percent from 2007 in real dollars — that is, when adjusting for inflation.
What’s holding the economy back? Housing values, of course. Lower real estate values cut into how the Bureau of Economic Analysis calculates economic output tied to living expenses, and the real estate category — which includes all rents paid in the region — plunged 5 percent in 2011 and is down 11 percent since 2007.
In all, the real estate and construction sectors account for about 60 percent of South Florida’s lost economic output since 2007 — taking about $11 billion out of the economy in that stretch of time. That’s the equivalent of closing every single hotel, restaurant and bar for one year, according to the federal statistics.
Meanwhile, healthcare finished 2011 as the only sector in South Florida’s economy to continue growing each year throughout the 2007-09 recession and recovery. It’s up 10 percent since 2007. The problem: steady growth by healthcare couldn’t compete with a depression in the housing industry. Healthcare only added about $1.5 billion into the economy during the recession, or about a dime for every dollar lost on housing.
Of course, 2012 was a strong year for real estate, so these calculations are a bit dated. And comparing one year with another only gives a partial picture of what happened during those turbulent years of financial crisis and economic rebound. Still, the new data show the ongoing legacy of South Florida’s housing crash and the crucial role healthcare spending plays in the economy.
But with medical spending and insurance reimbursements under pressure in Washington and in hospitals across the country, healthcare may not be the economic-growth engine it was once was. For the first time, healthcare is now losing jobs in Miami-Dade, Florida’s largest local economy.
Overall, Friday’s report was fairly weak for South Florida, a region that stretches from Miami-Dade to Palm Beach.
South Florida’s economy has been growing since 2010, though 2011 saw the expansion cut in half to less than 1 percent. South Florida’s .7 percent growth is about half the national average in 2011 of 1.6 percent for the nation’s metropolitan areas.
The Miami Herald’s Economic Time Machine blog seeks to put South Florida’s recovery into historical perspective. We try to take the long view on economic stats. For analysis of the latest economic news, visit miamiherald.com/economic-time-machine and look for our weekly chart on Page 3 of Business Monday.