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Light at the End of the Tunnel?
Some Space Coast companies see a rebound while others are mixed on a quick recovery

By Anne Straub
Brevard Technical Journal

Brevard County manufacturers have seen the worst of the current recession, business leaders agree.

National economic indicators show some growth, and local business people say the spate of layoffs that plagued the county for the past year is tapering off.

"We're seeing a little bit of a comeback," said Mike Anderson, associate director for operations for Brevard County Job Link, the county's employment agency. "It appears as if things may be on the rebound."

Nationally, the picture is improving, as well. Federal Reserve Chairman Alan Greenspan sees mounting evidence of an end to the recession, which could turn out to be one of the country's mildest. He warns, however, that recovery is likely to be muted and puts economic growth at just 2.5 to 3 percent for the year.

The downturn began nationally last March and started being felt in Brevard during the summer. Various high-tech companies started slimming their workforces, with layoffs tallied by the Economic Development Commission easily exceeding 1,000 jobs lost.

As the U.S. economy slowly picks up steam, recovery on the Space Coast is mixed.

"Contract military manufacturers are quite busy," said Lynda Weatherman, EDC president and CEO. The Sept. 11 terrorist attacks spurred demand at Brevard military subcontractors, depleting their inventory and causing some to contact the EDC in search of larger facilities for expansion.

Non-military high-tech companies have not seen much change in recent months, but neither are they talking to the EDC about major layoffs, Weatherman said. They need a global recovery that would increase sales of their product now on hand and then lead to demand for more production.

"What you have right now in the high-tech world is an oversupply of inventory. As that inventory gets used up, we'll start to see a recovery," she said.

Brevard has two advantages for weathering the current downturn, said Tim Hollingsworth, dean of the School of Business at Florida Institute of Technology: The area's booming health-care industry, and the resilience of small businesses.

"They can absorb a lot more of this," he said of small business's ability to handle downturns without a big impact on unemployment. "Instead of letting someone go, they can cut someone's hours to 30."

Rather than implement large layoffs, many companies likely simply scrapped plans to hire more staff as the slowdown continued, Hollingsworth said.

If the recession continues to linger locally, the terrorist attacks are not likely to be the reason. Few high-tech or manufacturing companies are worried about the effects of Sept. 11 on their business, according to a survey the EDC completed in November.

The largest segment of respondents, 39 percent, called the impact of the attacks on the business "negligible." The next-largest segment, 31 percent, chose the next-lowest impact statement of "somewhat significant."

Nearly one-third of respondents expected to see a decline in sales, but forecast that the anticipated declines would taper off throughout 2002.

For the county's economy as a whole, Sept. 11 did more to prolong than to trigger a slowdown.

"Normally, Brevard has its peaks and valleys, anyway. We were, in our estimation, just looking at a valley. But then Sept. 11 happened, and the valley just kept going," Anderson said. "Normally we would have gotten back, but everyone was holding back. The jobs just weren't there."

In January, the last month for which figures are available, 25,800 people worked in Brevard's manufacturing sector. That's down 2,000 from January 2001, before the national recession began. Still, the numbers show some improvement over the months immediately following the terrorist attack.

Melbourne wireless communications company AirNet Communications Corp. has felt the effects of business's reluctance to invest.

"We really saw things start to bottom for us in June," said Stuart Dawley, general counsel and investor relations officer. The company had seven or eight field trials that went well, but their customers - many of them small, entrepreneurial firms - didn't want to spend the money on the product during a recession.

"There was no scenario in our planning that said. 'Your trials are technical successes, but they don't order,'" Dawley said. "We're starting to see some small signs of recovery, but we're not there yet."