In Miami, auto dollars surge while construction spending still depressed

Auto sales are racing back into recovery mode throughout South Florida, while construction spending remains in what still looks like a depression.

One of the best measures of local economic activity, taxable sales, shows how two of the most hammered sectors of Miami-Dade’s economy have taken very different paths post-bust.

An index of industry sales produced by the Legislature’s Office of Economic and Demographic Research shows construction spending in Miami-Dade still down 45 percent from peak levels hit in the fall of 2006. Automobile spending reached a record level in October of that year, too, but has made up significant lost ground and now is down just 10 percent from its past high-water mark.

Of course, the auto industry has a natural advantage. Homes last for generations, but cars are built to die. The recession saw car owners pumping more money into repairs to avoid that big-ticket purchase of a replacement, and the current surge into auto sales was mostly thanks to pent-up demand as vehicles increasingly became beyond mechanics’ reasonable assistance.

With its steady stream of wealthy foreign buyers, Miami-Dade also has seen its auto sales bounce back quicker, which makes a wider gap when compared to housing.

Statewide, auto spending is down 17 percent from past peaks, compared to 38 percent for construction, a gap of 21 percentage points. That’s compared to a 35-point spread in Miami-Dade. The gap is only 14 points in Broward, where auto spending is down 19 percent and construction spending down 33 percent.

Miami’s new crop of high-rise towers, coupled with a surge in home prices, has generated much optimism that South Florida has entered a new chapter in its real-estate rebound. And the numbers on sales and closing prices certainly show momentum and a positive trajectory.

But when it comes to a broad measure of spending, the construction industry remains in a slow, painful recovery.

The Miami Herald’s Economic Time Machine seeks to give the long view on the latest financial numbers for South Florida. Visit for analysis of the numbers that drive the local economy. Our ETM index tracks more than 40 local indicators to measure where the economy has “landed” post-bust when compared to earlier economic conditions. The latest reading: July 2003.

Read more The Economic Time Machine stories from the Miami Herald

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