Opportunities for the Middle Market in South FL
Manny Perdomo—Chairman, CEO and President at SunTrust Bank South Florida—discusses trends, challenges and opportunities.
[Host] South Florida—known to some as the ‘capital of Latin America’—is a bustling area for business, given its temperate climate and its proximity to international markets. Trends revealed in the first quarter’s Middle Market Indicator Survey suggested overall revenue and employment growth across the U.S. We spoke with Manny Perdomo, Chairman, CEO and President at SunTrust Bank South Florida, about whether the same general trends are true in Miami and the surrounding communities.
[Manny] South Florida continues to grow. Maybe not at the same pace, because of international events that are occurring. However it is still a very favorable market, in particular for any companies that potentially would like to move within the U.S. We still have a bit of a weather advantage than in some other places. Needless to say, the marketing of South Florida continues to be strong.
[Host] In addition to aging services—traditionally a stronghold for the region—other industries are positioned for growth.
[Manny] Healthcare is continuing to be a growing opportunity, in particular aging services. I think there’s also some growth in the M & A activity in healthcare facilities dedicated to substance abuse. These health centers are rising. And so it’s creating an opportunity. Construction companies continue to be highly active, but that activity is slowing. In particular, because of the condo market, the absorption rates are not what they were before. And so many of the new construction projects that have been planned have been postponed, for the moment, even though the existing activity is more than enough to keep everybody busy.
[Host] In recent years, finding the right talent for open positions has been a challenge for middle-market companies. But this presents an opportunity for the right candidates.
[Manny] We’ve got a lot of key positions aging, and people retiring, and not necessarily availability of backfill, with experience, to kinda match that. There is a challenge for a lot of the middle-market companies to try to find that right talent, hire it away, and be able to compensate it in a way that’s still economical for their strategy. Earlier in the year, there was a lot of optimism. We’ve opened up a lot of these opportunities, but that has ebbed back a little bit.
[Host] Generally speaking, many business leaders have shifted from outright bullishness earlier in the year to a place of patience and cautious optimism. Manny explains why.
[Manny] When the poll was conducted earlier in the year, I think that most of our clients were very bullish. Most of these middle market companies and their executives are successful, and they’re sitting on a lot of liquidity, looking at where to invest and grow. Optimism rose out of the new administration communication and thoughts around the savings that would be created from healthcare costs and taxes and some of the reduced regulatory burden. And unfortunately, that did not materialize as yet, and therefore fulfilling that rhetoric is causing everyone just to take a pause. I think they’re going to sit back a little bit, be cautious, until some of these items become a little more clear. But ultimately, I think there are just too many opportunities out there for these types of entrepreneurs to sit back and allow them just to pass.
[Host] Some of these opportunities for middle-market businesses in South Florida involve global trade. And companies are taking full advantage, despite a familiar delicate balance.
[Manny] So as we look at Latin America there’s pros and cons. The largest economies have been Brazil and Mexico, and then you have a lot of other economies that include not only countries within Latin America, but also a lot in the Caribbean and Central America, which are much smaller. The fact that there are so many creates a certain level of diversification that offsets any of the downturns in any one economy. That balance and that diversification has always played into what occurs here in Miami with our middle-market companies.
[Host] And despite recent inertia in Washington, the overall business outlook is still bright.
[Manny] I don’t believe that there is pessimism in anything, just simply because financially most of these companies are very healthy. The banks are very healthy. And so it’s a matter of how do we take this health and move it forward. It’s getting a real handle on the rules of the game, understanding what those rules are and what the cost for those rules will be, in order to have a definitive plan to say okay, we’re going to move forward.
[Host] Thanks Manny. To learn what business leaders from varied industries across the U.S. recently told the National Center for the Middle Market about revenue trends and their outlook for the economy, refer to the SunTrust Middle Market Banking Page.
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