Analysis Group: Vancouver Energy project adds 2 billion

29 August 2014 Consultancy.uk

According to an economic impact assessment from US consulting firm Analysis Group, the ‘Vancouver Energy project’ will provide a major boost to employment, adding more than 1,000 new full-time jobs and $1.6 billion in labour income during the first 15 years of operation. The conclusion of the economic consultants is clear: the project makes from an economic perspective good sense.

In line with America’s strategy to reduce its reliance on foreign oil, the US government has drafted plans to improve its oil infrastructure in the state of Washington. One of the plans, known as the ‘Vancouver Energy project’ aims at building a crude-by-rail uploading and marine loading facility in Vancouver (USA). By better linking the rail infrastructure with the ship network, advocates expect to improve the efficiency and safety of crude oil transport to West Coast refineries, where it will be converted into transportation fuels for American families and businesses.

Economic Impact - Vancouver Energy Project Employment

Socioeconomic impact study

To understand the impact of the project on the region, a number of socioeconomic impact studies have been commissionedover the past months. The most current and detailed economic analysis has just been released, and was conducted by Analysis Group, an international consulting firm with nine US offices and two international offices (Montreal and Beijing). The research concludes that the proposed Vancouver Energy terminal will deliver significant economic benefit to the region, in the long-run creating an average of more than 1,000 jobs annually.

The creation of jobs will, in combination with income and profits created as a result of the terminal’s impacts, provide the local and regional economy with an economic impulse of $2 billion, which amounts to $1.2 billion in present value. “Our analysis finds that the development of Vancouver Energy would lead to increases in employment, labor income and tax revenues. These reflect the direct employment and local business activity from Vancouver Energy’s construction and operation, as well as the multiplier effects as activity ripples through the region’s economy,” says Bruce Strombom, Managing Principal at Analysis Group.

Analysis-Group

Next steps

The report has in the meantime been presented to the Energy Facility Site Evaluation Council (EFSEC) – the body in charge of reviewing and permitting large, energy-related projects in Washington. Once EFSEC completes its thorough review process, which also includes key findings from other studies, it will make a recommendation to the Governor of Washington (Jay Inslee), who will subsequently make the final decision.

×

High employment drives deals to access fresh talent

09 April 2019 Consultancy.uk

The UK continues to have a historically low unemployment rate, resulting in a tightening employment market and demand for recruitment services. The industry topped £12.3 billion last year, while valuations continued to rachet up. There were were 32 firm acquisitions in the recruitment services space last year, up significantly on the previous five-year average.

Labour markets globally are tightening, particularly in developed economies. At the same time, access to top talent is becoming increasingly difficult to source, as demand for that talent continues to rise. Higher demand has been one of the key drivers for acquisitions in the space. New analysis of the recruitment M&A market, from consultancy firm BDO, looks at current trends and future projections for activity in the segment.

The UK employment rate has grown considerably over the past decade, with the number of NEET decreasing, more women joining the workforce, and older people continuing to work, among other trends. Participation rates hit more than 75% in 2018, up from around 73% in 2014. The unemployment rate dropped to 4.1% last year, the lowest level in more than 40 years.

UK Recruitment Market

 

The recruitment industry has enjoyed strong growth over the same period, with revenues increasing from around £8 billion in 2014 to £12.3 billion last year. However, the growth rate for the industry is expected to stall for the coming years – the firm is projecting annual growth of 0.1% to 2024. The stall reflects deep seated uncertainties stemming from the future of the UK, from migration to internal employment in an increasingly uncertain future.

According to the firm’s analysis of market trends for UK listed FTSE recruitment companies, their performance over 2018 outperformed the wider FTSE market by a significant market during some months – the end-of-year uncertainty hit both recruitment and non-recruitment firms with relatively equal strength. The drop partly reflects market sentiment about the future of the UK.

FTSE Listed Recruitment Firms Average EV/EBITDA Multiple

 

The study also considered the multiples growth, average EV/EBITDA multiples, over the past year – which has shown considerable ups and downs. The yearly average multiple of 10.4x was above that of 2017’s 9.9x – although a 26% drop at the end of the year was significant. The drop was tied to the relative volatility in macroeconomic conditions affecting the globe, though another major contributing factor has been Brexit and political instability.

Global M&A

The global recruitment M&A market was particularly active in the UK, with 32 deals last year – a five-year high, and well above the 17 recorded for second-place US. Deal activity in the UK was focused on expertise and capacity in industrial and technical sectors, reflecting skills shortages in those segments. The US was largely focused on healthcare-related M&A, representing 25% of their market.

Overall, of the 92 deals in 2018 (a 21% drop on 2017) generalist firms were the most in demand, at 25% of the total, followed by education at 14% and engineering & construction at 13%. Software saw relatively low demand, at 2%.Investment into the UK by country

In terms of investments made into the UK, domestic investment continues to be the most dominant, accounting for 24 deals. Japan made three deals, although Brexit is seeing the country become increasingly nervous about investment. The US accounted for two deals. The longer-term trend shows that domestic investment is up on 2017, hitting the highest level in five years, while the US has reduced its M&A investment into the UK.

Commenting on the results, the firm noted, “The latest report shows the recruitment sector remains strong and continued to grow through 2018 despite facing many challenges. Notwithstanding the personalised nature of these services, the market continues to evolve, seeing traditional recruitment firms utilising available technology along with new entrants showcasing innovative platforms.”

Related: High UK employment masks troubled economy.