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BCAdvantage 2008; Business and investment across British Columbia Mainland/Southwest region: Boom but no bust Olympic buzz and construction activity are just two of the features of a strong economy in Vancouver and surrounding municipalities By Baila Lazarus Another banner year for construction, retail and tech has made the Mainland/Southwest region an economic powerhouse. As well, the two-year countdown to the Winter Olympics has boosted activity in all sectors, particularly for small- and medium-sized businesses that anticipate being suppliers, licensees or subcontractors to VANOC. Anticipated at bringing $10 billion to the province, the Games are already a cause for real estate owners to try their hand. One listing for a four-bedroom, two-level home in downtown Squamish was asking $25,000 for the 18-day period of the Games. As a national sponsor for the Vancouver 2010 Olympic and Paralympics, RBC Financial Group has launched a series of guides and seminars to explain how businesses, mostly in the Lower Mainland area, can get a piece of the large procurement pie. “It amazes me every day how much of our small and medium-sized businesses are actually international players,” said Betty MacLeod, senior manager, Olympic Business Development, RBC. “Being aware of what opportunities are here locally as a result of the 2010 Winter Games can actually help them into new markets in the future.” The number of businesses registering for opportunities on the 2010 commerce site (www.2010commercecentre.com) was expected to hit the 20,000 mark in 2008. But the Olympics are not the only thing driving trade in the Lower Mainland/Southwest region, which extends from the Georgia Strait in the west to Manning Park in the east, and from the U.S. border to Lillooet, and is home to more than 2.5 million people. The development of the Lower Mainland as a trading gateway between North America and Asia is prompting a variety of economic effects. In a 2007 discussion paper, the Vancouver Economic Development Commission concluded that the Pacific Gateway supports: •more than 27,000 jobs in the City of Vancouver; •provides more than $ 1.3 billion in wages and salaries; •adds more than $1.6 billion to GDP; and •contributes more than $2.6 billion to output. “The wages and salaries paid within the Pacific Gateway are also 52% higher than the provincial average,” the report states. “The economic power of the Pacific Gateway is driven by an integrated road, rail, sea and air system that allows goods to move freely and be distributed across the region. Goods movements have more than doubled since 1991 and are anticipated to increase a further 56% for trucks and 62% for rail by 2025.” Part of the goods-transportation sector, the Cloverdale-based Coastal Pacific Xpress Inc. (CPX) has been witnessing a 30% year-over-year growth. Last year was the first time that growth dropped – to 15%. High land prices have been a big challenge for the company, with average vacancy rates hovering around the 1.5% mark in the Lower Mainland. But the activity in the region has been strong enough to keep CPX from moving further east. “The trucking industry across North America is in a mild recession as an industry, everywhere except B.C. and Alberta,” said CPX co-owner Jim Mickey. “Greater Vancouver seems immune from it. The dollar exchange rate hasn’t had an impact.” CPX’s customers, which include Overwaitea Food Group, Future Shop Ltd. and Costco Corp., seem to be growing at the same pace as five years ago so CPX is growing as well. CPX brings in produce from the U.S. to distribution centres in the Lower Mainland and then trucks it to stores across Western Canada. It controls more than 300 highway trucks. The location in the Lower Mainland hub, close to the U.S. border and with easy access to routes east and west, suits CPX well. “Anything south of the Fraser River is an advantage,” said Mickey, “within the geographic bounds of Surrey is perfect, right in middle of Cloverdale.” The construction industry, buoyed especially by the many infrastructure projects for the Olympic Games, is also witnessing extensive growth. Although building permits in the Lower Mainland/Southwest region fell during November 2007, the year-to-date permits were still up over the previous year, according to a Vancouver Regional Construction Association (VRCA) January 2008 report. Permits in the region were up 3.3% to $7.219 billion in the first 11 months of 2007. In Vancouver alone, total building permits for the first eleven months of 2007 were up 4.7% to $6.48 billion. “2007 continued to be a very strong year for the construction industry throughout the province,” said VRCA president Keith Sashaw. “There are increases in all areas. Residential continued to be a strong year and we’re seeing a very strong commercial sector in the construction industry. We’re seeing very low vacancy rates in office space in the downtown core, which is usually an indication that people are going to be looking at building some office buildings.” Asked what the effect low housing prices in the U.S. was having, Sashaw said, “I don’t think we’ve seen any direct fallout in terms of the construction industry in Vancouver. Our commodities are in a strong demand. B.C. should be in great shape to weather through this little bit of an economic storm that’s happening in the States.” The biggest challenge facing the industry now is supply of skilled labour, Sashaw said, not only in terms of the tradespeople but also at the managerial level, such as site superintendents and the project managers. Positive moves by the federal government in opening up the doors for temporary foreign workers, bringing workers over on work visas and through the provincial nominee program, were all helping to address the issue, Sashaw said. “Obviously the construction industry is cyclical, we’re currently on the upside. But I don’t see issue of skilled labour challenges going away. When you take a look at the demand for skilled workers, just to address new projects coming on stream, we’re going to be needing 20,000 new people through to 2012, and when you take a look at the demographics of the industry, we expect to need another 25,000 to address the challenge of people retiring out of industry.” • Mainland/Southwest •Abbotsford •Burnaby •Chilliwack •Coquitlam •Delta •Gibsons •Hope •Langley •Maple Ridge •Mission •New Westminster •North Vancouver •Pitt Meadows •Port Moody •Richmond •Sechelt •Squamish •Surrey •Vancouver •West Vancouver •Whistler |
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