Transcript Miami-Dade County Public School System Capital Investment

The Florida Economic Environment:
Outlook for Retail Sales
Tony Villamil
The Washington Economics Group, Inc. (WEG)
Florida Retail Federation
Annual Meeting
The Shores Resort
Daytona Beach, Florida
November 12-14, 2007
Economic Growth Drivers of the
Economy of Florida: A Framework
Florida Economic Growth
Driven by:
• State’s Business Climate
• US Economy & Financial
Markets Developments
• Global Economy & Financial
Markets Developments
2008 Florida Outlook
Tendency
Business Climate

US Econ/Fin Markets

Global Economy

US Economic Driver of Florida
Indicator
2004
2005
2006
2007E
2008F
RiskF
1. Economic Growth
( % Real GDP)
3.6
3.1
2.9
2.8
2.0

2. Inflation
( % Core CPI/U)
2.2
2.2
2.6
2.3
1.5

3. Exports ($ Billion)
1,157
1,283
1,445
1,545
1,700

4. Imports ($ Billion)
1,769
1,997
2,204
2,250
2,300

5.5
5.1
4.6
4.5
5.0-5.5

5. Unemployment Rate
(%)
Source: BEA, BLS, The Washington Economics Group, Estimates, Forecast.
E= Estimate
F= Forecast Risk
Global Economic Driver of Florida
( GDP, %)
Region/Country
2005
2006
Developed Economies
Euro Area
Japan
U.K.
1.5
1.9
1.8
Emerging Countries
China
India
Latin American Region
Brazil
Mexico
Projections
2007
2008
2.8
2.2
2.8
2.6
2.7
3.0
2.5
2.0
2.5
10.4
9.0
11.1
10.0
11.0
9.0
10.0
8.0
3.0
2.8
3.7
4.8
4.4
3.0
5.0
2.0
Source: IMF, July 2007 Outlook and The Washington Economics Group, Estimates for 2007-2008.
What Do US/Global/Business Climate
Drivers Imply for Florida?
Indicator
2004
2005
20072008
2006
Gross State Product (GSP) ($ Billions)
607.2
666.6
713.5
Slower
Personal Income (PI) ($ Billions)
565.0
604.1
647.6
Slower
Per Capita Personal Income ($)
32,534
34,001
35,798
Flat
7,510,100
7,799,900
8,007,100
4.7
3.8
3.3
Up
Florida Exports ($ Billions)
37.5
44.1
52.3
Double
Digits (+)
Florida Imports ($ Billions)
43.8
51.1
57.4
Modest
Slowing
80
84
85*
Moderate
(+)
Non-Agricultural Employment
Unemployment Rate (%)
Total Visitors (Millions)
Slower
Sources: Enterprise Florida, Inc., Labor Market Statistics and Visit Florida 2006 - *Preliminary.
From the Macro Florida Economy to
Indicators of Retail Sales
Florida Consumer Confidence Index: Reflects
Concerns on the Economic Outlook for 2008
Florida Consumer Confidence Index
1966=100
100
95
96
90
89
90
89
85
80
80
75
2003
2004
2005
2006
2007*
Source: University of Florida BEBR.
Data is based on December observations of each year. *2007 is based on November data.
$ Crude Oil/Barrel: Higher Gas Prices
Likely to Follow
$100.00
$94.07
$90.00
$80.00
$70.00
$60.00
$49.42
$50.00
$36.83
$40.00
$30.00
$56.13
$27.23
$24.27
$20.00
2002
2003
2004
2005
2006
2007*
Source: Energy Information Administration and 2007.
Data is based on December observations of each year. *2007 is based on Future December Price as of 11/12/07
closing.
Florida Single-Family Median Home
Prices: The “Net Wealth” Effect
$260,000
$248,300
Median Sales Prices
$240,000
$235,885
$235,200
$220,000
$200,000
$182,400
$180,000
$160,000
$155,800
$140,000
$120,000
2003
2004
2005
2006
Source: Florida Association of Realtors and 2007 WEG Estimates.
2007E
Florida Unemployment Rate: Still
Satisfactory, but Trend is Up
5.5%
5.0%
4.9%
4.5%
4.5%
4.6%
4.0%
4.0%
3.5%
3.3%
3.0%
2.5%
2003
2004
2005
2006
2007
Source: Bureau of Labor Statistics and Florida Labor Market Statistics.
Data is based on December observation of each year. *2007 is based on October data.
Slowdown in Florida Taxable Sales in 2007
is from High-Activity Levels:
Reflecting a More Subdued Economic Environment
and “No Hurricanes”
Florida Taxable Sales*
$29.0
$27.8
$27.0
$25.9
$ Billions
$25.0
$23.0
$21.0
$19.0
$21.0
$20.9
$21.7
$25.7
$22.6
$19.8
$17.0
$15.0
2000
2001
2002
2003
2004
Source: Florida Economic & Demographic Research Database.
*August of each year.
2005
2006
2007
Florida Total Retail Sales
$281.0
$290.0
$270.0
$270.0
$261.1
2001
3.2
2002
3.3
2003
4.6
2004
9.7
2005
8.2
$170.0
2006
7.0
$150.0
2007
3.0
2008
4.0
$244.0
$250.0
$ Billions
% Change
Total Retail Sales
$225.6
$230.0
$205.7
$210.0
$190.0
$184.5
2000
$190.4
2001
$196.6
2002
2003
2004
2005
2006
2007
Source: UCF, Sept 2007 Forecast and WEG Estimates for 2007-2008.
2008
Outlook for Corporate Activities in Florida
Strong
 Global Economic Driver
 Trade, goods and services (global merchandising)
 Financial – international private banking, Foreign Direct
Investment
 International visitors, conferences and conventions
 Cluster Development (the New Florida) – the “poles” of growth






Life Sciences
Telecommunications
Logistics
Aviation
Fashion and Entertainment
Environmental Technologies
 Commercial real estate/public construction
Outlook for Corporate Activities in
Florida (cont.)
Soft
 Consumer-related spending


Retail sales (auto dealers, furniture,
appliances): “big ticket”
Population-driven retail sales
 Residential-fixed investment (multifamily)
 Real estate-related manufacturing and
services
 State and local government spending (watch
clients with heavy dependence on public
contracts)
Concluding Observations
 “The best of times (opportunities) and the worst of times
(risks)”
 Fluid and uncertain outlook: a no-nonsense approach to
business based on:
1. Core competencies
2. “Smart” expense management
3. Credit quality
4. Emphasis on marketing mix for “thinner consumer wallet”
 Property tax issues are far from resolved (business
climate)


Monitor/input Taxing and budget reform commission
Income method for business property? Caps on local spending?
 Property insurance


“No hurricanes” and market-based solutions
Current approach relies too heavily on State (taxpayers) and
…..luck!