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Monday, October 3,2011

Tourism and Real Estate

Continue to Dominate South Florida’s Economy

Scoring the economy can be tricky, but numbers show just how big a role real estate and finance play.

Does tourism really fuel South Florida’s economy? Yes and no.

The proportions come from the 2010 Gross Domestic Product numbers released Tuesday by the Commerce Department. The numbers measure both wages and profits earned by businesses in the industry (money-losing businesses lower their sector’s output). This includes data from Broward, Miami-Dade and Palm Beach.

Real estate holds the biggest share, then government, then wholesale trade and finance. Way down in ninth place sits hospitality, with about a 5 percent share.

That’s a misleading figure, though, since a good chunk of the region’s retail industry thrives on visitors. Combined, hospitality and retail accounted for about 15 percent of the economy. That would easily put the sector in second place. Of course, you could argue that real estate and financial services feed off each, and should be treated as one industry, too.

Either way, the numbers show South Florida remains a town pretty heavily invested in both vacationers and vacation homes.

Construction easily the worst performer in South Florida’s economy

When you break down 2011 for South Florida, the ugliest numbers show up under housing, but tourism fares better than elsewhere in the country.

We don’t need much reminding that South Florida was hit harder by the recession than the rest of the country. The latest numbers out of Washington certainly drive the point home.

On Tuesday, the Bureau of Economic Analysis issued local Gross Domestic Product numbers for metropolitan areas across the country. South Florida fared poorly, trailing the national average by almost 65 percent in terms of growth.

Economic output by the construction industry — profits and wages — are down 36 percent in South Florida since the recession began in 2007. The national numbers aren’t pretty either, off by 23 percent.
That gap, with the slower rebound among South Florida builders, may explain why this recession seems to linger longer in the tropics.


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