Economic bubble shields Kingston businesses

Local business owners have ‘cautious optimism’ they’ll weather the storm of the recession

Brian Lipsin, owner of Brian’s Record Option on Princess St. says his business has prospered despite the economic downturn.
Brian Lipsin, owner of Brian’s Record Option on Princess St. says his business has prospered despite the economic downturn.
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As store owners sit idly by and public workers grapple with budget cuts all over Southern Ontario, Kingston may have found a way to remain relatively impervious to the economic downturn gripping the world.

With its thriving military, health care, correctional and educational, Kingston’s economy is supported and generally faring quite well, director of Kingston Economic Development Corporation’s John-Paul Shearer said.

“The economic downturn never really greatly affected Kingston because of our strength in the public sector and diverse private sector. It gives a very strong foundation,” Shearer said, adding that the types of businesses based in Kingston contribute to the city’s financial well-being.

“We don’t have a heavy manufacturing industry, contrary to Southwestern Ontario, who was hit very hard because that was many of its cities’ largest industry,” he said. “That’s not to say we weren’t affected, we did lose some companies, but we didn’t lose the numbers of jobs as in other cities in our province.”

Prior to the time the recession began to take hold, the city had the good fortune of a significant increase in employment. The city’s employment growth rate was 4.8 per cent in 2008, which helped the city add 4,000 jobs in the scientific and professional sectors.

The economic downturn is a wake-up call for local businesses, Shearer said.

“This has taught businesses to watch the cash flow coming in and out, to be more prudent and cautious while keeping an eye on the importance of having a large portfolio of material,” he said. “Our belief is that if we can have a strong local supply chain with vibrancy and sustainability, we won’t be as dependent upon external markets during economic downturns.”

With the U.S. suffering the recession’s effects the most, fewer tourists have made it north to Kingston this summer. Despite the lapse in visitors, Shearer said the locally-buying Kingston base is a major boost to the economy.

“The local economy has been very strong and supported. The hospitality, restaurant and retail sector have indicated a positive message. However the other side is that since people were traveling less, fewer visitors were coming in and some smaller business felt the effects of the decline in American tourists,” he said. “The reaction to this was a stronger focus on a regional market rather than aiming to draw people in from the States.”

Cyndy Gibson, co-owner of Kingston clothing stores Agent 99, Blueprint and Three Boutique said keen and informed business owners are important during a recession.

“I’ve been buying very shrewdly,” she said. “It’s extremely important to think things through and think about whether or not a certain item is going to sell and if it has value rather than if it fits into a trend.” Gibson said her stores saw a slight drop in sales and a small change in the items people are buying.

“Two years ago it was very much an ‘I’ll take it’ sort of atmosphere. Now, people buy more items that are cheaper rather than splurging on one pair of expensive jeans.”

Despite Kingston’s strong local base, Gibson is realistic about owning multiple independent businesses downtown.

“You can’t always predict, so I’m cautiously optimistic,” she said. “It’s great if you’re a local family business, but you have to have value in what you’re buying, It’s still a consumer-driven economy and we have to, as independents, stay really current and with our ears to the local ground.”

No one knows better than Kingston shopping district veteran Brian Lipsin, the owner of Brian’s Record Option. Last year, Lipsin sold more records than any other year in 30 years of business and said sales continue to climb.

“The recession had a very positive effect on my business, though I think it had to do with what’s happening with vinyl and records as an alternative to CDs and downloading.”

A stable member of the Kingston community, Lipsin is a realist when it comes to the trials and tribulations of business.

“After 30 years you’re prepared for things to happen. You can’t stay on the top of the world for long. “I think Kingston has been isolated and insulated because of its governmental institutions. I don’t feel that too many people lost their jobs,” he said. “I believe it was more of a psychological reaction for people to panic at the idea of a financial crisis, in reality it’s far too easy to blame economic loss on a recession.”

Shearer said the city’s capital projects indicate an economic upturn.

“Our belief is that the economy is beginning to recover and that by the end of the year people will be back up and running with the financial sector on recovery.”

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