Economic Sunshine in the Sunshine State
Between 2012 and 2016, the fifteen major ports of Florida added 200,000 jobs and handled 7.9 million tons more cargo. And at $117.6 billion, the economic operations of these ports contribute 13.35% of the state’s Gross Domestic Product (GDP).
These are some of the observations recorded in the study The Statewide Economic Impacts of Florida Seaports authored by the Florida Ports Council. Impressive figures these! And by the looks of it, sunny economic weather is here to stay in Florida.
Governor of Florida, Rick Scott celebrated some of these achievements on December 13 this year at Port Tampa Bay, the port that commissioned two cranes capable of dealing with post-Panamax ships.
Over the last five years, the state has invested $1 billion in its ports. The investment has started bearing fruit and the results are no less than spectacular. These achievements are only the beginning.
Governor Scott has set his sights much higher. He wants these ports and the vibrant economic activity they inspire to make Florida a gateway to Latin America given the fact that the Panama Canal has just been expanded to support larger ships.
Ports @ Economy
Ports are central to the economy of a country or a region. Over 90% of the globally traded merchandise moves through ships. Ports open up far flung global markets to producers in its hinterland. This promotes production. This also inspires specialisation and diversification of economic activities.
The more quality goods a region produces and the more it trades, the greater will be its income. One of the important reasons for this rise in prosperity is the access granted to the markets over the world by ports. Of course, this is only a partially necessary condition.
It therefore comes as no surprise that the top financial centers of the world – New York, London, Hong Kong, Singapore, Frankfurt, Tokyo, Mumbai and the like – are all port towns.
Florida enjoys a unique maritime location. It is the only state in the United States that touches the Atlantic Ocean on one side and the Gulf of Mexico on the other. The Atlantic is home to some of the most flourishing and strategically important trade routes between Europe and North America. And the waters of the Gulf of Mexico are oil rich.
Ports of Florida clocked an impressive economic activity of $117.6 billion. Considering the $882.8 billion Gross Domestic Product (GDP) of Florida in 2015, this represents 13.35% of Florida’s economy. Florida’s GDP was the fourth highest in the United States in 2015.
Now, $14.5 billion of $117.6 billion is in direct business revenue while $5.4 billion makes up economic activity from local consumption and re-spending. The remaining $97.7 billion is created due to cargo movements at these ports.
Families across the state get $40 billion worth wages from these ports that directly and indirectly employ 900,000 people and create $4.3 billion in local and state tax revenue.
In 2016, ports in Florida have dealt with 7.9 million tons more cargo than in 2012, an annual growth of 3%. The principal stimulants of this growth were shipments of containerized cargo, dry bulk commodities, automobiles, petroleum, and steel products.
Proactive action by the state authorities has gone a long way in ensuring this success. They did not wait for the federal government to finance the channel dredging project at Port Miami. The cost of dredging was $220 million and the federal contribution was $70 million.
At the time the dredging project was complete in late-2015, the port of Miami was the only port south of Virginia capable of hosting post-Panamax ships. Speaks volumes of the vision of the authorities.
Over the next five years, the state will pour another $3.7 billion investment into its ports. Through this, authorities hope to make Florida an important hub for global trade.
Up next in the list of state authorities are the deepening projects at Port Everglades and JAXPORT. These will further augment the global competitiveness of the state. JAXPORT has already started operating three new post-Panamax container cranes at the Blount Island Marine Terminal.
To continue along this noteworthy growth trajectory, the state and the ports have to further upgrade the port and supporting infrastructure in Florida and Southeastern United States while continuing to strongly market the logistical cost advantage of the state.
Manufacturing & Metal Fabrication in Florida
Brian Taylor, CEO of the Jacksonville Port Authority, remarked on how the seaports of Florida are an economic powerhouse that host the largest vessels from across the globe with their cutting edge cargo and cruise terminals while promoting manufacturing and distribution operations in the state.
With over 14,000 manufacturing businesses that contribute about 5% ($41.6 billion in 2014) of the state’s GDP, Florida is among the top ten manufacturing states in the U.S. The sector employs around 355,000 or 4.2% of the state’s workforce.
In a move designed to boost Florida’s manufacturing sector, state authorities eliminated sales tax on manufacturing machinery in 2014. The results were positive and the state’s budged recorded impressive gains despite tax cuts.
The apart, Florida boasts of skilled technicians, competitive costs, good infrastructure, low unionization rates, reciprocal integration with the global economy, and targeted industry programs for generating employment and attracting investment. All stimulate manufacturing in the state.
One dollar of manufactured goods in Florida creates another $1.43 of economic activity in other sectors. Of the exports from Florida in 2011, 85-90% were manufactured goods.
And at $68,000, the average annual salary of a manufacturing employee in the state is 72% more than that of the average private sector wage in Florida. The point is, the manufacturing sector in Florida has recovered from the Great Recession of 2009 and is on its way up.
Even within manufacturing, the prospects are particularly bright for the metal fabrication segment in Florida and the rest of the U.S. This is on account of two reasons:
- Of the 869,000 jobs created in U.S. manufacturing between March 2010 and April 2015, 76% were generated in the metal fabrication and transport equipment segments
- In addition to primary metal manufacturing and chemicals, metal fabrication is expected to record handsome gains due to re-shoring
Re-shoring is the return of those economic operations that were earlier outsourced to cheap-labor economies such as China. Such return will create employment and income in the U.S.
Many eminent economists believe there is one economic slowdown every eight years. As 2016 draws to a close, we can thank our stars for not letting the ghost of 2008 to resurrect, at least in the present year.
Visionary investments such as those made by the authorities in Florida are a great way to forge ahead.
If you have an eye for insights in the world of marine and industrial engineering in Florida and the rest of the United States, visit our blog.
Kemplon Engineering is proud to be among the top metal fabricators in Florida. Based in Fort Lauderdale, Kemplon is a leading marine and industrial engineering company offering marvellous marine fabrication services, marine pipe fitting, and large scale custom metal fabrication.