Oil is down, but business is still good, say operators
While the low price of oil has pushed the Newfoundland and Labrador government to a large deficit in the coming budget, some business owners say things are going well, adding there is even a benefit to the low prices.
Big companies like Statoil and Suncor say they're in the province for the long haul, but some oil projects — including the White Rose Extension — have been deferred amid the sinking price of oil.
The provincial government has projected this year's deficit at $916-million, citing petroleum prices hitting a five-year low.
But not all people are seeing red, despite the low oil.
Steve Drodge, owner of Fast Signs in Mount Pearl, says business is actually looking up as some of his company's operating costs are down.
"Short term, it's better prices at the pumps obviously, which is great for a fleet of vehicles which we have. Most of our products are petroleum based materials and even the inks that we print, so I'm hoping that we'll see some price benefit from the reduction in price of oil," said Drodge.
While things are good for now, Drodge said there may be some loss of business in the future if things don't stabilize in the oil market.
"We'll have to see how it plays out obviously, but so far right now it's OK. Long term I think more so it'll be an effect on government spending for us, we do a lot of government work," he said.
"You know with government reducing it's spending, we probably will see a lot of restriction in many businesses. I'm just hoping we can ride it out."
More money to spend
Low gas prices at the pumps mean the average person has more cash at hand, and for Natasha Somerton of Satin Laser Spa, that means more people can afford treatments.
According to Somerton, the low price of gas is "a positive," since her business has had more people in for facials or manicures and the like.
"I'm seeing them [clients] more frequently. They're booking their appointments and actually able to keep them because they're not stressed with the prices of gas and they're able to keep those appointments," she said.
"People are saving on their gas and so they aren't spending so much there and can spend it elsewhere, and you just hear even amongst my sisters, my friends that, like, oh we can take an extra night out because I haven't spent this much on gas this week."
Joe Maynard, manager of Chandler Supplies, said his company supplies safety apparel to lots of businesses in the offshore, but that's not their only source of business.
"For us obviously we supply all their safety wear and that sort of thing to their people, so layoffs will effect our sales. Obviously, less people there means less safety wear needed. At the end of the day, a slowdown will eventually hurt us. It isn't right now," said Maynard.
He added that since his company supplies safety apparel to various clients, including the City of St. John's, things are still looking bright.
"Especially in the St. John's area businesses are still doing very, very well, and there's a need out there for our services and we feel we can ride this storm no problem."
Diversification key
For Chris Dillon, diversifying the province's economy is the key solution to avoiding an economic decline.
Dillon, the business development manager with Triware Technologies, said technology-based revenue streams could be a solution to balance out the province's "volatile oil market."
"Absolutely I think more people are certainly going to open their eyes to [how] we've been reliant, for lack of any other word, on the oil industry for a long time. There are other sustainable industries that can certainly balance things out."
Dillon added that both the Liberals and governing Tories have pointed out developing technology-based industries as a possible solution.