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Rod Thomson: Economic optimism in the trenches
Gulf Coast business leaders in industries across the region expect 2007 to be a year of healthy economic growth.
There are plenty of gloomy economic predictions in most media quarters and ivory towers. The doom of the hot real estate market was being breathlessly heralded at least two years before it actually happened - although a correction from speculative value growth is hardly gloom-worthy.
But the doom-mongering continues as high land costs, low unemployment, rapid growth and so on are cited by the economic sour pusses as indicating yet more misery is in store.
Funny thing is, the people in the trenches of everyday business decision-making, those who are planning for 2007 by putting their company's money and profits on the line, just don't see it that way. In fact, to the contrary they are almost universally optimistic about 2007 - regardless of their industry - and giddy may be only slightly overstating their anticipation for further out.
But then, it has always been the case that those who make the economy tick - that is, not those in the pontificating media and academic circles - are a positive, can-do crowd.
Listen to John Moran, president and CEO of Riverside Bank in Cape Coral: "We've had some pressure on margins for years. If you're taking care of your customers, they'll keep rewarding you with more business."
Of course they are optimistic, because they have confidence in their businesses and themselves and expect to make or break based on their abilities, not whine over circumstances beyond their control.
And they are not listening with an ear bent toward cynicism. Moran again: "What I hear from my customers is far better news than what the experts are saying."
Moran's attitude and expectations are the norm. Ian MacKechnie, president and founder of Amscot Financial in Tampa, says he has a "quiet confidence" in the economy improving in 2007.
Listen to what some of other Gulf Coast business leaders are saying about the area's economic future, and their own business plans.
"I'm rather bullish and hopeful," says Lee Arnold, CEO of Colliers Arnold in Clearwater. He is expecting a 10% to 20% growth in his company's various divisions in 2007.
"We're pretty bullish," says William Valenti, president and CEO of Florida Gulf Bank in Fort Myers.
"If we felt the economy was not doing well here, we wouldn't be putting so much emphasis on growing here," says Ken Pendery, president of First Watch in Bradenton. Half of the company's growth plans are aimed at Florida.
"Overall, I'm very optimistic," says Jerald Wallace, president of J.L. Wallace in Fort Myers. His company has a $100-million backlog of commercial projects at the moment.
"We're very bullish for 2007," says Steven Jones, chairman of T3 Communications in Fort Myers.
"We're very optimistic about the long-term future of the market," says Dennis Gilkey, president and CEO of the Bonita Bay Group.
See a theme? Bullish. Optimistic. Very optimistic. Kind of the inverse of what we read daily.
Joe Gammons has a particularly good perch from which to judge the business climate. He is the owner of Office Furniture and Design Concepts in Fort Myers, and he is planning for office furniture sales to grow 30% next year, about the same as he experienced this year.
So how did he grow 30% this year, and how does he intend to grow 30% next year, if the economy is so bad? Apparently a bunch of businesses are expanding, others are starting up and still others are moving to the Gulf Coast, and they all need office furniture.
These businesses main problem is not a soft economy or threat of recession but finding workers. The unemployment rate in this supposedly dismal economy is at its worst along the Gulf Coast in Charlotte County, which stands at a 3.2%. It is at its best in Manatee and Lee counties, where the unemployment rate is 2.5%.
However, there are indeed some clouds rolling in. But they are not economic. They are governmental.
With one hand, Gulf Coast governments are sending impact fees sky high with increases of up to 200% and removing more and more land in the name of preservation - a move which drives up land costs by creating scarcity. With the other hand, they are generating ever more intense development regulations, including requirements for affordable housing.
Federal and state government is looking to increase taxes and fees on businesses and individuals.
This, more than anything, has Andrew Greenwell worried.
"If area businesses continue to be pressured and pushed beyond reason, then they will simply relocate," says the CEO of Corporate Realty Group in Sarasota.
There is indeed a mild recession in the Midwest, where higher unemployment, cheaper land and generally fewer regulations could make it more attractive. If government keeps pushing up costs, it could force good companies out, and that would impact the economy.
And then there is the wind insurance mess, which has many businesses crying for a government solution.
That's a dangerous cry, according to people like Gary Trippe, CEO of Oswald Trippe & Co. in Fort Myers. "When you look for the government to solve your problem, you've got to be careful what you ask for," Trippe says.
As you will see reading this issue of the Review, other than the potential for government to dampen things, the Gulf Coast economy continues to expand, providing jobs and opportunities, according to those making the decisions. They are an optimistic group and play a large role in what actually happens in the economy.
So as Steve Raney, president and CEO of Raymond James Bank in St. Petersburg, puts it: "Let's temper the negativism."
Amen.
Rod Thomson can be reached at [email protected].
At a glance
Gulf Coast Unemployment
County Rate
Collier 2.9%
Lee 2.5%
Charlotte 3.2%
Sarasota 2.7%
Manatee 2.5%
Pinellas 2.9%
Hillsborough 2.8%
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