Economic free fall in Brazil and Venezuela. Plummeting gold prices. A shift in computer chip manufacturing to Asia. Those are the forces at work that help explain Miami International Airport’s 14.17 percent, approximately $8.95 billion decrease in 2015 trade.
It marks an unprecedented third consecutive year for trade to fall at MIA, the state’s leading “port” by value of trade and the nation’s 19th most important among the roughly 475 airports, seaports and border crossings. When you look at just airports, it ranks fifth, trailing only New York’s Kennedy International, at No. 2; No. 7 O’Hare International in Chicago; Los Angeles International, at No. 9; and No. 18 Dallas-Fort Worth International.
For 2015, MIA’s trade with the world totaled $54.19 billion, down from $63.14 billion in 2014 and $70.72 billion in 2012, the record year. From the 2012 record, MIA’s trade is down $16.53 billion, a 23.37 percent drop.
Exports totaled $32.73 billion in 2015, down from $38.46 billion in 2014 and $44.80 billion in 2012. Imports were valued at $21.46 billion in 2015, $24.68 billion in 2014 and $25.93 billion in the record year of 2012.
Take a look at the trade by tonnage, and the story is not nearly as dreary. Down 3.5 percent overall and 11.46 percent for exports, tonnage for imports actually increased in 2015, up 1.39 percent. On the downside, the “why” gets back to what’s going on in Brazil and Venezuela, with gold and with computer chips.
Both PortMiami and Port Everglades — also primary hubs for South Florida’s trade with the world — rank among the nation’s top ports as well, at No. 35 and No. 36, respectively, and among the tops in the state for both containers and tonnage.
Combine the three and you have about two-thirds of all the trade that occurs in Florida. As was the case with MIA, trade in the South Florida Customs district, which also includes Fort Lauderdale International Airport and the Port of Palm Beach, also fell for an unprecedented third consecutive year in 2015.
Airports rank relatively high when ranked by the dollar value of trade but less so by tonnage, since ships are more suited to carry heavy cargo like steel, cement and oil. MIA ranked No. 90 by tonnage in 2015.
MIA’s trade is being hard-hit by the acute economic and political challenges consuming Brazil and Venezuela; by the concurrent drop in the price of gold and diminishing interest in it by investors previously skittish about the global economy, particularly during the economic downtown of 2009 and 2010; and by Intel’s decision to move computer chip manufacturing from outside San Jose in Costa Rica to Malaysia.
I will touch on each quickly, since I have addressed them all recently.
MIA trade with Brazil fell $2.71 billion in 2015 when compared to 2014. MIA’s perennial largest trade partner, Brazil has historically quenched its appetite for cellphones, printers, medicine and computers as well as aircraft engines and parts by shipments originating at MIA and its leading seaports. With its steep currency devaluation against the strong dollar, Brazil and its citizens are finding it increasingly difficult to afford those items, whether luxuries or necessities. Venezuela is suffering the highest inflation rate in the world and its currency is, likewise, hobbled. Although most of the damage to its economy has been done in previous year, its trade with MIA fell another $604.08 million in 2015.
Only Brazil’s trade with MIA fell more in dollars than Costa Rica’s in 2015. Costa Rica’s MIA trade dropped $2.52 billion in 2015. Because its trade with MIA is smaller than that of Brazil’s, the percentage drop was far steeper, at 60.90 percent. Computer chip imports into MIA fell 97.85 percent, from a No. 5 ranking to No. 127 in one year. The drop in value was $2.17 billion — almost all of the decrease in the two-way trade between MIA and Costa Rica.
Then there’s gold.
MIA became one of the nation’s leading hubs for gold trade during the global economic crisis — with Switzerland rising from South Florida’s No. 29-ranked trade partner to No. 3 thanks to gold mined in Mexico and Colombia and then whisked to the European nation. But the air escaped from that balloon over the last couple of years as the global economy, and the U.S. economy in particular, managed to convince investors that the worst was over.
In 2015, the value of gold imported into MIA — it flies rather than sails because of the desire to keep a close watch on its safe passage, given its value — fell 20.03 percent to $3.88 billion. On the export side, gold fell 48.20 percent to $1.58 billion. While those numbers affected markets like Colombia and Mexico, where it was first mined, and Switzerland, where most of it initially flew, it also affected newer sources and destinations: Peru and Bolivia on the import side and Hong Kong and the United Arab Emirates on the export side.
But, as the chart shows, MIA trade with Switzerland is up sharply in 2015. That’s after several years of sharp decline and could presage heightened insecurity about the global economy again. Stay tuned.
There is some unfettered good news in the trade data, and that is MIA’s trade with Argentina, the long-beleaguered nation that appears to be making headway in resolving its issue with investors holding the small percentage of its bonds from its 2001 default. MIA’s trade with Argentina increased $339.89 million, a 15.70 percent increase over 2014 to a record $2.50 billion in trade.
That bump in trade is positively affecting both PortMiami and Port Everglades.
This is the fourth of six columns examining South Florida’s 2015 trade with the world. The next two will focus on PortMiami and Port Everglades. The first three focused on South Florida’s overall trade, its exports and its imports, respectively.
Reach Ken Roberts, president of WorldCity, at kroberts@worldcity web.com. Twitter: @tradenumbers
For MIA, an $8.9B drop in two-way trade
Source: WorldCity analysis of U.S. Census Bureau data