Despite Lingering Winter, 2011 Outlook Brightens

Chemistry Consulting Group brought together leaders from Greater Victoria’s key industries for its annual economic outlook breakfast Feb. 23 at the Victoria Conference Centre.

That was the plan, anyway, before high winds and heavy snowfall across the region prevented two of those leaders, Chemistry principal Frank Bourree and Tourism Victoria CEO Rob Gialloreto, from appearing at the event. Their presentations were delivered by Chemistry co-principal Christine Stoneman and Tourism Victoria president Deirdre Campbell. Also on the agenda were VIATeC executive director Dan Gunn, Victoria Real Estate Board president Dennis Fimrite, and Sasha Angus of the Greater Victoria Development Agency.

“2011 is looking up,” Campbell said. “The phones are ringing, the Internet hits are coming.”

The conference centre, she said, is predicting a big rebound after a dismal 2010, which saw the number of delegate days drop by more than 42 per cent from 130,078 in 2009 to 74,992 last year. The VCC is already off to a strong start in 2011, having hosted the Federation of Canadian Municipalities’ Sustainable Communities Conference — the first time the event has been held outside Ottawa.

China is expected to be a major source of strength for the local tourism market. Campbell said Tourism Victoria is forecasting 10 to 15 per cent growth, per year, in the number of visitors from China over the next three years. TVic is seeing a “great amount” of interest from India and Brazil, she added.

Gunn used his turn at the podium to highlight the tech sector’s contributions to the local economy and dispel the notion that there’s little more to business in Victoria apart from tourism. The region’s 900-some tech companies directly employ 12,600 people and have an annual economic impact of $2.65 billion, he said. The sector’s revenues have not only doubled since 2000, but grew by more than $200 million through the economic downturn of 2008-09.

Despite the sector’s consistently strong performance over the past decade, significant barriers to growth loom. According to Gunn, these include: staff recruitment; limited access to “tech-savvy” funding; the sector’s “unknown story/lack of brand”; the need for guidance that goes beyond mentoring; unaffordable housing, and the strong dollar (“we’re losing margin and losing recruitment ability,” he said).

Gunn says Victoria’s technology companies have shown they belong in the upper echelon of similar North American clusters, but they lack an identity, like California’s Silicon Valley. To that end, he plans to spend more time in San Francisco over the next year on recruitment drives.

Wrapping up his presentation, Gunn said 2011 will bring “eight to 12 per cent growth” and “a probable surge in hiring activity.”

Fimrite devoted much of his presentation on the real estate market to the theme of stability, highlighting the fact that $3.2 billion was traded through the MLS system in 2010 — nearly a repeat of 2009. Overall sales in the residential sector were down by 19 per cent in 2010, but that came in the wake of a record 24 per cent increase in 2009.

“It’s unusual to see this amount of variation over the past three years,” Fimrite said. He pointed out that while the number of listings declined significantly since peaking near 5,000 in spring 2010, average prices are showing modest increases. These are “strong signs that point to stability in the market,” Fimrite said.

“We’re looking at a relatively stable period … it’s good for people getting into the market.”

Fimrite concluded his presentation with tongue planted firmly in cheek: “Victoria remains the destination of choice for people across Canada, primarily because of our lovely weather you can always count on.”

Angus’s turn at the dais was further proof that the ferociously wintry conditions were by no means a reflection of the mood of the business community as it looked ahead.

“We have benefited from the fact that we are more diversified that many other economies,” he said, giving an overall picture of the state of the economy heading into 2011. “And from a cost-of-doing-business perspective, we are exceptionally competitive.”

The region’s average income is expected to top $40,000 this year for the first time ever, Angus said, and retail sales are forecast to rise by nearly $300 million from 2010 to 2011. “Seattle would kill for those kinds of numbers,” he added.

Like Gunn, Angus said Victoria needs to market itself better as a place to do business, and forge an identity as more than a tourist destination.

“Our business brand needs a bit of work, but we have the numbers to back it up,” he concluded.