Florida Keys Economy Showing Signs of Improvement

During the Florida Keys’ annual Fall business lull, sustainable and established businesses are proving able to weather any economic storm that may lie just on the horizon. Even in the slowest month of the historically based tourism economy, many are able to absorb the cyclical changes.

New Jersey native Paul DiMatteo, owner of Boardwalk Pizza in Islamorada since 2005, said Labor Day weekend provided a nice shot in the arm before the slow September.

“We expect it every year,” he said. “This month is always slow.”

Laurie Tencelski at Laurie’s Deli in Marathon said the pace of business in the late 80s and early 90s typically dropped off as soon as seasonal residents headed back north each Spring.

“The whole town got quiet,” she recalled, laughing that through the Middle Keys, one could practically lie in the middle of U.S. 1 traffic was so infrequent. “We’re thankful we now have that busy June, July, and even August.”

“It’s clear to me the Keys’ economy is ‘correcting’ from an artificial, unsustainable real estate-based economic rise and fall,” Monroe County Administrator Roman Gastesi offered. “The numbers don’t lie – the tourist impact tax is up seven percent, and sales tax is up three percent.”

Monroe County Airports Director Peter Horton confirmed passenger numbers at Key West International Airport are up nearly 15 percent for the first seven months of 2010.

The airline industry nationwide reports an eight percent increase over last year with an extremely strong July.

“Even though it’s our slower time in the Keys, June, July and August is the peak season for the airline industry in the United States,” Horton explained. “Whether they’re traveling for business, pleasure or whatever, passenger numbers are up nationwide eight percent. Our July numbers are up 9.8 percent over last July.”

The addition of AirTran service from Key West to Orlando in December 2009 has also helped increase the flow of traffic through EYW.

“Many people now tell me they can afford to fly out of Key West,” he added. “Low cost competition is good for a small airport like ours. Other airline fares drop when a new, low cost competitor comes in.”

First State Bank of the Florida Keys recently released their second quarter earnings and growth results, and they reported positive earnings with a 20 percent increase in capital with 41 percent of its assets in cash or liquid investments and more liquidity than is required by the government.

“Despite the current national and local economic environment, FSB remains strong. For 55 years we have been there for our customers and our Keys community through the seasonal business cycles of our tourism-driven economy, natural disasters, and national economic challenges,” said Karen Sharp, First State Bank President and CEO.

She continued, “We have seen positive signs in certain business sectors throughout the Keys indicating that 2010 has been a better year thus far than 2009.”

The upward trend, Sharp concluded, will likely continue through the remainder of this year with an even more positive outlook for 2011.

Advice for Small Business Owners
1.  Keep Finances Liquid
    a.  Liquidity is very important in uncertain and challenging economic times. Retaining higher levels of available cash gives businesses more flexibility and added security.
2.  Manage Finances Closely
    a.  Businesses should be actively involved in the management of their finances, reviewing financial information more frequently to adapt quickly to changing conditions.
3.  Communicate with Your Local Banker
    a.  Businesses should keep an open line of communication with their local banker. Keeping money in a local bank ensures that the funds they deposit are re-invested in their local community.
4.  Review Expenditures
    a.  Expenditures should be reviewed regularly and adjusted to related income levels.
5.  Seek Opportunities and Plan for the Future
    a.  Challenging economic times also present opportunities for future growth. For example the current real estate market is quite attractive and interest rates remain very low.  Businesses should evaluate their future needs, as now may be the time to buy if they are financially prepared.

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