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Business Observer Friday, Oct. 17, 2014 4 years ago

Economic forecast

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Charlotte-Lee-Collier
by: Jean Gruss Contributing Writer

Gay Rebel Thompson
President, Cement Industries, Fort Myers | Construction

Company: The recovery in construction means builders need the cement products that Thompson's company produces. She expects sales in 2015 to rise on par with this year, based on the pipeline of work. “I'm expecting it to be up another 25%,” she says.

Thompson says she's hoping to see a steady flow of work rather than the boom and bust of the last decade. “To me, one of the things we're looking for is a sustained level, which is quite different from what it's been,” she says. “That's the best thing that can happen.”

Thompson says she's seen an increase in work on big residential projects such as apartments, condos and assisted-living facilities. “Everything we're working on says people,” she says.

Industry: Thompson says she expects the construction industry to continue recovering in 2015. “I've even heard someone building a hotel, and I haven't heard that in years,” she says. “There's a variety of types of construction and that's always nice to see.”

One area of concern is the cost of materials, but so far the industry has been able to pass those costs to customers. “You can't eat it or we'd be out of business,” Thompson says.

Still Thompson doesn't see a return to the go-go years of the last decade. “I don't think anyone's out there building on spec much,” she says.

Region: Thompson says she's encouraged by the fact that developers are building large apartment complexes in the Fort Myers area. “They're building for people who are coming,” she says. “The demand has to be there.”

Economic engines such as the 14,000-student Florida Gulf Coast University and the new global headquarters of car-rental giant Hertz are generating business activity. “People still pick us to move down here,” she says. Weather and affordability continue to propel Southwest Florida's economy. “It's still a less expensive place to build compared with Miami,” Thompson notes.

Jeff Hunt
President, EHC, Naples | Construction

Company: Hunt's company provides pre-construction services such as land clearing, and he's forecasting increased activity for residential development. “Almost all of our work in the latter part of this year has been associated with subdivisions,” he says. “They're all pushing for more product to sell in 2015.”

Still, Hunt says it's tough to forecast how much better business will be in 2015, though he's expecting revenue growth between 25% and 50%. “But I can't point my finger at what's going to make that true,” he says.

Counties such as Lee are considering raising taxes on new construction (so-called “impact fees”) to pre-recession levels, and labor in some areas is getting tighter. “If the counties stay off the impact fees and we get an influx of personnel, we'll be in good shape,” he says.

Industry: Hunt says the construction industry will fare better in 2015, though there is increased competition. “There's been people from the east coast sticking their toes over here,” he says.
Residential development is fueling much of the construction growth. “There's a lot of stuff on the boards,” Hunt says. “There's a lot of pent-up demand. The big developers are all being markedly more aggressive than they've been in the last four years.”

Labor is going to be a more critical issue in 2015 because many workers retrained for another career during the downturn. “They're not coming back at any wage,” Hunt says. “It's going to be even more difficult as business runs up, particularly for the building trades.”

Region: Hunt says the most promising areas for private-sector development in 2015 are in Lee and north Collier counties. Commercial development will eventually follow the residential construction, but space first has to fill up in existing buildings.

Hunt, whose company prepared the land for the new Hertz global headquarters, says he hoping more such companies relocate to Southwest Florida. Still, he's not sure when the next big corporate expansion will take place here. “Those things are held so close to the vest,” he says.

Kimberly Leach Johnson
Chair, Quarles & Brady, Naples | Law

Company: Johnson leads Quarles & Brady from her Naples office, and the national firm has grown to nearly 500 attorneys, up from about 400 when she took over as chair one year ago.

Johnson forecasts increases in certain areas of the law, including intellectual property. “Companies are investing in their intellectual property again,” she says. That's because clients are focusing on developing new products and protecting them from theft by rivals.

Another area of growth is the health care practice, where an aging population is pushing the demand for more services. Also, health care providers need attorneys to help them with regulations that govern their business as government takes a more central role in the health care system.

Industry: It's no secret that the business of law was hit hard during the recession. “The legal business hasn't really recovered,” says Johnson. She expects 2015 to be a flat year for the industry. “The demand for legal services around the country is down,” she says. Companies are hiring lawyers in-house to handle matters they used to hire out to law firms, and they're haggling on fees. “It's become more competitive,” Johnson says.

Region: Construction and health care are two areas of growth in Southwest Florida. “We have attorneys in that space and they've been busier,” she says.

While there are still properties in distress, the business of real estate is in recovery. “I think in Florida the foreclosure crisis is coming to an end,” she says. “In 2015, you'll see less of that.”

While there will be some new construction, Johnson says it's too early for big land-use changes because there's plenty of existing land already zoned. “Construction has picked up,” she says.

On the health care front, Johnson says the mergers-and-acquisition activity of recent years will continue in 2015, especially in the Tampa Bay area. In particular, Johnson noted the trend of hospitals buying doctors' practices.

Brandon Phillips
President and CEO, Global HR Research, Fort Myers | Human Resources

Company: Global HR Research conducts employee background checks for corporations, and Phillips expects a repeat of the 70% year-over-year sales growth in 2015 that the company experienced this year.

Phillips says the company's growth is coming from both new and existing clients as employment picks up nationwide. “We're seeing consistent 20% growth within our client base,” Phillips says.

But much of the growth will come from new clients. Phillips says Global HR plans to add three to five large-company clients and 30 to 50 smaller-sized clients per month.

Industry: Job creation directly impacts the human resource industry and Phillips says he's encouraged by the latest string of positive employment reports. For example, the nation's unemployment edged down to 5.9% in September following a report that payrolls increased 248,000. “Our business goes on the jobs report and the unemployment rate continues to drop,” Phillips says.

Phillips says the hiring forecast calls for steady growth through 2015. “The trend in 2014 continues through 2015,” Phillips says.

Region: Phillips says it's important for the area to continue to attract companies such as Hertz, Chico's FAS and Gartner to diversify the economy. “One of the things that we learned from 2007 is this community has got to diversify,” he says. “With four universities that are putting out a great product and the volume of students, the area needs those companies to soak up and maintain the young talent that we have here.”

When he's speaking with customers in the region, Phillips says employers' optimism is guarded. “It's much better than in previous years, but that optimism can be restrained at time because there's no certainty now. They're adding jobs, but they're not engaging on extreme changes.”

Jordi Tejero
Owner, CRS Technology Consultants, Cape Coral | Technology

Company: Tejero says helping companies move information technology to the cloud helped boost business by 25% this year, and he expects to do the same or better next year. Companies are moving applications and documents to the so-called cloud so that their employees can work remotely using any device. “We're all hair on fire at this point,” Tejero says, noting that cloud conversions now account for 75% of his technology services company's sales.

Tejero says the big challenge for his firm is finding qualified people. “Right now, I'd like to hire two or three more people,” he says.

Industry: Tejero says his peers report rising demand for technology services as companies need help to grow their businesses. “What we don't see slowing down is capital projects,” he says. Cloud conversions are dominating the technology services as storage and software licensing become less expensive.

However, finding talent is increasingly difficult. Tejero says unemployment in the technology industry is below 2%. “Next year's going to get tighter,” he says. “It's a pretty scary number.”

Region: Tejero says he is seeing strongest demand from construction firms and health care businesses. “Those are the two biggies right now,” he says. He speaks from personal experience: “My wife needed to see a specialist and she was told it would be three months,” he says.

When he speaks with customers in the region, they uniformly ask him how to find qualified employees. “They expect us to know the latest and greatest job sites to go to,” Tejero chuckles.

Still, Tejero says clients in the region are careful about planning growth in 2015 because memories of the recession are still fresh. “Everybody was stung very, very hard,” he says. “These business people have been through a lot.”

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