2013 Kimberley Economic Review and 2014 Outlook
2013 was an eventful year for economic activity and the outlook for 2014 is positive.
The initiation of First Saturdays proved to be a huge success with locals and businesses alike, by creating expectations of activity that encouraged consumers to gather in Kimberley. The monthly celebration of heritage, arts, and culture was led by the Kimberley Arts Council and supported by the City and other community organizations through in-kind contributions and complementary events on the First Saturday. These entertainment activities highlight the importance of co-opetition – cooperation in the business community to compete as destination Kimberley.
There are other reasons for optimism such as an upswing in construction and real estate activity. Building permit construction values rebounded significantly in 2013 compared to 2012 & 2011, an increase of 23% and 32% respectively, though still lower than 2008-2010. According to the Canadian Mortgage Housing Corporation, by September 2013 the number of real estate transactions had equalled all of 2012; Kimberley was the only community in the region to see an increase in the number of real estate transactions in 2013. Similarly, year over year growth in elementary-age enrollment was up 8.7% in 2013/14, following on growth of 10.2% in 2012/13, indicating a trend in continued population growth – the single most important indicator of long-term community viability. Year over year growth in the number of business licenses continues with 66 new licenses in 2013, an increase of 6.5%.
According to the Hotel Room Tax numbers, tourism activity in 2013 grew 9.3% over 2012, continuing the upward trend that began in 2011. A combination of uncontrollable events – marginal snow, Easter taking place over a weekend, and Spring flooding in Southern Alberta – muted activity somewhat. The transition from Harmonized Sales Tax back to a combination of GST and PST has skewed these statistics and the financial reporting cycle for accommodators collecting the tax. In the near term the return to PST should provide greater certainty for tourism consumers and small businesses.
Business succession and transition continues to be an area of concern, as the baby-boomer generation creeps into their 60s and proprietors seek to exit their businesses. In addition to several successful sales of anchor businesses in Kimberley, two businesses that participated in the City/Chamber sponsored Succession Planning Workshop Fall 2012 are confirmed to have successfully transitioned.
At a higher level, the regional forestry sector is being buoyed by a recovery in the American housing and continued growth in the Chinese market market that has pushed lumber prices to multi-year highs. Consistent demand in Asia for coal produced in the Elk Valley is good for Southeastern BC, while weak metals prices have taken the wind out of regional mineral exploration somewhat.
The Prairie Provinces of Alberta, Saskatchewan, and Manitoba are a source of many visitors to Kimberley, and are forecast to enjoy continued above-average economic growth over the next couple of years which will benefit the tourism economy and many Kimberley businesses that do business across the border. Growth in the American economy has exceeded expectations the last six months, which positively affects the broader Canadian economy, but combined with depreciation of of the Canadian dollar should boost tourism and stem the tide of consumer spending flowing to the USA.