2008 was a lackluster year and Florida's CEOs project 2009 will be similar or worse.
Taking aim at new domestic and international markets
Florida CEOs are responding to the state and national economic downturn in several ways. One is by expanding into new markets, both domestic and international. Half of Florida CEOs say that they will be expanding their businesses into new geographic areas in 2009. This is the same percentage observed last year.
Almost nine out of 10 (89%) CEOs consider the Florida market either extremely important (68%) or very important (21%) to their organization. The percentage rating the Florida market as extremely important is up from 64% in the 2007 survey and is the highest percentage ever reported for this question. More than half of CEOs in every industry except manufacturing, technology and transportation consider the Florida market extremely important.
Internationally, Florida’s CEOs are targeting Latin America and the Caribbean (20%), Europe (16%), Asia (15%), India (9%), China (8%), Canada (7%) and the Middle East (6%). Over one-third (36%) of CEOs report that international business will be a bigger part of their overall business activity in 2009 compared to 2008. Industries in which at least half of CEOs expect an increase in international business include business associations, business services, hospitality, insurance and professional services.
Energy costs impacting the bottom line
A second way Florida’s CEOs are responding to the economic slowdown is by addressing energy costs. Nine out of 10 CEOs (93%) report that increased costs for fuel and electricity have impacted their organization’s bottom line. About half (56%) say that the impact has been limited, while more than a third (37%) characterize it as significant. Significant impacts are reported by more than half of all CEOs in agribusiness, business services, education, energy, hospitality, human resources, media, restaurants, retail trade, transportation and wholesale trade.
Almost eight out of 10 (79%) CEOs are taking steps to minimize the impact of rising fuel and energy costs on their organizations. Cost-cutting actions include implementing energy conservation measures (56%); improving fuel management and logistics (35%); allowing work-from-home or telecommuting arrangements (26%); cutting back on air conditioning/heating (25%); changing fuel/energy purchasing practices (24%); consolidating office space or other logistical operations (24%); modifying vehicles (19%); and moving to a four-day workweek (11%).
Most of Florida’s CEOs support energy exploration in Florida’s coastal waters. One in five (21%) support such exploration unconditionally. However, most (59%) favor offshore drilling only as long as military test zones are protected and environmental standards are maintained. Another 14% are entirely opposed to such exploration even if fuel prices rise.