August 2020 Edition:
In 2017 the South Island Prosperity Partnership (SIPP) started to gather data for a set of indicators that could inform the business and community leaders how the Greater Victoria regional economy was doing from a holistic, year-over-year perspective. This viewpoint, supported through generous sponsorship from Coastal Community Credit Union, enables decision-makers to set long-term goals and measure progress along the way. However, part way through production of our 2020 edition, the world completely changed. To adapt to this need for “real-time” data, SIPP launched this Monthly Economic Recovery Dashboard in May as a complementary tool of the annual index and as a way for the Rising Economy Taskforce to track the region’s economic fall-out and recovery in the months to come.
This third edition reports on the 11 indicators that were introduced in the May edition, with one indicator being removed (the monthly E.I. recipients which Statistics Canada has stopped reporting on) and one new indicator added (total business counts with employees in the Victoria Census Metropolitan Area). We are still assessing which new indicators are available that contribute to the narrative of our region’s economic state and recovery.
All indicators are tracked at the regional (Greater Victoria Census Metropolitan Area) level, this is Canada’s 15th largest metropolitan region and one of 35 CMAs across Canada.
• 11 of the indicators were updated since the previous edition, with one removed and a new one added.
• Of particular concern are that the data are starting to indicate that a “recovery” is taking place generally. This might be true for some sectors of the economy (local food for example), but the implications of the Phase 3 re-opening plan are only indication that some activities (and thus economic impacts of those) are resuming. A true regional economic recovery will take all sectors showing rebound, which will not be the case for some time.
• The indicators related to tourism and travel still clearly show the drastic and hard-hitting economic shock that this region is experiencing. Hotel occupancy is not only still way below seasonal normals, but the slight increase in the summer months is not garnering the revenues needed to sustain these businesses. Occupancies of 21% in the region are capturing average room rates of $138.85, far below 2019 figures of $223.26 and the revenues available per room are only at $29.16 compared to $200.38 in July 2019.
• Last month we were concerned about the rapid drop-offs of building permits normally approved throughout our region each and every month by local governments. Our theory was that this drop-off was due to process-related delays (e.g. municipal staff working remotely, lack of public hearings, etc.) and not due to sharp drop in market confidence. This theory appears to have been proven true as building permits reveal a rapid turn-around—and have even exceeded 2019 figures for same month last year.
• A positive signal we have received is the BC Transit ridership is starting to improve again. The May and June data might be as close to normal as we will get however since BC Transit ridership relies strongly on post-secondary student, most of whom will not be going to school in person this fall. As will be reflected in our Transportation Committee Report (being released August 26th as part of the Rising Economy Taskforce work), it is important that our region continue to support transit frequency and convenience, as this is essential to our workforce. Once convenience levels for riders decreases it creates a downwardspiral (less riders, means less funding, which means less riders, etc.) that is difficult to recover from in terms of political will.
• The unemployment rates being reported are still quite high, though Statistics Canada reports these figures using three-month moving averages. We still do expect this figure to decrease slightly due to the Phase 3 re-open plan. The data do not yet reflect that prediction. Nevertheless, as was stated in our July report, with the hard hits to the tourism sector (which causes a ripple effect through the retail, service and restaurants sectors), don’t expect to see anything like what we’ve grown accustomed to in the Victoria CMA in recent years.
• The biggest surprise from the data continues to be the real estate figures. With prices increasing as well as sale volume exceeding 2019 numbers (for July), this is a clear indication of two things: 1) this pandemic is impacting some households way more than others (high unemployment should rarely if ever result in stronger real estate market); and 2) many buyers still have the confidence in the market to make these purchases in the early stages of what could emerge as a prolonged recession. This is sign that, despite some troubling figures and economic impacts, our region is still perceived as a high quality place to live and invest.
• The new indicator added is a new statistic that Statistics Canada only started to measure starting in June 2020. This is total business counts (with employees). Our region had a total of 14,684 businesses (with employees) in June 2020, which gives us a benchmark to compare to once this pandemic has taken full effect. The next figure will be available in early 2021.
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