About 27,500 new enterprises anticipated this year
Michael Kane
Sun
CREDIT: Steve Bosch, Vancouver Sun The Urban Tea Merchant co-founder Karinna James with a tea pot used for exotic tea rituals.
New business formation in British Columbia is growing as fast as the economy and on track to reach a record 27,500 this year.
Buoyant conditions are fostering the most startups in real estate, rental and leasing, retail trade, construction, and scientific and professional services, says the Credit Union Central of British Columbia.
They include businesses like West Vancouver‘s The Urban Tea Merchant, a unique “lifestyle” store featuring tea rituals from exotic countries. It opened last September at The Village at Park Royal and is doing “very well,” said Karinna James who owns the business with her husband, Tom, a corporate turnaround specialist. The store employs 10 workers, including five full-time.
Retail sales over-all are the best in more than a decade, rising month after month by anywhere from six to eight per cent compared to the same month last year, said Mark Startup, president and CEO of Retail BC.
The good news is fairly consistent across all business sectors, with the exception of agriculture, according to the Canadian Federation of Independent Business. Farming across Canada is beset by the BSE border closure and still recovering from avian flu.
Some 41 per cent of small businesses in B.C. intend to increase full-time employment over the next 12 months, said Laura Jones, Vancouver-based vice-president of the CFIB. The majority of the business group’s 10,000 members in B.C. employ fewer than 20 people.
“Optimism in B.C. continues to be exceptionally strong,” Jones said Tuesday. “This is consistent with what we have been hearing from our members for the past seven quarters in a row.”
British Columbia‘s expanding economy is evident in both the rising number of operating businesses and declining business bankruptcies, the credit union central states in its weekly economic update.
Incorporations are steadily trending higher and are on pace to jump between 7.0 per cent and 10 per cent this year to about 27,500, handily beating 1994’s record level.
Business failures are also likely to break 1994’s record low mark and come in at around 800, about 15-per-cent lower than last year.
The numbers are just another indication of a robust provincial economy set to grow by 3.8 per cent this year and 3.6 per cent in 2006, said Helmut Pastrick, chief economist of the credit union central.
“These are above-average growth rates and there’s a chance that we could see 4.0-per-cent-plus growth this year and even next year, quite frankly. It wouldn’t surprise me.”
Tourism has been one area of weakness in the economy but other sectors are doing well and that is expected to continue, said Jock Finlayson, executive vice-president of the Business Council of B.C.
“It’s onwards and upwards for the next year or so,” Finlayson said Tuesday.
Pastrick said the growth in incorporations augers well for both employment and self-employment. About 30-40 per cent of firms with no employees are incorporated.
By industry, he said net business growth in firms with no employees was highest in professional, scientific and technical services; construction; real estate; retail trade; and management of companies.
© The Vancouver Sun 2005
