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Manufacturing 2008

Watson Pharmaceuticals
Healthy dose: A Watson Pharmaceuticals manufacturing operator in Davie prepares for a production run. Pharmaceuticals are showing strong signs for the year ahead. [Photo: Heinz Kleutmeier]

While industry analysts are anticipating minimal growth in Florida manufacturing in 2008, two segments — aviation and biosciences — are expecting banner years.

Because of aging aircraft worldwide, demand for new planes and refurbishing both commercial and private jets is robust, says Greg Powell, director of investor relations for Wellington-based B/E Aerospace, a maker of cabin interior products for airlines, aircraft manufacturers and business jet owners.

» "Now that the dollar is moving back to its historical levels, we expect to see a vigorous expansion in manufacturing."
— Hank Cox, vice president of communications, National Association of Manufacturers

Vero Beach’s Piper Aircraft should benefit from the trend as well. Late last year, Indian River County commissioners signed off on $16 million in incentives — along with $20 million from the state — to keep the aircraft maker from moving.

Powell says several factors are driving the aviation market, including increased demand for private aircraft, an aging fleet of commercial carriers, more airline passengers and international orders.

“Airlines are flying fuller and have more flights,” Powell says. “We’re getting a lot of orders to retrofit first-class cabins with new interiors because that’s where the airlines make their money. We certainly expect that market to continue. We’re doing $2 billion in revenue next year, up from $1.6 billion this year.”

Asia and the Middle East, Powell says, are two areas that are “coming on strong” with orders.

June Wolfe, president of the South Florida Manufacturers Association, is also seeing “very strong growth” in medical manufacturing, including medical equipment and pharmaceuticals, which she attributes to an aging population.

Manufacturers who export their goods are hoping to benefit from a weakening dollar. Hank Cox, vice president of communications for the National Association of Manufacturers, says based on the dollar’s value against other currencies, U.S. goods are in greater demand in the world market.

“We’ve struggled in the last few years because of intense foreign competition,” Cox says. “Now that the dollar is moving back to its historical levels, we expect to see a vigorous expansion in manufacturing. We see exports rising much faster than imports, and we expect that to continue.”

Nancy Stephens, executive director of the Manufacturers Association of Florida, would like to see more exports, but she’s not sure how much market impact the dollar’s value will have.

“It’s really too early to tell,” she says. “At this point it’s not a big concern or issue for manufacturers.”


COMING CLEAN: Arizona Chemical’s plant in Port St. Joe reduced air emissions, water use and wastewater loading.
[Photo: Richard Lee]

Going Green

“All manufacturers are looking to increase their bottom line and at the same time address environmental concerns,” says Eric Roe, director of the Center for Manufacturing Education. “Lean manufacturing, eliminating waste from the process, will be a big goal.” Nancy Stephens, executive director of the Manufacturers Association of Florida, says green philosophy will begin to trickle down to medium and smaller manufacturers this year. “We have about 50 manufacturers participating in the EPA program called Performance Track,” Stephens says. “One of them is (Jacksonville-based) Arizona Chemical, and they’ve made significant strides in reducing emissions.”

The Trends

? Push for tax breaks
? Increasing theft of product designs — even down to logos — by overseas manufacturers
? Continued strength in aviation, electronics, medical and fabrication of metal components sectors
? Workforce concerns, including retiring Baby Boomers and labor shortages in a number of sectors, including the marine industry in south Florida
? Stronger demand overseas for American products because of the weak dollar

On Workforce Development

“It’s still an important issue to us and the most important thing that happened last year and translates to action this year in Senate Bill 1232, the Florida Career and Professional Academies Act. That mandates that every school district in the state implement a career and professional academy by the next academic school year and provides increased funding to do that. It really gives us an opportunity to start building that pipeline of workers.”
— Eric Roe, director,
Center for Manufacturing Education

Shortage of Profits and Workers

“Half our members tell us they have jobs empty right now because they can’t find qualified manufacturing workers, says Hank Cox, vice president of communications for the National Association of Manufacturers. Higher costs for water, electricity and raw materials will shrink the bottom line, says Nancy Stephens, executive director of the Manufacturers Association of Florida. “That’s going to be a killer,” Stephens says. “It’s really going to put a dent in profits. We’re going to have to address resources, power and people.” On average, manufacturing jobs in Florida paid $45,711 in 2006, up from $43,410 in 2005, according to the Manufacturers Association of Florida.