What a difference a recession makes.
Just a few months back, Barry Connor’s horizon only went as far as Jacksonville, Miami and Tampa Bay, including Sarasota. As the executive vice president of Naples-based Boran Craig Barber and Engel Construction Co. (BCBE), Connor oversaw high-rise construction from the condo-hotel at The Ritz-Carlton, Sarasota to the One Bal Harbour condo high-rise in Miami Beach.
Now, after spending a game-changing three days in April at Expo Build China 2010 in Shanghai, Connor’s horizon has expanded to Shanghai, Seoul and Dubai. BCBE’s booth—the only one of a U.S. general contractor at the bustling trade show—paid off quickly: BCBE got what Connor calls four “solid” leads, and is in the early negotiating stages of becoming a general contractor for high-rise construction in Shanghai.
“In our local Florida climate, contracts are far and few between,” says Connor. “But there’s a lot going on in the world; there’s a job for everyone.”
These expanding horizons are great news for the Southwest Florida economy. According to the U.S. Department of Commerce, companies that export grow 15 percent faster, are 12 percent to 15 percent more profitable, are much less vulnerable to domestic downturns, more insulated from domestic competition, and in Florida—according to the Florida Business Roundtable—they pay 18 percent higher wages, too.
For these reasons, the Florida Chamber and other business leaders recently announced a campaign to double state exports in the next five years. “We’re never going back to the economy we used to have,” says Florida Chamber CEO Mark Wilson, referring to Florida’s reliance on agriculture, construction and tourism.
“Exports are good for the company, employees and the community,” says Manny Mencia, the head of export promotion for Enterprise Florida, who spoke to businesspeople in Sarasota this spring.
Right place, right time
Florida companies are perfectly suited to venture out to the world.
“If you look at Florida, trade is our destiny,” says Mencia. “Communities that get it will be more successful in the long run. Florida is a peninsula, far from the big markets of the United States, and we used to see that as a competitive disadvantage. But juxtapose that with the picture of Florida as an international business center. We’re in a perfect location for North-South trade; we’re also well located for East-West flows. God did well with us. We are close to the Panama Canal, and we have great infrastructure—14 deepwater ports, great international airports. And we have a large multicultural population.”
Pair the current boom and long-term growth forecasts for developing markets such as China or Brazil with a weak U.S. dollar, and you get the perfect combination for recession-plagued Gulf Coast companies to seek relief.
Still, exports have not escaped the impact of the recession. Florida exports dropped 18 percent last year. The prospects of trade recovery are complicated by rising protectionism and more limited access to trade financing, according to the International Chamber of Commerce. Even so, the world (particularly developing nations) is re-emerging from the crisis, and so will Florida’s export figures, Mencia believes. He points out that Florida’s exports went up in the last quarter of 2009, and were up 13.7 percent in January.
Global reach, local success
That Southwest Florida has real potential in this arena has yet to be recognized by local business. Part of the reason is that much of the attention, especially during the boom years, focused on hot local companies that lived off real estate, such as window manufacturer PGT Industries.
But now the Venice-based company—Sarasota County’s largest manufacturing employer—is taking advantage of Enterprise Florida’s and the U.S. Department of Commerce’s export promotion channels (see “Logistical Help”, page 29). When construction dried up in the U.S. Southeast—practically the company’s only market—PGT teetered on the edge for a few months in late 2008 and much of 2009. That painful all-eggs-in-one-basket lesson wasn’t lost on management.
Over the past two years, the company has participated in Enterprise Florida trade missions to Costa Rica, Panama, Mexico and Saudi Arabia to hook up with regional distributors. Next on the agenda is a trade mission to the Dominican Republic.
“All of this started with the Economic Development Corporation in Sarasota; they put us in touch with all these trade missions,” says Debbie LaPinska, vice president of sales and marketing for the company.
PGT isn’t yet where it would like to be. Overall, exports generate 5 percent of the company’s revenues. “We would like to have 10 to 15 percent,” LaPinska says. “That’s going to take us at least three years to build.”
Although Saudi Arabia looks promising, PGT’s focus is on what has been the biggest magnet for Florida products: Latin America and the Caribbean.
According to U.S. Department of Commerce statistics, these regions took in 73.1 percent of all merchandise exports from Florida in 2009. When you add Mexico—which tends to fall through the statistical cracks because much of our exports get there by truck or train, and not through ports where the merchandise is statistically counted—you can estimate that four-fifths of the Sunshine State’s exports go to Latin America and the Caribbean.
Most of Florida’s exports come from Miami, Tampa, Orlando and Jacksonville. But quietly, Southwest Florida has emerged as a dynamic player. In 2006-2008, the most recent years for localized export statistics, Southwest Florida was among the fastest-growing export areas in Florida, surpassing those other cities.
The Sarasota-Bradenton-Venice MSA grew its merchandise exports by 61.2 percent to $740 million a year in the three-year period, moving up from No. 7 to the No. 6 spot on the Florida list (see chart: “Merchandise Exports”, page 28).
Naples-Marco Island’s exports grew by 78.1 percent to $324.4 million, now ranking No. 10. Fort Myers-Cape Coral grew its merchandise exports 66.2 percent to $282.2 million. In comparison, Miami grew its exports 42.2 percent, Tampa 50.1 percent, Orlando 36.9 percent, and Jacksonville 36.5 percent.
Computers, cattle and consulting
What do we export? No surprise here: In Sarasota-Bradenton, Fort Myers and Naples, a lot falls under the category of capital goods. (Florida’s manufacturers rank third nationwide, behind Washington state and Delaware, when measuring locally manufactured goods shipped abroad.)
Accordingly, Southwest Florida’s biggest exports are machinery and transportation equipment, followed by computers and electronic equipment. This is complemented by consumer goods, such as appliances and plastic and rubber products. Industrial equipment manufacturer Sun Hydraulics in Sarasota and business IT equipment maker Teltronics Inc. in Manatee County are two examples.
However, within the little-known exporter community here, Southwest Florida’s least recognized group is agricultural exporters. The region is home to giants Alico Corp. and Barron Collier Cos., much of whose citrus, tomato and bell pepper production ends up abroad, and smaller global players such as Naples-based cattle broker J.P. Wright & Co., and Manatee County cattle ranchers Jim and Renee Strickland, who send Florida cattle to places such as Cuba, Guyana and Costa Rica.
But some of the most dynamic companies, many of them international consultants, don’t appear in any export statistic. According to Enterprise Florida’s Mencia, some $28 billion worth of service exports must be added to Florida’s $47 billion in origin merchandise exports.
Along the Gulf Coast there are dozens, perhaps hundreds of companies that sell their services abroad. Consider Ned Davis Research Group in Venice, a financial markets number cruncher, many of whose clients are abroad; or Michael O’Malley’s Asian Medical Inc., a consulting firm with a two-person outfit in Sarasota and two more employees in Singapore and Qatar; or Bradenton-based MyUSA.com, a package-forwarding company that offers its services to individuals in Britain, Australia, Turkey, Saudi Arabia, South Africa, Canada and nearly 200 additional countries around the globe, and has millions of dollars in revenues.
Betting on Brazil
These days, Sarasota-Manatee is taking trade more seriously, and economic development officials point to Port Manatee’s expansion of container facilities, an agreement with Panama, an Enterprise Florida trade mission there this fall that is jointly supported by Sarasota and Manatee EDCs, and Sarasota-Bradenton International Airport’s renewed efforts to land transatlantic and Canadian flights as evidence of interest and potential.
Brazil could also emerge as an important market. Construction in Brazil, which just upped its GDP growth forecast from 5 percent to 6 percent, will be hot, especially with the upcoming Soccer World Cup and Olympic Games in Rio.
Says Mencia: “I call Brazil Florida’s China. For us, the key market is Brazil. It’s our No. 1 export market, by a significant margin, and Brazil will be one of the growth economies in the world in the next decade.” ■
Top Sarasota-Bradenton Exports, by Product (in million$)
Transportation Equipment 57.7 103.5 101.1 +75.2
Machinery, Except Electrical 56.3 79.9 98.6 +75.1
Fabricated Metal Products 52 67.8 96.8 +86.2
Computer & Electronic Products 69.7 57.7 71.8 +3
Total 458.9 630.8 740 +61.2
Source: U.S. Dept. of Commerce/ITA
2006 2007 2008 % change 06/08
Merchandise Exports by Florida Metro Area (in million$)
Miami-Fort Lauderdale- 23,491.3 26,197.4 33,411.5 +42.2
Tampa-St. Petersburg- 4,738.5 5,711.2 7,153.5 +50.1
3. Orlando-Kissimmee 2,474.3 3,045.1 3,388 +36.9
4. Jacksonville 1,445.9 1,709.3 1,973.5 +36.5
Titusville 720.6 764.7 782.6 +8.6
Venice 458.9 630.8 740 +61.2
7. Lakeland 393.4 571.7 695.2 +76.7
Pensacola-Ferry 466.6 535.8 567.7 +21.7
9. Panama City-Lynn Haven 108.3 183.2 390.9 +260.9
10. Naples-Marco Island 182.1 256.5 324.4 +78.1
11. Deltona-Daytona Beach 267.6 273 288.5 +7.8
12. Gainesville 191.5 227.5 285.5 +49.1
13. Cape Coral-Fort Myers 170.1 198.3 282.8 +66.3
14. Port St. Lucie-Fort Pierce 228.1 258.8 271.7 +19.1
15. Sebastian-Vero Beach 127.5 175.1 256 +100.8
16. Ocala 130.9 155.2 177.7 +35.7
Fort Walton Beach- 139.4 169.3 135 -3.1
18. Tallahassee 61.7 86.7 119.1 +93
19. Palm Coast 25.8 47.3 48 +86
20. Punta Gorda 28.2 33.5 28.3 +0.4
Source: U.S. Dept. of Commerce/ITA
2006 2007 2008
There are plenty of “door openers” for your business abroad on local, regional, state and federal levels.
The economic attachés in U.S. embassies throughout the world, coordinated by the U.S. Department of Commerce (commerce.gov), can connect you with the right people and companies in their respective countries. The Florida District Export Council (floridaexporter.com)—the DoC’s stateside arm—and its Tampa Bay Export Assistance Center (trade.gov/cs) will steer you to the right people in Washington.
The most dynamic support for stateside companies, though, comes from Enterprise Florida (eflorida.com), whose offices in Tampa and Coral Gables will assist Southwest Florida exporters. The public-private institution’s primary export services include providing trade leads and financing for small companies, export sales missions, participation in trade shows, and high-level, high-visibility Team Florida missions that are usually led by the governor.
Upcoming Enterprise Florida trade missions to Haiti and Chile, which have been devastated by earthquakes, should be particularly interesting for construction-related companies.
The counties’ economic development councils in Southwest Florida will help and also steer you towards state and federal programs in cooperation with local ports and airports.
Last but not least, there are regional organizations, both public and private. Some have a limited focus, such as the Tampa-Panama Business Council (tampapanama.com/news).
Others, such as the Tampa Bay Partnership 9 (tampabay.org), the Gulf Coast Latin Chamber of Commerce (latinchamber.org), or the World Trade Center Tampa Bay (wtctampa.com), can provide an array of services.