WorldCity Business Magazine

Looking beyond the numbers

by Mary Dempsey

Top executives at four South Florida companies are planning for big growth in sales and revenues this year. But that doesn’t mean they aren’t worried.

Business is going gangbusters and should continue to power ahead with good results in 2006, according to four corporate executives who took part in WorldCity’s recent CEO Roundtable. Still, the four from companies as diverse as a law firm, a real estate conglomerate, a public relations giant and a technology services operation found common ground when it came to the things that worry them.

Those included restrictive immigration in the United States and the high cost of living in South Florida. Their comments echoed the concerns of other top executives from previous roundtables.

“Business has been good for us,” said Santiago Hinajosa, CEO for Latin America at public relations company Burson-Marsteller. “We’ve had double-digit growth for the last four years running and in 2006, so far, we’re on plan. Everything seems to indicate growth regardless of the volatility of the region.”

That’s may be because public relations companies do well in good times and in bad. When the economy is booming, companies are flush with money to spend on promotion and branding campaigns. When times are not-so-good, companies like Burson-Marsteller are called in to help take the edge off layoffs and plant closings.

Although Hinajosa was optimistic about the company’s ability to boost revenues, he was less enthusiastic about its ongoing ability to lure new talent to the South Florida office.

He said multinationals used to look Miami as a spot to open regional offices for Latin America because the infrastructure in some of those countries was not yet sophisticated enough. “Now things work well in some of those countries,” he said. And with real estate prices here so high, all the industries with young people or young talent are going to have a problem relocating to South Florida. Young people cannot afford to live in Miami by themselves earning $35,000.

“The resumes I used to get from Boston have stopped coming,” he added.

Tere Blanca, senior managing director and the head of South Florida for real estate company Cushman & Wakefield, acknowledged that housing prices are moving beyond the reach of many low and middle-income workers and that is discouraging big companies from relocating to the Miami area. She also expressed concern about what would happen long term to the local market, which is filled with investment properties. When it comes to employment, however, she simply predicted that wages will have to rise up to keep pace with rising housing costs. “You’ll see an adjustment,” she said. “We’re just going to have to pay more.”

Attorney Mitchell Fuerst told the other business leaders at the breakfast meeting that while Miami prices are going up, it is still less expensive than California or even Houston. And the partner at Rodriguez O’Donnell Ross and Fuerst, the Miami-based law firm specializing in international trade, said he has seen no slowdown in the number of Latin Americans seeking to establish residency in South Florida.

Tere Blanca agreed that the Latin American arrivals and investment continues. “You’ve had the largest inflow of Argentine wealth in the last few years. They come and they start a business,” she said. “And then there are the new Mexicans. There’s a whole wave of Mexicans coming to South Florida to open new businesses.”

Hinajosa pointed out that the area has traditionally been a haven for South Americans, and he predicted a new group would soon be arriving. “Now we’re going to get a whole wave of Bolivians coming through here,” he said, making reference to the populist policies of Bolivian President Evo Morales, who has created a stir among business investors for his decision to nationalize natural gas reserves and assets.

The Bolivians’ ability to make the United States their home, should a migration occur, could be dampened by U.S. immigration policy. The breakfast briefing panelists expressed frustration over current government restrictions, especially on visas for highly educated workers in specialized fields, including science and technology.

Baird Lobree, the CEO of technology solutions and management company Auxis, said staffing isn’t he only challenge facing tech companies. He said business had been good but he worries about inflationary pressures and how they will affect business outlays. “We have enough of a steady base that waxes and wanes don’t affect us,” he said. “However, our clients are being squeezed by taxes, by energy prices. I think inflation is a bigger monster than everyone lets on.”