2018 Business Insights Report 201 2018 Business Insights ... and Development...2018 Business Insights Report 4 Profile of the Interviewed Companies In 2018, the Business Outreach Program

2018 Business Insights Report

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201


City of Prince George


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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


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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.

Documents

2018 Business Insights Report 201 2018 Business Insights ... and Development...2018 Business Insights Report 4 Profile of the Interviewed Companies In 2018, the Business Outreach Program