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 miamiherald.com/economic-time-machine 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.