At the Atlantic Provinces Economic Council (APEC) annual Business Outlook conference in Charlottetown, business leaders met to hear about how PEI’s economy fared in 2018 and how it is expected to perform in the future.
APEC reported that PEI’s economy grew by 2.2 percent last year. “The Island’s higher population elevated household spending and residential investment, but non-residential investment declined,” says says Fred Bergman, Policy Analyst, APEC. Export growth has improved since the Outlook conference, and is now marginally positive.”
In 2018, PEI’s employment, retail sales and residential investment growth led the nation, and the Island’s population growth was tied with Ontario for the fastest growth,”
APEC’s 2019 forecast for PEI
- Positive gains in population support GDP growth of two percent in 2019, although weaker investment, tourism and exports will limit growth. Slower growth in 2019 and a changing economy with some new industries such as AirBnB and cannibis, and the continued rise of the digital economy.
- Less uncertainty with Canada’s economic relationship with the US as the new USMCA trade agreement is ratified.
“From August 2017 to August 2018, home construction investment grew 42 percent in value, the highest growth in Canada,” says Fred. “Retail sales grew almost five percent over the same period.”
In 2018, employment growth was over three percent. However, real wages declined by almost 0.5 percent up to July 2018. PEI intends to raise the minimum wage to $12.25 on April 1, 2019, reduce the small business tax rate, raise the personal tax exemption amount, and raise the food and shelter allowance for those on social assistance, all of which will increase incomes.
Population growth affects construction
PEI has led Canada in population growth over the last two years. That growth will lead to more investment in public infrastructure and housing, which will require more workers. “In 2019, we predict employment to grow by about 1.5 percent and retail sales to grow 3.5 percent.”
Fred reported strong growth in the sale of furniture and building supplies, which relates to the rise in residential construction. Housing construction on PEI grew by about 3.5 percent in the first three quarters of 2018. In 2019, housing starts should be up again, due to the provincial housing strategy that plans to add 275 affordable housing units.
“The number of vacant jobs on PEI in the second quarter of 2018 rose to 2,900. There were labour shortages in retail, construction, administration, waste management, accommodations, and food services.”
According to the PEI Economic Update, 2018, labour shortages, an issue in 2018, are projected to continue into 2019 in numerous industries, including construction, aquaculture, fish processing and agriculture, retail sales and accommodation and food services.“Shortages may encourage more businesses to invest in automation to reduce their reliance on labour,” says Fred.
Export growth on PEI
“The amount of exports from PEI to India and China is growing. There has been a two to three percent increase in exports to the European Union due to gains in aerospace, chemical products, and medical supplies. There has been a three percent increase in exports to the US, mainly in aerospace, table potatoes, frozen blueberries, and chemical products.”
From September 2017 to September 2018, PEI’s French fry exports were down four percent and lobster exports were down 12 percent. Fresh potato exports were up 41 percent, blueberry exports were up 58 percent, and aerospace products were up 10 percent. The bioscience sector on PEI had annual revenues of about $240 million in 2017.
Check the PEI Economic Update 2018 at www.princeedwardisland.ca/en/publication/prince-edward-island-economic-update-2018.
Two businesses use technologies that improve their performance and outline hiring needs in their industry
Aspin Kemp & Associates (AKA) has been in operation since 1996. The company was formed by Jason Aspin and Neale Kemp, and is headquartered in Jason’s hometown in Montague, PEI.
The company designs systems, works with customers on solutions, manufactures and tests products, and installs and maintains them all over the world. In 2017, MAN Energy Solutions purchased a 40-percent stake in AKA.
Jared MacDonald, Sales Manager, AKA, talked about two projects being developed at the 100,000 square foot manufacturing facility in Pooles Corner. The Deep Water Class is the world’s first drill ship that can use the energy created by moving up and down with the waves and put it into the operation of the ship or store it.
They are also working on a land-based microgrid system using traditional and renewable energy sources like solar, wind, and thermal.
“Every system we sell can be monitored remotely, so that engineers on PEI can access data generated in Singapore or Korea or China,” says Jared. “That technology allows us to service global interests right here from PEI.
“Human resources are one of our top concerns. Our company is a technically focused system solution provider, so recruiting to keep the company on the cutting edge has been a challenge. Of our 100-plus employees, we have people from all over the world who speak over 20 languages. To continue to grow, we are working with government and educational institutions to find the right talent.”
For more about Aspin Kemp & Associates, visit www.aka-group.com.
Using technology to maximize profits
Christie Neate is the Portfolio Revenue Manager for InterContinental Hotels Group, which represents 800,000 guest rooms across 100 countries. Christie manages revenue for 15 hotels across Canada, from Deer Lake NL to Victoria BC, including the Loyalist Country Inn and Conference Centre in Summerside.
Working from her field-based home office, she manages rates and inventory in an effort to maximize profits. “Because the technology has come so far, so much more data is available to make effective decisions. I can manage top line room revenues without stepping into their respective markets.
“On a daily basis, I can look at competitive market intelligence, inventory levels, and channel management, and allocate those correctly. This type of role did not exist 10 years ago. New technology has made it possible to collect and analyze data on a much wider scale.
“The technology surrounding our industry will continue to evolve. Today, guests can enjoy an entire hotel stay without engaging with our onsite employees and team members. Guests can book a reservation, check in and access their guest room with a mobile device, receive the invoice electronically and formally check out of a hotel with technology such as apps and email.
“The size and scope of our traditional Front Desk model is changing, and that is something we can be optimistic about. The changes will allow our Guest Services Team to be more engaged with our travellers, outside the traditional check in/check out experience.
“There is a question of what will happen to jobs when these changes are implemented. We need to make sure our employees are comfortable with the changes and training is available. We also need to embrace these changes and find new and innovative ways for our team members to engage with our guests.
“One of our industry’s biggest issues is human resources and labour. Our businesses are open 24 hours a day, seven days a week. It is a challenge to make sure we have the best practices and policies so that staff can balance work and life safely and effectively.”
Hardest positions to fill
“Night auditors work 11 pm to 7 am, and may have issues around safety and security. They also need to be guest focused and very efficient in accounting practices. They balance a days’ worth of transactions across all outlets.
“Room attendants have the hardest job in my opinion. It is hard physical work, and the industry has an aging workforce. There will soon be a gap when our present room attendants start to retire, and we will struggle to find those who want to do that type of work in the same capacity as it was done in the past.
“We are always looking for ways to close the gap on this labour shortage. We have increased training, created mentoring opportunities, and engage with our various brands, design teams and suppliers to ensure our guestrooms are the most efficient to service, and that they have the best tools to do the job. We are also changing the expectation of how many rooms can be done per shift.”
Advancing in the tourism industry
Christie grew up working at her family’s two hotel properties in Baddeck, Cape Breton. She attended Dalhousie University in the Bachelor of Commerce program, completed a college Tourism & Hospitality program and has her AHLEI designation.
After school, she worked at a 352-room hotel property in Halifax. “I then moved to Moncton and worked for three years as Guest Services Manager for an IHG property. That is where I found my mentor, who was doing revenue management. I realized that I could help my industry in a new way, and make my hotel as profitable as possible.”
After that role, she worked for a PEI-based company for seven years in roles in the Rooms Division, Revenue Management, and Operations for a multi-brand portfolio of hotels. “I crossed paths with my mentor again, who told me about the wonderful opportunity with IHG.
“Our team of 12 does revenue management for 184 properties in Canada, totalling 25,500 rooms. There is a demand for more people in this position. You can combine your love of the hotel industry with a passion for business. Although property level roles are crucial in any hotel, operational, financial, or organizational roles are other interesting choices in the industry.”
Tourism groups on PEI
- Tourism Industry Association of PEI: www.tiapei.pe.ca
- Choose Tourism Job Board: www.choosetourism.ca
- Meetings and Conventions PEI: www.meetingsandconventionspei.com
For more information about Intercontinental Hotel Group, visit www.ihg.com.