Before the Storm

Looking back at a year on the brink of recession.

Looking back at a year on the brink of recession.

The glory that was: that’s how this year’s list of the Top 100 companies could look in the midst of the current recession. Unemployment in B.C. today sits at 7.4 per cent, construction activity continues to languish and layoffs hit local tech companies, robbing the shine from the “golden decade” of economic prosperity that Gordon Campbell heralded following his government’s election to a second term in 2005. Due to a sharp downturn in the fourth quarter, GDP even sagged 0.3 per cent in 2008, the first decline since the dark days of 1982. 

Yet the full impact isn’t reflected in the figures for fiscal 2008, and already several sectors show signs of pulling out of the recession. Aggregate revenues reported by companies on this year’s list were up an average of five per cent from last year, outpacing the province’s performance as a whole.

Revenues for many companies continued to rise, regardless of economic sector. Glentel Inc. and Sierra Wireless Inc. posted growth of 30.6 per cent and 27.9 per cent, through sales of wireless services and technology. While commodities gyrated, miners New Gold Inc. and Eldorado Gold Corp. both posted double-digit growth. Chemical supplier Univar Canada Ltd. saw revenues increase 24.1 per cent. There were even bright spots in the development and forestry sectors, as Concert Properties Ltd. and Mercer International Inc. racked up revenue growth of approximately 59 per cent each.

Some smaller players saw substantial revenue growth. Homeware retailer Urban Barn Ltd., which reported revenues of $49.7 million, didn’t make the cut for the Top 100 list but was the fastest-growing private company, with sales increasing an impressive 275 per cent over the previous year.

But not everyone was lucky. The extreme swings in the value of Canada’s dollar, which reached a historic high of $1.10 versus the U.S. dollar before dropping back down to 82 cents by the end of the year, delivered blows to exporting sectors such as forestry.

Smarting from a drop in demand for its products in the U.S., International Forest Products Ltd. saw its revenues drop to $437.2 million, a 28.4 per cent drop from the previous year and the biggest of any public or private company to make the list this year.

Auto dealers, financial firms and media companies also took a hit, with the Dueck Group posting a 3.2 per cent drop in revenues, Raymond James Ltd. posting a 7.2 per cent drop and David Black’s Black Press Ltd. reporting $450 million in revenues, down 2.2 per cent from 2007.

While governments on both sides of the Canada-U.S. border mulled infrastructure projects as the key to delivering a stimulus to their flagging economies, with so-called green power projects touted as prime candidates for funding, B.C. companies harnessing alternative energy were edging up the Top 100 list. A cluster of companies including Day4 Energy Inc., Westport Innovations Inc. and Carmanah Technologies Corp. all made the list this year.

Food and beverage companies proved resilient in 2008. B.C.’s liquor traders posted growth in excess of six per cent in fiscal 2008, and while both the B.C. Liquor Distribution Branch and Mark Anthony Group see a moderation in some segments, they’re not bracing for negative growth. It seems people still have to eat and drink.

It’s the sort of resilience Peter Rezansoff of Vancouver’s ITC Construction Group takes to heart. With 40 years in the construction industry behind him, he sees the latest downturn as one more event. A major one, to be sure, but one more that will pass. While his sector is one of the hardest hit by the current turmoil, he remains optimistic.

“It will take some time to get through it. It’s not going to be overnight,” he says, “but we believe that there’s a brighter side.”