A new year ushers in new opportunities and perhaps new challenges. As one year draws to a close, a new beginning opens new possibilities.
Personally, I feel 2015 has potential to be a great year. For many this will be a difficult year of transition as the economy will be in a period of adaptation. That said, many businesses have been suffering and have adjusted to the current situation. From this position they can realign business models and effectively engage in this environment while planning for the future.
A few considerations to ponder as we ring in the New Year:
The reversed phenomenon of Eastern Migration. With energy losing its status as a precious commodity, surplus inventories and no appetite to reduce supply in an environment of decreased demand; oil will see a sub $45/ barrel price. Under these circumstances we are going to have a lot of families reunited as workers await callbacks. There will be both positive and negative impacts to this changing labour and financial situation.
Declines in the growth rates of our strongest provincial economies will result in a trickle back of equalization transfers. This won’t be felt immediately, but it can be anticipated. Get ready for the austerity measures we have thus far avoided.
Also on the energy front, 2015 will be an important period for increasing access. There will be announcements on both a capacity increasing third cable to the Island as well as confirmation of a new supplier through Quebec.
A combination platter of circumstances will result in 2015 being the year of the selfie. Not an arms-length photograph, but rather a move to self-employment. Born of necessity, but with great promise to see our economy diversify and expand in new directions. All the experiences and skills of repatriated Islanders from the energy pockets combined with the enthusiasm and perspectives of newcomers; we will see a surge in start-ups in the coming year.
I do have concern for multi-unit residences. The vacancy rate has been structurally high for sometime and there remains a noticeable overcapacity. Renters continue a flight to quality with some properties severely challenged to maintain tenancy. I suspect we will see owners exit these properties, and in some cases at below market values, as equity is converted to near cash substitutes for retirement.
The decline in oil will have consequences on our federal transfers, but in the short-run it has been a windfall for energy consumption. This should translate into stronger tourism numbers this coming year with increased air traffic from US destinations. This would be a great year for direct seasonal flights from more than one US hub; perhaps New York and Boston concurrently. Local business owners should take advantage of these direct connections to open export markets with the present dollar disparity to US currency.
I am also looking for exciting announcements from our emerging sectors. The growth industries of bioscience, information technology and aerospace all have exciting new leadership to chart new directions. Each of these industries will show innovation and growth despite local and domestic economic lags. Our greatest growth rates will be from these sectors.
To primary sectors; I have concern for the future of the seafood processing industry in the absence of accessible labour or investments in technology. On the eve of an election I expect a relaxation in foreign recruiting restrictions thus ensuring production for 2015.
On the agricultural side, with the loss of one processing facility the entire agricultural eco system is under threat, this will be leverage for key players in this industry. Unmanageable demands will be accepted in an election year thus preventing cataclysmic devastation to this primary industry.
Many challenges, and with challenge comes opportunity. Having become accustom to adversity I believe 2015 will be a great year of awakening and refocus for many Island companies.