Forecast unclear for South Florida

Trade is key component

South Florida would likely get a boost from infrastructure spending and lower corporate taxes, under the new Trump administration. But it also faces risks related to international trade, according to a new economic forecast by Mekael Teshome, Florida economist for PNC Bank.

Average hourly earnings in South Florida will rise more quickly in 2017 due to a more favorable mix of jobs as the labor market tightens, and gains in the stock market and higher bond yields will support investment income, Teshome said.

But South Florida is growing more slowly than other large metro economies in Florida, due to its international business and investment ties.

A stronger dollar could weigh on trade, international tourism and investment. And immigration reforms that shrink the labor supply or create adversarial trade relationships could weaken the region’s economy, he said.

“Nearly two-thirds of Florida’s exports go through South Florida, making it exceptionally vulnerable to international risks,” Teshome said.

Teshome said South Florida’s economy lost some speed in the final months of 2016, but the region remains above average in growth, boosted by the U.S. economy’s expansion. Population growth is driving demand, while jobs and income growth nationwide are lifting tourism and consumer spending. The demographics should sustain home sales, diminish the large inventory of foreclosed properties and boost home-building, he said.