2018 business insights report 201 2018 business insights ... and development...2018 business...
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2018 Business Insights Report
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201
2018 Business Insights Report
City of Prince George
2018 Business Insights Report
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Contents
Introduction ............................................................................................ 3
Profile of the Interviewed Companies..................................................... 4
Characteristics of Participating Companies ............................................. 5
Ownership Change .................................................................................. 7
Employment ............................................................................................ 8
Training Needs ...................................................................................... 10
Sales and Market Performance ............................................................. 10
Facility Expansion .................................................................................. 13
Government Services and Infrastructure .............................................. 14
Local Business Climate .......................................................................... 15
Barriers to Growth ................................................................................ 17
Conclusions ........................................................................................... 19
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Introduction
Businesses are the primary drivers of job creation in the local economy, and they also strongly
influence the culture and character of the local community. With a focus on people, business
and community development, the City’s current Economic Development Strategy therefore is
informed by an understanding of the business community in order to foster a strong and
vibrant economy.
The business outreach program is an in-depth survey of companies on key indicators of the
challenges and opportunities they are facing. One on one meetings are held with businesses,
with discussions guided by a structured questionnaire. Results of the interviews are analyzed
and summarized in the bi-annual Business Insights Report. The 2018 Business Insights Report
summarizes this research and provides a snapshot of business perspectives that can be
compared to previous surveys. First initiated in 2014, this is the fourth report.
The Program’s objectives are to:
Build relationships with existing businesses
Demonstrate and provide support for local businesses
Address urgent business concerns and issues
Improve communications between the City and local businesses
Retain businesses and jobs where there is a risk of closure Over the long term the program aims to strengthen the business environment for growth and expansion by:
Increasing the competitiveness of local businesses by connecting them to resources,
information, and opportunities
Improving municipal services and processes
Advocating for the interests of local businesses at the provincial and federal levels
Developing strategies that address the immediate needs of the business community in
partnership with key stakeholders and service providers
2018 Business Insights Report
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Profile of the Interviewed Companies
In 2018, the Business Outreach Program surveyed 47 businesses from across the Prince George
market. All interviews were held between May and November. As with previous surveys,
companies are selected to approximate the industrial profile of the city based on employment.
Even though a broad range of companies participate in the survey, these results should not be
considered to provide a statistical representation of the business community. The sectors
studied in the 2018 survey make up approximately 66% of the total Prince George labour
force1. Health, education, public administration, utilities are excluded as they are primarily in
the public sector domain (28% employment). The resource based sectors of agriculture, fishing,
forestry and hunting and mining, quarrying and oil and gas extraction are also not represented
and comprise 6% of the city’s labour force.
1 Based on 2016 Census Survey Data, Stats Canada, NAICS by Census Agglomerations
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Characteristics of Participating Companies
Companies surveyed varied by size according to the number of employees. Compared to
business counts as reported by Stats Canada (June 2018) for BC, generally the distribution of
companies participating was similar to the province’s business profile. However, as with
previous years, micro-businesses (less than 5 people) were under-represented. This is explained
by the fact that it is often difficult for very small businesses to allocate time for participation in
the business outreach program. Also small businesses with between 20 and 49 employees
were over represented.
Most of the companies surveyed
were locally owned and operated
(75%), and many (20%) had more
than one location. The survey has
strong participation by companies
that have developed their
businesses in Prince George, and
expanded beyond the local
market. Two-thirds of the branch
office companies were national or
international.
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The age of businesses was diverse,
with companies at varying stages
of establishment. Nearly half of
the companies have been in
business more than 20 years, and
only one company (2%) was in its
first year of operation.
Nearly two-thirds of companies
indicated that they did not have
any other locations, making them
dependent on the local business
environment. This also may impact
their perspective in comparing
Prince George to other markets.
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Ownership Change
Seventy percent of companies indicated that there had been no ownership or management
change in the last five years, which is somewhat lower than in the 2016 survey (92%). Changes
were seen to have had a positive impact locally by nearly three-quarters of the businesses that
had experienced transition. No companies indicated that the change was negative. This
suggests that companies are overall stable, and positively adjusting to changes in leadership or
ownership.
Yes10%
No90%
Is an ownership change pending for this facility? (n=40)
Very few of the respondents
indicated that an ownership
change is pending. Of those that
answered yes, half were
considering this more than three
years into the future. Overall these
results supported the stability of
business ownership.
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Employment
More than half the companies indicated that they have increased employment levels over the
past three years. This was 22% higher than in 2016. Only 9% said that they have reduced
employment levels over this time, compared to 15% in 2016. This suggests strong opportunities
by companies for growth. It also indicates that there was a workforce available to realize this
growth.
Two-thirds of companies said they expect an increase in full time staff over the next three years,
reflecting further confidence in the economy and market conditions. This is very similar to the
2016 survey. This also supports the need to ensure that a diverse and skilled workforce continues
to be available to support business growth. Of interest, a greater proportion of companies
thought their employment would increase in 2016, than have reported an actual increase two
years later. This could suggest that they were overly confident in the market opportunities, or
that they experienced barriers to growth including available workforce.
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Most companies indicated that the number of unfilled positions was stable however there was a
significantly greater number in 2018 that indicated they are having more trouble filling positions.
There were many reasons given by those experiencing difficulty. Industry wide shortages were noted
with a specific mention of the need for truck drivers in the transportation sector. The need for
technically trained and experienced workers was reported across most industry sectors. Some of the
strategies being used include increasing compensation packages, social media advertising for
positions, recruiting from co-op programs, career fairs and hosting recruitment events, restructuring
to enable remote workforce, hiring internal recruiters.
Approximately half of the companies interviewed identified retention as a problem. For most
companies the reasoning was related to the nature of the work. Some said they were in a
competitive industry, or pay lower wages and lose employees to higher paying jobs or seasonal work.
In 2016, 94% of respondents said retention was not a problem suggesting that retention may be a
growing challenge for business.
Survey results on employment indicate the need to attract or train additional workforce is an
important issue, especially given the number of unfilled positions has been increasing since 2016.
Nearly sixty percent of companies reported that they
have unfilled positions, signalling a potential challenge
for business in the local labour market accessing talent
in order to operate or to grow their market.
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Training Needs
Nearly two-thirds (65%) of companies said that they were aware of trends, technologies, or
other changes in their industry that will require new skills. When asked to explain the changes,
almost all identified specific needs from increasing technology in their particular industry.
Virtual reality, social media, artificial intelligence, robotics, smart technologies were all
identified as having an impact on skill levels needed especially in the Information and Cultural
Industries; Professional, Scientific and Technical Services and Manufacturing sectors. Skills for
handling data collection and management, customer relationship management software,
working with web based and digital platforms were also identified with a need for staff to have
greater ability to adapt to new technologies. Soft skills in customer service and relationship
management are still in demand, as are business skills particularly in financial management,
marketing, sales tracking and warehouse management.
Sales and Market Performance
More than two thirds of companies are anticipating that their sales will increase over the next
year. Some of the rationale for this expectation was:
Higher demand in US for lumber
New markets and products in development, geographic expansion
Pursuing growth strategies more aggressively
Economy is strong
Better marketing strategies, brand development
Launching of new locations, online selling, especially for retail sector
Downtown development is increasing foot traffic for restaurants
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Consistent with stated reasons for an expected increase in sales, three-quarters (76%) of
companies said that the market for their product or service was increasing. Many companies
mentioned that their reputation has strengthened, leading to more demand within the existing
market and also generating expansion in new markets. Others said they are more competitive,
one indicated they had purchased a competitor. This is a significant increase over 2016. In 2014,
half of the companies surveyed said their market was increasing.
When asked to estimate the rate of growth,
companies were very optimistic with one
third predicting between 1% and 9% sales
growth, and more than 50% predicting over
10% growth.
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Most companies (64%) said that their market share was increasing, which is a major difference
from 2016 when only 6% of companies said this. In 2014, 38% of companies reported their
share of the market was increasing. Companies generally seem to feel confident of their
performance in the industry that they are in, that they are growing more competitive and
taking a larger portion of the overall pie.
When asked where their markets were
growing the fastest, about half of the
companies that responded named the
local market. Another third named the
regional or BC market, while 10% named
the Canadian or US market. A strong local
and provincial economy remains a key
driver for the growth and expansion of
Prince George businesses.
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Facility Expansion
The number of companies that lease space
was slightly more than those that own.
Although most of the companies that have
been in business many years own their
facility, there are also a number of
younger companies that have purchased
facilities.
One-third of businesses are planning to
expand in the next three years. All of
those companies said that they would be
expanding in Prince George, and most said
that their current site was not adequate
for expansion. Availability of financing and
skilled labour, market conditions, and
suitable premises were very commonly
mentioned as potential barriers to the
planned expansion. All companies
planning expansion said that it would lead
to a greater skilled workforce.
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Government Services and Infrastructure
Companies were asked to rate the quality of infrastructure and services that were relevant to
their business. Although only six companies identified it as relevant, access to port facilities
rated highest (Good). Alternatively, access to roads/highways was named by most of the
companies and was rated next highest. Inspections and licensing, road transport services,
water and sewer and market access were also rated on the high end between average and
good, and identified as relevant by most survey respondents. The lowest rated services were
development approval process, rail transport (only 4 respondents), and recycling. There was
little variation between the services rated, almost all between average and good. Even though
it is the lowest, the rating of development approval process has increased from 1.4 in 2016 to
2.1 suggesting an improvement in business perceptions.
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Companies were asked to bring forward suggestions for improvements to government
infrastructure and services. A few themes emerged:
Recycling – Recycling was mentioned most frequently, by about half of the respondents. The
need for glass curbside recycling, for more businesses in the waste/disposal business and more
competitive costs, the need for specific types of recycling (dangerous goods, organics, more for
plastics, compost recycling)
Development approval process – This was noted by several companies as an area for
improvement with delays, timeliness, need for responsiveness to land and property owners,
streamlining processes and reduction of red tape, costs of development, better process for
stakeholder engagement
Downtown development – There was mention of downtown improvements being positive and
favourable response to housing direction, need for more housing density and taller buildings,
and that it was positive to see more restaurants and coffee shops. Parking downtown was
noted by one company as an issue.
Local Business Climate
A total of 87% of businesses said
that they thought Prince George
was a good or excellent place to do
business, a strong endorsement
for the local business climate
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Even though their overall rating of the local business climate was between good and excellent,
businesses rated elements more harshly than in 2016. Colleges/universities were rated
between good and excellent, all other components were rated between average and good, with
workforce availability rated lowest (below average), a significant shift from 2016 when
workforce availability was rated 3.2. Overall ratings on business climate have declined from
2016 when half of all the ratings were between good and average. College/university remain
high, housing has dropped from the top rated factor in 2016.
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Businesses were asked to provide three advantages and three disadvantages to doing business
in the local community. Themes that emerged under each are as follows:
Advantages:
Smaller market, more repeat customers, sourcing local is valued
Cost of start-up and doing business, affordable cost of living
As a smaller community and hub you can grow your brand and expand market beyond
Great community support and personal networks
Post-secondary education
Disadvantages:
Distances from larger markets, freight costs, accessibility
Lack of skilled labour, available workforce
Perception, reputation of Prince George still sometimes negative
Unforgiving marketplace, negative publicity or experience can be devastating
Northern climate, cold weather can slow down business/construction
Barriers to Growth
Companies were asked if they thought there were barriers to growth in Prince George, 69% said
that they did. When asked to identify barriers to growth comments mentioned more than once
include:
Low/stagnant population growth
Market is too small, not enough growth
Transportation and shipping costs
Perception of Prince George as a place to live, it’s not for everyone
Poor air quality
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Eighty percent (80%) of businesses said that they thought the business climate was better today
than 5 years ago, a slight decline from 2016, and approximately the same as in 2014 (76%).
Businesses were more optimistic than they were in 2016 with 77% saying they believed the
business climate would be better five years from now, as compared to 2016 (64%). In 2014,
89% of businesses thought the business climate would improve.
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Conclusions
Prince George businesses remain confident and optimistic about their future opportunities of
doing business here. Findings from the 2018 business outreach program that can be used to
inform the City’s economic development strategy are summarized. These include:
1. Workforce availability – there appears to have been a deterioration in the availability of a
skilled and experienced workforce to fuel growth opportunities by companies as indicated
by currently unfilled positions, low rating of ‘workplace availability’ in the local business
climate, and greater challenges with retention compared to 2016. This may reflect a
broader trend nationally and internationally with an aging population and reduced skills
availability. Prince George’s population growth which remains low may also contribute to
this trend. Companies had diverse strategies for recruitment and are resourceful. Effective
workforce retention, training and recruitment programs remain important to support
economic growth opportunities.
2. Business competitiveness – Businesses appear to be gaining competitiveness as referenced
from growth in market share and anecdotal comments on improved brand, reputation and
market performance compared to 2016. This is very positive, it suggests that Prince George
has a strong local economy and is offering ‘proving ground’ for new and growing companies
to expand beyond the local market. This may also contribute to workforce demands for
higher skilled and experienced workers.
3. Expansion plans and access to resources – Many companies reported that they are planning
to expand in the near future pending the availability of labour, finances and in many cases
space. This will support further economic growth in Prince George and a stronger tax base.
4. Communication of the 2018 Business Insights Report – The report represents a 6 to 8 month
snapshot of the local economy and should be shared widely so that business service
providers can incorporate this information in their own operations. For example,
presenting this information to financial lenders and capital markets will demonstrate the
confidence and performance of Prince George companies in general. This can support
individual business expansion plans to help secure the availability of resources for growth.
Real estate and property management businesses may also value learning generally of
facility expansion, relocation needs.