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Miami economy gradually recovering

By RODOLFO WINDHAUSEN, UPI Correspondent

MIAMI, Dec. 18 (UPI) -- Although more than 50 percent of businesses in the Miami-Dade area reported their level of activities was "the same or better" than in 2000, a third of a survey's respondents said there was a noticeable slowdown after the Sept. 11 terrorist attacks.

In a report prepared by two major Miami-based business organizations, The Beacon Council and the temporary staffing experts of the Manpower firm, some 2,000 companies said they were reducing personnel, cutting costs, lowering prices and increasing advertising and promotion to compensate for the economic losses caused by the attacks.

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The council, in a separate document, identified the tourism industry, airlines, international trade and transportation as the "most severely impacted sectors."

The analysis, released at a recent economic forecast meeting held here, also indicated the loss of sales "lead to a reduction in the workforce, and the area's unemployment began to rise." In October of this year, the unemployment claims rose 140 percent compared to the same period of 2000, it said.

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Paradoxically, the claims were rising when the number of jobs created was also increasing. The local economy was expected to add some 27,900 jobs through mid-September, a 2.7 percent increase.

Luis Rodriguez, a local branch manager at Manpower, said, "We are expecting negative job opportunities for the Miami area in the first quarter of 2002."

The recruiting companies, according to Manpower's survey, indicated "they were looking for sales people." The nationwide recession, which began in March, was accelerated after Sept. 11 and "has had an effect on many local companies."

Dr. Anthony Villamil, chairman of The Beacon Council's Economic Roundtable, has predicted that by the end of the second quarter or the beginning of the third quarter of 2002 Miami and its metropolitan area will begin to see a turnaround in business activity, in line with an expected recovery in the U.S. economy.

Positive growth is not expected until the last quarter of 2002, most experts said. Manuel Mencia, of Enterprise Florida, a state-supported economic development organization, called the current crisis in South Florida "possibly the most challenging since the 1980s debt crisis (in Latin America)."

Mencia and other experts remarked import and export activity in Miami-Dade got off to a fast start in 2001, but slowed in the second quarter as the U.S. economy began to crawl.

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Although no specific figures were yet available, most attendees at The Beacon Council's economic forecast meeting were in agreement the Miami area economy has suffered "a brutal blow," as one of them put it.

The economic recession in Argentina and Brazil, and the crisis in the Dominican Republic, all of them countries that have strong ties to the Miami economy, have had considerable consequences for the area.

In a special report prepared by Miami Business magazine, experts indicated that "perhaps the biggest worry is Argentina's campaign to restructure its foreign debt," which has left many institutional investors worried about its ability to avoid a major debt default.

Similarly, problems in the tourist-dependent economies of the Caribbean have impacted the Miami-Dade trade sector, according to the publication.

"Fewer U.S. tourists in the islands means fewer orders for food, beverages and other goods to be filled by suppliers in South Florida and carried by shipping lines" operating those routes, the report said.

As a reflection of the overall problem, consumer confidence in Miami-Dade also fell. Preliminary October and November department store sales data reflected a slowdown compared to the same period of last year.

Weakness in the fourth quarter of 2001 consumer spending is expected, and taxable retail sales for the year are likely to remain about the same as in 2000, to the tune of $30 billion.

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