Forecast 2012: Lee-Collier

Bert Hamilton, Harvey Software
Fort Myers
Region: Bert Hamilton, president and CEO of Harvey Software, says the region could attract more software companies and boost the region's fortunes if government was more receptive to the industry's needs. “They keep thinking that the only way you get people to come is to hand them money,” Hamilton says. Instead, local government should help foster business incubators, speed up the permitting process and make lifestyle improvements, such as bicycle paths. “We need to stop harassing companies,” he says. Hamilton says area universities ought to be boosting the number of graduates with software-engineering degrees, not more Web designers. “I have to hire out of the area,” Hamilton laments.

Industry: Harvey Software helps retailers find the most efficient ways to ship their goods. “I'm hearing two camps,” he says. Companies that sell necessities for less money are
doing well, while others are expecting flat sales. “I don't look forward going into an election year because it's brutal on business,” says Hamilton.

Business: Hamilton recently hired two executives from UPS and FedEx to lead the company's marketing efforts with partners who help struggling retailers improve operations. In July, Harvey Software reached what it had done in sales the entire previous year. “It's not letting up,” says Hamilton. “We're helping companies survive the downturn.”

Gary Griffin, B&I Contractors
Fort Myers
Region: The Gulf Coast will likely continue to wrestle with vacant residential and commercial buildings into next year, though the Tampa Bay area appears to be recovering faster than areas further south because of its more diverse economy, says Gary Griffin, president of B&I Contractors. Griffin says federal stimulus dollars will dwindle next year, though industries such as health care will continue to spend on facilities. “There are some bright signs, but for every bright sign there's a challenge,” says Griffin. The lack of bank financing is hampering growth. “It's holding up a lot of projects,” he says.

Industry: Further consolidation in the construction trades is unlikely because not many new buildings will be built as long as there's an oversupply. “There's not a strong enough up cycle that can be identified to give confidence,” Griffin says. Some of the weaker companies likely will fail instead of being acquired.

Business: Griffin's company, which specializes in air conditioning, electrical and plumbing systems in commercial buildings, says there are opportunities to grow the service part of the business. Buildings have to be maintained and companies are moving to existing buildings that need renovations. “The second part is the push to go green,” says Griffin. Utilities and government are providing incentives for businesses to retrofit buildings with energy efficient systems. Still, Griffin is forecasting flat sales and revenue. “We see opportunity, but it's related less to the construction market and more to the attrition of our competition,” he says.

Fred Edman, Wright Construction Group
Fort Myers
Region: Fred Edman, president of Wright Construction Group, says the Tampa Bay region has a head start on the recovery compared with areas further south such as Lee and Collier counties. However, he's encouraged by discussions of regional cooperation in the Fort Myers-Naples area. “It's essential,” says Edman, who is involved with the regional Chamber of Southwest Florida. “I don't think they have any choice but to do that.” Companies such as technology consulting firm Gartner and medical-device manufacturer Arthrex are building new facilities in the area. “Those are the little bright spots that the region wants to hang onto,” Edman says.

Industry: With a glut of commercial real estate space on the market, it's unlikely 2012 will see any significant new construction. “You're going to continue to see some shrinking among general contractors,” says Edman. Smaller firms that don't have the wherewithal to continue in business for the next two years will likely disappear. Large firms now compete for projects of all sizes and have a financial advantage of scale. “The competition for the smaller commercial projects is incredible,” Edman says.

Business: Edman says school districts and municipalities will continue to cut construction budgets next year. “It's going to continue to stay flat at least for another one to two years,” he says. However, Florida road building will continue apace. “We're doing a lot of work for the FDOT [Florida Department of Transportation],” Edman says. “Most of what we're doing is bridge repair and renovation work.” Successful commercial builders like Wright will find work despite the downturn. “It's important for contractors to identify niche markets where they can focus their energies in areas that are not getting as much competition,” Edman says. Understandably, Edman won't disclose what areas he's scouting for competitive reasons. “You have to look for those,” he says.

David Fry, WCI Communities
Bonita Springs
Region: “The big issue for Florida is the jobs situation,” says David Fry, president and CEO of WCI Communities. “The expectation is that the job situation will continue to improve, but not in a material way,” he says. The European financial crisis may translate to fewer international customers, and the large inventory of foreclosed homes continues to weigh heavily. Still, Fry is encouraged by the fact that politicians are now focused on helping businesses expand in Florida. “I do feel there is a sincere effort,” he says.

Industry: Homebuilding remains weak. “There is very little optimism,” says Fry. “The one good thing is that we don't think house prices will get much lower.” However, Fry says there are pockets of strength in cities such as Tampa where job growth has picked up again. Another encouraging sign is that some executives with national homebuilding companies are starting their own firms, suggesting they see new opportunities as entrepreneurs.

Business: The residential development company emerged from bankruptcy reorganization in fall 2009, and it's now selling homes in seven communities. WCI plans to open another two communities next year and projects 350 home sales, up from 250 sales this year. “If we do 350 sales, I'll be very satisfied,” says Fry. Many of the company's customers are retirees or second-home buyers who have been lured back to Florida's housing market by lower prices. Still, some customers are reluctant to spend. “Our big issue is the buyer of our homes are more closely tied to the stock market,” says Fry. “It's got people worried.”

Kevin Hawkesworth, Shaw Development
Bonita Springs
Region: Kevin Hawkesworth, the president and CEO of Shaw Development, a manufacturer of parts for heavy equipment and trucks, says the regional economy appears to be stabilizing. “Other manufacturers in the area have been doing fairly well,” he says. Hawkesworth says he's finding it easier to hire people because talent has become available. “In the last year we've all been very pleased and eminently satisfied with the hirings we've made,” he says. What's more, local government has been more receptive to manufacturing jobs. “My sense is that they would love to help us more,” Hawkesworth says. “Everybody wants us here.”

Industry: Specialty manufacturing is benefiting from international growth and exports. In addition, manufacturers who have found a niche that isn't easily replicated by low-cost competitors are seeing increases in business. Hawkesworth cites companies such as Structure Medical, Arthrex, Haynes and Marine Concepts as beneficiaries of improving conditions.

Business: Shaw Development makes fuel systems for heavy duty vehicles such as earthmovers, mining equipment and large trucks, and its customers include Caterpillar, John Deere and Cummins. Shaw is benefiting from the commodities boom and the growth in emerging markets. Hawkesworth says he's expecting between 20% to 25% increase in sales in 2012. “The increases are coming from international sales,” he says. In Brazil, for example, the number of large-truck manufacturers has nearly doubled in the last year and a half to 13. Domestically, Hawkesworth says Shaw will benefit from legislation mandating stricter emissions controls because the company makes systems that comply with those.