STATE FOCUS: Florida – Let The Sun Shine
By Dominique Cantelme
From the July/August 2013 issue
It looks like Florida may see more than just the sun shining in the next four years. According to the Florida & Metro Forecast 2013–2016, published in April by the Institute for Economic Competitiveness (College of Business Administration, University of Central Florida), Florida’s economic future also looks bright.
The report indicated that the state’s housing market is improving while at the same time aiding in the restoration of wealth and triggering job creation in the construction sector. And that “Upwardly revised payroll job growth year-over-year should average just 1.8 percent in 2012, 1.6 percent in 2013, 2.5 percent in 2014, 2.8 percent in 2015 and 2.4 percent in 2016. It will be the first quarter of 2016 before payrolls recover to their pre-recession levels.”
The prediction is that Florida’s unemployment rate (7.2 percent as of April 2013) will decrease slowly and reach 6.0 percent by the end of 2016. “Sectors expected to have the strongest average growth during 2013-2016 are Construction (6.1 percent); Professional and Business Services (5.6 percent); Trade, Transportation & Utilities (3.0 percent); Education & Health Services (2.4 percent); and Information (1.7 percent).”
And after increasing 4.6 percent in 2012, retail sales will grow at an average pace of 3.7 percent during 2013 to 2016. This is due in part to the fact that economic recovery in Florida is feeding into retail sales. With more confidence in the economy comes more discretionary spending by consumers in general.
Manufacturing could soon be seeing a jump as well since Florida Gov. Rick Scott signed a bill into law that will eliminate sales tax on the purchase of manufacturing equipment starting April 30, 2014. These incentives will make Florida more competitive in attracting manufacturing companies and expanding the industry in the state.
The new law will eliminate the current requirement to meet a production increase threshold as a condition of receiving the exemption, which will broaden its scope and allow more manufacturers to qualify. This law also applies to manufacturers in a wide range of subsectors. Florida has several other sales/use tax exemptions that are beneficial to manufacturers, including exemptions for parts and labor to repair manufacturing equipment, for electric and steam energy used to power manufacturing equipment, for boiler fuels used to power manufacturing equipment and for equipment used predominately in research and development.
The Florida and Metro Forecast 2013–2016 says that the Real Gross State Product (RGSP), now known as State GDP, which is the state-level analogue to Real GDP at the national level, will expand only 1.8 percent in 2013, but it also says that RGSP will “accelerate to 3.3 percent in 2014 and 4.1 percent in 2015 before easing to 3.4 percent in 2016. Average growth will be 3.2 percent during 2013-2016 compared to average growth of -0.6 percent over the preceding four years.”
Nominal Gross State Product (i.e., the figure has not been adjusted for inflation) is anticipated to reach $948 billion in 2016. “The state will cross the trillion dollar threshold for nominal GSP in 2017. Florida’s economy, as measured by GSP, will have grown tenfold in size from 1980 to 2017.”
Favorable demographics will persist in helping to fuel economic growth as Florida’s population expands, hitting 1.7 percent by 2016—the fastest rate since 2006. International trade, tourism, healthcare and efforts to invest in and diversify the state’s economic base in life sciences also will “… broaden the economic base of the state and provide additional sources of economic growth, helping to push the economy forward for decades.”
The Florida and Metro Forecast 2013– 2016 sees Florida’s economy poised “…to break away from the lackluster U.S. economic recovery.” As the institute predicted in its December 2012 forecast, “… 2013 is shaping up to be the crossover year when Florida goes from lagging the national recovery to outperforming it.”
FLORIDA HAS THE PERFECT CLIMATE FOR GROWING NEW BUSINESS
For years, the name Florida has been firmly associated with travel and tourism, and the state has enjoyed one of the world’s best known leisure brands. Now, Florida’s leaders are committed to expanding upon that foundation by making sure the business community knows that Florida is open for business. And, they have the goods to back it up.
As the 4th largest economy in the U.S. with a highly skilled workforce of 9 million, Florida is an economic super state. In fact, Florida’s $777 billion GDP ranks higher than that of Switzerland, Saudi Arabia and Argentina. Florida ranks 3rd in the U.S. for the number of high-tech companies, with nearly 26,000 high-tech businesses calling the state home, and also ranks 3rd in the nation for high tech exports. Ranked 5th in the nation for high-tech employment by TechAmerica’s Cyberstates report, Florida boasts more than 270,000 high-tech workers.
RECENT MAJOR FLORIDA PROJECT ANNOUNCEMENTS
|Navy Federal Credit Union||1,500 jobs|
|Northrop Grumman||1,000+ jobs|
|Bristol-Myers Squibb||579 jobs|
|L-3 Crestview Aerospace||340 jobs|
|Deutsche Bank||300 jobs|
|Depository Trust & Clearing Corporation (DTCC)||255 jobs|
|Pratt & Whitney||230 jobs|
Florida’s population tops over 19 million, with four metropolitan areas that have more than 1 million residents—even more than New York. Florida’s infrastructure, talent and business tax policies continually ranked among the nation’s best. And yes, Florida is still a tourism powerhouse with 90 million visitors spending some $70 billion in the state each year. The net result is that Florida is a huge market with huge opportunities.
Today, after 35 consecutive months of positive annual job growth and a string of major project announcements, Florida’s economy is solidly on track for growth. More than 330,000 new private sector jobs have been created in the state since December 2010, and the unemployment rate is now below the national average.
Over the past year, Florida has scored major project wins across virtually all of its industries. For example, just three large aircraft assembly projects will bring over 1,500 new jobs to Florida’s aerospace industry—which is already the second largest among states. Florida’s thriving financial and professional services industry is getting a boost from Navy Federal Credit Union, Verizon, Deutsche Bank and DTCC. And, Florida’s pharmaceutical and medical device industries—both already among the top three in the nation—will soon add Bristol-Myers Squibb and enjoy the expansion of generics leader, Actavis, and orthopedic device manufacturer, Arthrex. Other areas seeing significant activity include headquarters, logistics and manufacturing.
So what’s driving Florida’s recent success? In addition to strong economic and demographic fundamentals, from Florida Gov. Rick Scott all the way to the local government level, Florida is focused like never before on helping businesses succeed.
Since taking office in 2011, Governor Scott has moved aggressively to cut business taxes and costs, pay down debt and streamline the regulatory environment. Over the last two years, Florida has eliminated thousands of regulations on job creators and removed corporate income taxes for thousands of small businesses. A newly signed law will create a sales tax exemption for manufacturers purchasing machinery and equipment beginning in April 2014. These efforts have helped make Florida the ultimate place for business to grow and flourish.
With 15 deepwater seaports; 19 commercial airports; nearly 3,000 miles of freight rail track; 12,000 miles of highway; and even two spaceports, Florida has an unmatched ability to get people and products anywhere they need to go. In fact, Florida’s infrastructure is ranked #1 in America.
In a state that is consistently ranked as one of the nation’s top global trade hubs—in terms of trade flows, cargo volumes, export value and employment—Florida’s leaders have made continued improvements to major trade and transportation systems a top priority. Over the last three years, Florida has invested $421 million in its ports to take advantage of the benefits of trade with Central and South America, and to prepare the state for the expansion of the Panama Canal and the potential for increased trade with Asia.
As one of the largest states in the nation, Florida offers a large and talented pool of workers to employers. Its labor force also is more affordable compared to other competitive high-tech states, thanks to a favorable tax structure and a lower cost of living. In addition, Florida’s professionals are more culturally and linguistically diverse—upward of 5 million Floridians speak a foreign language—providing a competitive advantage to employers in the global marketplace. Thanks to a network of 12 public universities; 28 state colleges; 31 independent colleges and universities; and 1000+ public/private postsecondary, technical and trade schools, the talent pool is also deep in workers with the specialized skills needed by today’s employers.
Chief Executive magazine now ranks Florida the #2 best state for business. The Tax Foundation names Florida the #1 business tax climate in the Southeast. Consider that the state also has the country’s 3rd lowest unionization rate and it’s clear that Florida offers a tremendous value for businesses looking for world-class amenities at a reasonable cost. Florida is the perfect climate for business. Visit perfectbusinessclimate.com.
GREATER FORT LAUDERDALE: DELIVERING SATISFACTION ALL AROUND
Three international airports, three major seaports, seven executive airports and 40 colleges and universities as well as 23 miles of beaches, 300 miles of waterways, 40 golf courses and average yearly temperatures of 82°F are only some of the reasons to relocate to the Greater Fort Lauderdale area. People can also enjoy “Life. Less Taxing” since there is no state income tax. As longtime Fort Lauderdale resident Wayne Huizenga says, “It’s not what you make, it’s what you keep!” The cost competitive attributes of Florida’s tax structure for both businesses and individuals have long been attested to by the Tax Foundation, always a key point for consideration, especially for the attraction and retention of key employees.
Located in the center of Florida’s largest metropolitan area with over 150 corporate and international regional headquarters already enjoying the benefits of a Greater Fort Lauderdale location—including such notable names as AutoNation, Citrix, DHL Americas, Elizabeth Arden, Embraer, Heico, Huizenga Holdings, Kaplan Higher Education, Mako Surgical, Marriott International, Microsoft, Nipro Diagnostics and Seacor—all the requisite support services and infrastructure are in place to ensure success. Visit the headquarters website link at www.lesstaxing.com to view the short video on why so many companies have relocated their headquarters to Greater Fort Lauderdale. The recent announcements of several major corporate and international regional headquarter projects in the Greater Fort Lauderdale area by Altadis USA, Anthem Education, Astor & Black, Emerson, E-Builder, Private Jet Charter and the Wendy’s Company help provide further “real world” confirmation of the area’s business benefits.
“The cost efficiencies achieved by consolidating our regional headquarters in Sunrise [Florida] have been significant, and the ability to take advantage of direct air travel, proximity to a large number of Latin America-related companies and branch offices, enhanced collaboration among our businesses and the availability of a large multilingual labor force made Sunrise a logical choice for our Latin America regional headquarters,” said Alex Blochtein, president of Emerson Network Power, Latin America.
Greater Fort Lauderdale’s domestic and international air infrastructure is robust and is anchored by the Fort Lauderdale/Hollywood International Airport (FLL), the 21st busiest in the nation. A new $790 million South Runway is scheduled to open in 2014, providing the Airport with two parallel commercial runways that will reduce delays and increase capacity by approximately 50 percent, accommodating around 450,000 landings and takeoffs annually. Low-cost domestic carriers such as JetBlue, US Airways, Southwest and Spirit Airlines provide daily flight service through FLL, and close proximity of the Miami International Airport provides additional options.
Port Everglades is Florida’s leading container cargo and major cruise port. Home to the world’s two largest cruise ships—the Oasis of the Seas and the Allure of the Seas—it is in the midst of $72.8 million intermodal yard improvements and $54 million cruise terminal renovations to further enhance capability. According to the 73rd Annual Report released by the Foreign-Trade Zones Board to the U.S. Congress in January 2013, Port Everglades was ranked the top exporting FTZ in the country for warehousing and distribution activity in 2011. Its FTZ No. 25 experienced a 68 percent increase in merchandise received during 2011, while exports from the Zone increased by 66 percent over the previous year. In 2011, merchandise received and exported from the Zone reached $3.7 billion and $3.6 billion, respectively.
“Our proximity to South America, Central America and the Caribbean makes it efficient to transport goods through our seaports and airports and re-export merchandise admitted to the Zone to these and other markets,” said Michael Vanderbeek, Port Everglades Director of Business Development.
FTZ No. 25 serves 75 businesses in its General-purpose Zone and supports over 500 direct jobs in the local economy at 14 locations within Broward County. It currently has five Special-purpose Sub-zones at Port Everglades. “The FTZ at Port Everglades already leads the state of Florida in meeting the goals of President Obama’s and the Federal Government’s National Export Initiative (NEI) to double the nation’s exports,” said Steven Cernak, Chief Executive & Port Director for Port Everglades. “We’re happy to be recognized as now leading the country in FTZ exports as well.”
The area’s housing affordability for both single family homes and condominiums has improved dramatically from August 2007, and the large South American and Brazilian populations that live in Greater Fort Lauderdale provide a substantial multilingual base of Portuguese and Spanish speaking employees to serve those markets as well as the United States and North America.
Greater Fort Lauderdale’s higher education is anchored by the nation’s 9th largest not for profit independent university—Nova Southeastern University (NSU)—which is comprised of more than 26,000 students; 152,000 alumni; and Chancellor Ray Ferrero, Jr. who serves as the Founding Chairman of the CEO Council. NSU is home to the H. Wayne Huizenga School of Business and Entrepreneurship, one of the top business schools in the U.S. with Florida’s top MBA program, strong curriculums at both the graduate and undergraduate level and the only college of business with “Entrepreneurship” in its name. Broward College is ranked in the top 10 percent of community colleges in the U.S. by the prestigious Washington, D.C.-based Aspen Institute. The services of Workforce One Employment Solutions are also available to provide recruitment assistance for key positions as well as coordination of training for new employees.