MANUFACTURING MORE THAN TOURISM
As global trade and manufacturing continue to expand, US states that have port access, skilled talent and industrial space are poised to thrive. Home to one of the fastest-growing economies and some of the fastest-growing cities in the nation, Florida is experiencing a rise in manufacturing activity in many areas of the state.
Florida’s growing manufacturing base is being fueled by thriving ports, high population growth rates, a strong education system and what many say is one of the best business environments in the nation. New manufacturing tax credits, port infrastructure investments and the expansion of the Panama Canal are likely to contribute to growth.
A Fast-Growing Economy
With a GDP growth rate of 3 percent in 2016, Florida retains one of the fastest-growing economies in the nation. Just ahead of California, it has the fifth-highest rate of economic expansion in the country and is well ahead of the average US growth rate of 2.1 percent.
While Florida may not rank near the top for manufacturing jobs and share of state GDP, things are on the rise. Mike Grissom, interim president and CEO of Enterprise Florida, says the state passed a permanent sales tax exemption on manufacturing machinery and equipment. He says investment has also been driven by Florida’s highly ranked business climate and the fact that it is one of only seven states with no personal income tax. There are currently more than 19,000 manufacturing businesses operating in Florida employing more than 330,000 workers.
The biggest industry subsectors in 2016 were fabricated metal product manufacturing, chemical manufacturing and transportation equipment manufacturing. Much of the job growth has been in the boat-building industry, aerospace and motor vehicle parts. Bertram Yachts recently announced a new headquarters in Tampa, and aviation manufacturer HAECO Americas announced an expansion of 400 more jobs in Lake City. Other manufacturers with a big presence include Frito Lay, American Elite Molding and Conergy.
An analysis by PwC recognized Florida as the second best state in the country for aerospace and manufacturing attractiveness. The aviation and aerospace sector alone has 2,000 companies operating in the state with more than 80,000 workers. Partners in the aerospace industry include Northrop, Lockheed Martin, Mitsubishi Hitachi and GKN.
The opening of the Panama Canal expansion last year has also fueled more growth in trade and shipping at many Florida ports. Port Everglades is preparing to invest in three Super-Post-Panamax gantry cranes to access containers on taller and wider cargo ships. The Port of Jacksonville is also deepening its shipping channels, and Port Canaveral recently announced a $301 million capital expansion.
Larger ships arriving at Florida ports are opening new trade opportunities and supporting the region as a manufacturing and logistics hub, according to Jaap Donath, senior vice president of Research and Strategic Planning at The Beacon Council (Miami-Dade County’s economic development partnership). PortMiami recently completed $1 billion in capital improvements by deepening its channel to a 52-foot depth, installing new Super-Post-Panamax cranes and improving rail and road access. In early June, the port welcomed the 1,063-foot-long, 10,081-TEU Maersk Shanghai, the largest ship to ever call at a Florida port.
While Miami has long served as a gateway to the Americas, Donath says more companies are now positioning themselves in the city as a hub between North and South America. Greater access to Asia has also grown by 11 percent in the past year and has driven manufacturing activity. “We’re seeing the benefits of larger ships and more companies are coming to Miami as a platform for all of the Americas. Asia as a manufacturing hub is now looking more at Miami as a location for the whole region,” Donath says.
The manufacturing sector is also seeing strong growth in Central Florida between Orlando and Tampa. Dave Porter, senior vice president at the Orlando Economic Development Commission, says while Orlando is often thought of as a tourism-oriented city, that sector only represents one third of the economy. He says there has been significant manufacturing growth in the region in recent years. Aerospace and defense manufacturers also have a strong presence in the region, and Lockheed Martin now has two campuses and 7,000 employees there building F-16s and equipment for other military contracts.
“We’re seeing some foreign investment as well. It’s an important part of our economy that I think has the potential to grow even more, especially with advanced manufacturing,” Porter says.
Orlando is in the midst of a $15 billion infrastructure investment that includes an overhaul of Interstate 4 and expansions of the rail system, international airport and Port Canaveral. In April, Bridging the Innovation to Development Gap (BRIDG), the world’s first industry-led sensor consortium, opened the Florida Advanced Manufacturing Research Center in Osceola. The facility will be one of the most advanced fabrication labs in the world.
According to the US Census Bureau, Tampa is one of the fastest-growing cities in the nation, reaching 3 million residents last year. The Brookings Institute also ranked the region as 18th in the country for economic performance. Steve Morey, vice president of Business Development at the Tampa Hillsborough Economic Development Corp., says more than 20 percent of the projects announced in the region in the past year have been in the manufacturing sector. He also says Tampa is being driven by rapid population growth that is rising with the Caribbean, Central and South America.
Aero Simulation, a manufacturer of flight simulators for military and commercial aircrafts, last year announced an expansion in the region and pointed to Tampa’s rich pool of talent. Tampa is also growing as a logistics hub, and the new Manufacturing Alliance of Hillsborough County was formed last year to bolster job training. Morey says the county is being driven by population growth with an influx of highly skilled workers and strong education programs at the University of South Florida, the University of Tampa and Hillsborough Community College. “We’ve got skilled people moving here, strong academic institutions and a lot of veterans and workers coming out of the military,” Morey says.
Activity Spreading Across the Sunshine State
Manufacturing activity is also growing in other areas of Florida, with new expansions adding 47,000 jobs in the sector since 2010. Hans-Mill Corp. recently moved operations from China and established its first US facility in the US in Jacksonville. Brazilian company Clodam do Brasil and German medical supply manufacturers KLS Martin Group also established operations here in the past couple of years. Governor Rick Scott hailed the HAECO expansion in Lake City as another step toward expanding in rural North Florida.
Enterprise Florida is also striving to expand manufacturing in more rural areas of the Panhandle due to the region’s abundant land, direct access to ports and interstates and a robust talent market. Grissom says Florida is working with CareerSource Florida, the state’s workforce development organization, to help train citizens in rural communities to prepare for the talent that manufacturers are seeking. “There’s really nowhere in the state of Florida where you are more than an hour from the Interstate or the coast, and the logistics options that companies have to choose from are what make Florida truly unique,” Grissom says.
Last year, Eastern Shipbuilding in Panama City was awarded a $10.5 billion contract to build more than two dozen new US Coast Guard cutters. It was the largest contract the Coast Guard awarded in its history and is set to add an additional 2,000 jobs in the region. Panama City Mayor Greg Brudnicki at the time called it a “game changer” for manufacturing in the region.
Florida’s Outward Focus