Why Miami, the US gateway to Latin America, is on the up
On our recent trip to Miami we found a city that is on the up. It has been bolstered by trade with Latin America. But its increasing importance is also reflected by two contrasting elements of the city: its rapidly improving transport infrastructure and growing arts scene, which we explore in greater detail here.
Miami International Airport (MIA) clearly plays an important role in the city’s appeal.
It has more scheduled non-stop cargo flights to Latin America and the Caribbean than Orlando, Houston, New Orleans, Atlanta, Tampa, and New York's Kennedy airports combined. It is also one of American Airlines’ ten busiest hubs and its completed $500 million Cargo Development Program includes 17 new cargo buildings, amounting to more than 3.5 million gross square feet.
MIA and the General Aviation Airport’s annual economic impact on Miami-Dade County is approximately $26.7 billion.
Meanwhile, Miami boasts an impressive rail network. The Metrorail is a 25-mile dual track, elevated rapid transit system, which currently uses 136 train cars. Then there is the free, mass transit, automated Metromover, a 4.4 mile electrically powered and fully automated railway which connects with Metrorail and Metrobus stations.
The Metrobus system serves all the major shopping, entertainment and cultural centres in the Miami-Dade County 365 days a year.
Our visit to Miami’s design district confirmed that there is a further component to the city emerging.
As the New York Times reported in December 2016: “Few cities have come so far and so fast as Miami in terms of creating new, year-round arts institutions”.
We think a vibrant arts scene is crucial in announcing that a city has arrived. Cultural attractions provide a further leg-up in economic consumption, as locals and visitors look to spend more time in a city, making it a destination and not just a place to do business.
Miami has many elements we look for when investing in a city. The foundations are built on the trade and infrastructure that fuels the economy.
When assessing the constituents of the Schroders Global Cities index, we see cities that are exposed largely to just one industry as potentially vulnerable to structural downturns. In Miami’s case, it has a number of strings to its bow: a strong service sector, tourism and its role as a trade hub.
But Latin America is the key to Miami, with 65% of the population speaking Spanish.
There is also a sense that Miami is maturing and shaking off its seedy image of the 1980s. The arts scene is cementing Miami as a vibrant international hub. This is a strong fillip to the already well-established financial services sector in the city.
Miami ranks high on the Schroders Global Cities index and we think it is well-positioned to continue to grow.
- Strong service sector facilitating Latin American trade
- Miami International Airport is an important hub and is gaining increased market share in the world’s cargo market.
- Improving Metrorail and Metromover system
- Burgeoning arts scene focused on the design district
- Continued draw of tourism
- Higher education is not strong as other higher ranked cities
- Traffic: Miami’s roads struggle at peak hours and the city’s traffic is ranked ninth worst in the TomTom traffic index for the US.
The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.