Surveying the situation

08/28/2006 4:14 PM

09/17/2007 4:41 PM

Businesses are finally starting to think more highly of Miami-Dade's K-12 educational system, saying local schools are no longer such a negative factor when recruiting new workers or companies to the area.

The bad news: Rising insurance costs and worries about hurricanes are seen as not only increasingly important but also as factors that make doing business here much more difficult, according to an annual survey of local companies by the Beacon Council, Miami-Dade County's public/private economic development agency.

After this past hurricane season, the impact of hurricanes jumped to No. 2 in importance, just behind public safety, for the 313 local companies surveyed this past spring. In 2005, it ranked 13th of 21 factors on the list.

Another big swing from last year was sentiment about the cost and availability of commercial real estate, which includes insurance costs.

The problems are really "all of the above" for Olga Ramudo, president of Express Travel, a Coral Gables travel agency that also does event planning.

Ramudo saw her office rent double this year, due to taxes and insurance costs.

She hasn't passed those costs on to her travel customers. But it's hitting her 26 employees.

"Things like raises we would like to give and are very much deserved we can't afford, " she said, calling it a "horrible situation."

INSURANCE WOES

About 40 percent of the 1,900 Florida businesses that recently responded to an informal Office of Insurance Regulation Internet poll said their property insurance was canceled or not renewed by their insurer over the past six months. Most were able to secure coverage, but 49 percent had to pay higher rates or accept less insurance coverage. Another 17 percent could not find insurance at any price.

The Beacon Council survey was sent electronically to about 2,600 companies. A little more than 300 responded, a rate of 12 percent. The study, which was conducted by The Doug Williams Group, found:

* A majority of companies plan to hire more workers and more than a third say they plan to expand operations here, similar to 2005 results.

* Almost all, 94 percent, said they were optimistic about their company's revenue this year. That's down from 96 percent last year.

* Many also plan to keep operations in Miami-Dade, at 84 percent, almost the same as last year.

* Miami's transportation infrastructure received one of the lowest satisfaction ratings by respondents - hurricanes were the only thing considered worse. Last year, the local transportation system received the worst satisfaction rating. Affordable housing also ranked low.

* A new question posed this year about recruiting and obtaining visas for foreign workers received average satisfaction ratings but ranked low in importance.

Beacon Council President Frank Nero thinks that, overall, the survey shows South Florida doing well and that the area can continue to succeed economically. But he worries that the increasing costs of insurance, labor and commercial real estate will have the potential to slow business growth.

'DEADLY COMBINATION'

"That's a deadly combination when we're trying to expand the economy, " said Nero.

Gov. Jeb Bush earlier this month approved fast-tracking a plan to create a state-run commercial insurance pool that would provide emergency property insurance as a stop-gap for businesses that have lost coverage. A special legislative session may also be called to address the property insurance crisis.

The Beacon Council has commissioned a study on commercial insurance costs and availability similar to what the group published last year on affordable housing. The goal is to have the study ready ahead of the next legislative session.

Ramudo, the travel agency owner, just hopes that state and local officials will come up with some answers soon.

"When companies analyze the cost of real estate, cost of employment, cost of insurance, hurricane threats, they probably think twice, " about coming here, she said. "A solution needs to be found for the benefit of all of us." A NATIONWIDE LOOK AT CONFIDENCE Across the nation, confidence among big business leaders about their operations continues to be strong, despite waning optimism about the economy, according to the semiannual Grant Thorton Business Optimism Index. This marks the fourth time in a row the optimism index fell. Some of the study findings:

* On the national economy: Just 30 percent said they thought the economy would improve, compared to 43 percent in June 2005.

* On their own businesses: A vast majority - 87 percent - remain optimistic about their own business, which has changed little since November 2005.

* On hiring: 50 percent plan to increase staff; compared to 55 percent last June. NOTE: Harris Interactive phone survey of more than 300 companies with annual revenue of $50 million to $2 billion. The margin of error was plus or minus 5.7 percent.

CHECKING UP ON MIAMI-DADE BUSINESS
Highlights of the 2006 Beacon Council Local Business, Local Jobs Survey:
* Three most important issues: Level of public safety, impact of hurricanes, cost of labor.
* Issues that received lowest satisfaction ratings: Housing affordability and quality, transportation infrastructure quality and impact of hurricanes.
* Hiring: Similar to last year's results, 70 percent said they plan to hire additional employees this year.
* Business retention: 84 percent said they plan to keep their businesses here, slightly less than last year (86 percent).
* Expansion: 32 percent said they would expand their businesses, again, just a bit lower than the 2005 figure (38 percent).
SOURCE: The Beacon Council

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