City of Penticton Industry Valuation Report

Posted: August 11, 2011

Penticton Economic Development Services
August 2011

Date: August 3, 2011
To: EDAC committee members
CC: Erin Hanson, Chamber Manager
From: David Arsenault, Economic Development Officer

Executive Summary
The purpose of this report is to address industry valuation in Penticton by quantifying the approximate economic impact of five general industry categories. This report uses 2006 census regional profile data provided by BC Stats and 2008 British Columbia labour market data to generate industry valuations. Industries are grouped into five sectors based on similarity, to simplify sector valuations. Valuations are approximated by identifying each sector’s contribution to British Columbia’s total gross domestic product (on a provincial scale), evaluating the City of Penticton’s labour force in each sector as a percentage of British Columbia’s labour force in each sector, and finally applying the resulting quotient to each sector’s share of total British Columbia Gross Domestic Product. The valuations are first evaluated by industry, and then aggregated into a sector total.

Upon review of the findings this report suggests that the largest contributor to the Penticton local economy is the Manufacturing and Innovation sector both in the percentage of workforce and the actual investment made into the local economy. A more detailed summary is included in the body of the report but for the sake of brevity the following table captures the overall findings of this report in addressing the economic impact by industry sector.

Introduction
Penticton’s industries can be grouped into five distinct sectors: (i) Tourism, (ii) Business, Finance, and Management, (iii) Public Services, (iv) Manufacturing and Innovation, and (v) Trade Services. The industries that make up each category are listed below.


The contributions of each industry within each sector to the local economy are approximated below:

Tourism
The Tourism sector employs 14.4% of all workers in Penticton , the third largest employing sector in the City. In 2010, room revenue in the City of Penticton was $25,943,000, up from $25,319,000 in 2009. Penticton’s 2010 room revenue made up 47% of all room revenue for the Okanagan-Similkameen, by far the largest contributor of room revenue in the entire region . In aggregate, Penticton’s tourism sector contributes approximately $166,716,000 to the local economy .

Professional Services
The Professional Services sector employs 5% of the total labour force in Penticton and is estimated to contribute approximately $311,722,000 in local GDP . The management of companies and enterprises industry is insignificant to the overall contribution to the local economy (it represents only 0.2% of the local workforce) and therefore is not included in the calculation.

Public Services
Penticton’s health care and social assistance industry employs 2,540 workers (12% of Penticton’s total work force) and contributes approximately $129,884,000 to the local economy . The education industry, employing 950 workers, contributes $56,347,000 to the local economy . Public administration, employing 1,015 workers, generates about 94,204,000 for the local economy . The utilities industry in Penticton employs 115 workers and generates approximately $30,938,000 for the local economy . The administration and support, waste management and remediation industry contributes about $35,922,000 to the local economy .

In total, Penticton’s Public Services employs 26% of the community and the sector contributes a total of $347,295,000 to the local economy.

Manufacturing and Innovation
The Manufacturing and Innovation sector employs 29% of Penticton’s labour force. The manufacturing and innovation sector makes up 26% of all sectors in Penticton , the single largest sector in the City. Penticton’s manufacturing industry adds an approximated total value to the economy of $180,566,000 . The construction industry adds about $88,500,000 to the local economy and employs 1,985 workers. Professional, scientific and technical services add $44,370,000 to the local economy . Agriculture, forestry, fishing, and hunting contribute approximately $26,824,000 to the local economy . Mining and oil & gas extraction contribute around $27,000,000 to the local economy .

In total, Penticton’s manufacturing and innovation sector contributes approximately $367,260,000 to the local economy.

Trade Services
Trade Services employ 20% of Penticton’s total labour force. Penticton’s retail and wholesale trade combined contribute approximately $22,837,000 to the local economy . Transportation and warehousing provide $57,302,000 to the economy .

In total, Penticton’s trade services sector contributes approximately $80,139,000 to the local economy.

Conclusion
Again the purpose of this report is to add some context to how sector industries contribute to the economic wellbeing of the community. While there has been some confusion on what is the key economic driver all these industries are essential for the local economy and that the City of Penticton is diverse when comes to its economic generation.

In our attempt to analyze the economic drivers in the City of Penticton we organized the data into five sectors: Tourism, Professional Services, Public Services, Manufacturing and Innovation, and Trade Services. This sector breakdown which is highlighted on page 2 of this report supports the categorization of the 2006 census regional profile data provided by BC Stats. We also used the 2008 British Columbia labour market data, the valuations have been approximated.

The largest contributing sector to the local economy, Manufacturing and Innovation, is valued at $367,260,000. Not coincidentally, this sector also has the largest workforce in Penticton, accounting for 29% of the total workforce. The second largest contributor is Public Services, which is valued at $347,295,000. The third largest contributor to the local economy is Professional Services, which is valued at $311,722,000. The fourth largest contributor is Tourism, which is valued at $166,716,000. The smallest contributor to the local economy is Trade Services, which is valued at $80,139,000. The total economic impact of industry in Penticton is $1,273,132,000.

Questions? Contact Penticton Economic Development

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