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CAN'T FIND SOMETHING? |
Business in Vancouver June 2-8, 2009; issue 1023 Downturn affects more than two-thirds of Metro Vancouver businesses, BIV-Ipsos survey finds Layoffs, salary freezes and reductions and budget cuts among the tactics used by companies to deal with tough economic times Andrew Petrozzi Few B.C. businesses have managed to dodge fallout from the slumping global economy, but almost one-third (32%) of business leaders responding to the latest BIV-Ipsos survey said their businesses have not been significantly affected by the downturn. The survey was conducted April 16 to April 29 and was commissioned by BIV to gauge how local businesses are faring during the global economic crisis and what they’re doing to weather the storm. Among the survey’s findings: •68% of respondents said the economic crisis has affected their business; •24% said the impact was very significant; •44% said it was somewhat significant; •of the remaining 32%, 19% said the downturn has not had a significant impact; and •13% said it has had no impact. Steve Mossop, president of North America’s western region for Ipsos, pointed out that the BIV-Ipsos poll surveys representatives from the entire economy, not just the private sector. “I was more shocked by the numbers that say how significant the impact is,” Mossop said. “Sixty-eight per cent saying it’s a significant impact is an outstanding number.” According to the survey, 59% of respondents said their profits were down and 57% said revenue had dropped when compared with April 2008. But 21% of respondents said their profits had increased and 24% said revenue had gone up compared with April 2008. “It’s up to each of us to be creative and find ways to make our own businesses thrive during these difficult times,” said survey respondent Don Evans, president of North Vancouver’s DJE Holdings Ltd. Added fellow poll participant Brian Jones, regional manager of Challenger Motor Freight in Aldergrove: “We’ve been fortunate to continue to grow through this economic crisis, but I’d also like to believe it has to do with the way we manage our business, the way we treat our employees and the dedication and hard work they put back in and the level of service we provide to our customers.” While respondents said that minimizing company sponsorships (60%) and cutting supply budgets (60%) were the top cost-saving initiatives they’d implemented since the beginning of 2009, salary freezes (51%), travel-budget cuts (49%), hiring freezes (46%), renegotiated supplier contracts (35%), staff layoffs (31%) and salary reductions (27%) were also common. “Any other survey I’ve seen in any economic outlook has never seen numbers this dire,” said Mossop. “Half of the companies are saying salaries are frozen, and then you have another 27% saying they’re reducing salaries. That’s unheard of.” Mossop added that the rise of innovative approaches to reducing costs such as job-sharing (9%) and four-day work-weeks (10%) illustrates that business owners are “looking outside the box” and considering alternatives. While survey results suggest the economy might be starting to turn a corner into positive territory, business leaders remain vigilant for 2009: •36% indicated layoffs were likely in the future; •hiring freezes (60%), salary reductions (36%) and salary freezes (69%) are also likely this year; and •budget cuts to travel (62%), supplies (74%) and company sponsorships (73%) are options in 2009 to cut costs further. Meanwhile, 62% of survey respondents were against government bailouts; 23% supported them. Industry-wise, most respondents opposed bailouts in general. They were most opposed to bailouts for retailers (74%), the auto industry (70%) and the finance and insurance sectors (67%). They were least opposed to bailouts for forestry (52%), the film and television production industry (56%) and transportation, communications and utilities (59%). Mossop said opposition to government bailouts is common in North America. He said there are perceptions, particularly in the U.S., that simply throwing money at economic problems is not a solution. Businesspeople also question why some industries get bailouts and others are left to fend for themselves. Some survey respondents pointed to the media’s role in contributing to negative perceptions of the economy. Mossop said that sentiment is based on an initial disconnect between tough economic news and people’s chequebooks. “It was only in the last three months where they felt the impact. The vast majority of Canadians and British Columbians felt [the crisis] was overblown and exaggerated [in the media] and then it hit home.” • apetrozzi@biv.com
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