Photo Credit : Jim Carchidi
Bobby Serros’ firm hasn’t seen revenue drop yet, but he’s seeing hints that the spreading global recession eventually will affect his exports.
The founder, president and CEO of Amber Diagnostics in Orlando — which distributes diagnostic health care equipment to African nations — said clients are beginning to experience financing delays.
That factor, combined with the strengthening dollar, leads Serros to believe demand will weaken for his products overseas — at a time when domestic demand has dropped off due to the U.S. recession.
His experience could portend more trouble for Florida. Up to now, one of the few bright spots for the state has been its ever-increasing exports, which economists have said is a major factor keeping the economic engine running at all.
Indeed, with exports of $4.19 billion in November, the most recent data available, Florida set a new yearly record — with December still to be counted. So far, through the first 11 months of 2008, the state shipped products worth roughly $45.8 billion, up from $44.8 billion for all of 2007.
However, since the all-time monthly high of $5.43 billion was reached in August, the totals have been sliding. November’s total plunged 12.4 percent from October’s $4.78 billion, substantially more than the 7.2 percent decline nationwide, said Durham, N.H.-based Infometrica Inc.
“The growth in other countries Florida does business with has decelerated quite a bit, and the financial crisis has spread to Latin America, [South] Korea and Southeast Asia,” said Evangelos Otto Simos, Infometrica’s chief economist.
Latin America, which accounts for 68 percent of Florida’s export market, had been growing rapidly and now is slowing almost as quickly. Part of its problem, Simos said, is countries there rely heavily on commodities for their exports, but commodity prices have fallen as global demand weakens. “The foreign sector will not be good in 2009 for Florida — jobs will be lost.”
Florida’s export problem could be compounded by “Buy American” provisions in the proposed federal stimulus package, said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. “Just the fact that it’s being discussed is troubling because other countries will retaliate. It’s one of those things that turned a recession into the Great Depression.”
But Manny Mencia, senior vice president for international business development for Enterprise Florida, isn’t particularly troubled by the export downturn.
Mencia expects first-quarter exports to slow significantly, but still anticipates exports to show positive growth year-over-year because Latin American economies generally are stronger than they used to be. “I expect slower growth, but I do expect growth — I don’t expect 2009 to be weaker than 2008.”