Nanaimo’s first economic indicators report presents figures promising a rosy financial future for the region, but the devil might lie in the details, especially changing interest rates and availability of skilled labour.
The Nanaimo and Region Economic Indicators Report, presented by Nanaimo Economic Development Corporation, is being touted as a key component for evaluating the region’s economic and business climate, and a tool to attract industries and investment.
The report was produced by Meyers Norris Penny LLP over a five-month period at a cost of $50,000, and looked at questions like the size of the local economy. The report pegs the Nanaimo region’s annual gross domestic product at $3.86 billion, accounting for 2.1 per cent of the provincial GDP and one of the highest per capita GDPs in B.C.
“That is remarkable,” said Sasha Angus, corporation CEO. “When you compare Victoria on a per capita basis, we are more productive than Victoria, we are more productive than the Lower Mainland, we are more productive than a lot of places and so we finally know what the entire size of our local economy is.”
Nanaimo might be a per capita high producer, but the Victoria capital region’s GDP – more than $11 billion – is still nearly triple Nanaimo’s.
Nonetheless Angus said Nanaimo’s GDP figure and other economic data in the report provides a set of benchmarks to track the health of the local economy year by year and can also be presented to commercial and industrial job and tax base providers the city wants to attract to the region.
Net migration of people to and from Nanaimo is comparable to what is happening elsewhere in the province.
Angus said immigration will be key to growing the local economy. People are retiring from the workforce, particularly business owners, and it will be important to attract new entrepreneurs to Nanaimo by matching them with businesses potentially coming up for sale.
“We really want to make sure that immigration and people coming to our community is a key activity and key strategic concern for us to move forward for the next five or 10 years,” Angus said.
Growth of the knowledge based industries sector, such as high tech, research and manufacturing and software development, in Nanaimo has outpaced the provincial average since 2004 and as of 2011 provided 2,300 jobs in Nanaimo and totalled more than 3,400 jobs throughout the regional district.
The sector, across the regional district also grew by 6.4 per cent from 2006 to 2011, compared to a provincial growth rate of three per cent over the same period.
Knowledge based sector jobs, Angus said, command an average annual wage of $65,000.
Employment across all sectors has been rising since mid 2012 and Nanaimo boasts the fifth-highest growth rate among B.C. municipalities for the period between 2008 and 2012.
Nanaimo’s unemployment rate is 4.9 per cent, which is lower than the provincial average of 6.7 per cent.
Companies that choose to move or start up here will need a trained workforce ready for the jobs they offer. Those employees will have to be attracted from elsewhere as well as trained here to avoid a skilled labour shortage.
Nanaimo mayor John Ruttan said he is concerned about such a shortage.
“Skilled labour is becoming more and more of a shortfall and more training is needed.”
Ruttan, who has been in business in downtown Nanaimo since 1962 and has seen the economy change drastically over that time, said commercial space occupancy and other factors are cyclic, but he expects jobs and business occupancy will improve as the economy expands over time. He noted the report has come out at a time when the economy is improving and most indicators in the report are good. Ruttan said one factor that could ruin the positive outlook is an upswing in interest rates.
Ruttan said his confidence in Nanaimo’s economic future is buoyed by the statistics in the report and developments that could further bolster the economy, like the conference centre hotel and the foot ferry.
Nanaimo Economic Development Corporation will release quarterly updates along with major annual reports from here on. To view the full report, please visit Nanaimo Economic Development Corporation’s website at www.investnanaimo.com.