“What is Vancouver’s economy really based upon? For the answer, check out my newly devised ‘pickup truck index’.”

“I just left Vancouver, where every second vehicle on the road is a tradesman’s pickup truck, with the shiny metal tool box built into the box. All of these guys, I think, are driving off to their jobs building condo towers. I know it has often been wondered what Vancouver’s economy is really based upon? For the answer to that check out my newly devised ‘pickup truck index’.”
Heart of the World at greaterfool.ca 1 Feb 2012 11:37am

Posted because we’ve also noticed the number of these trucks, and considered their meaning and their fate.
– vreaa

26 responses to ““What is Vancouver’s economy really based upon? For the answer, check out my newly devised ‘pickup truck index’.”

  1. There are endless construction- and landscaping-related vehicles roaming the streets. Every day you see a new name. Today it was “Fifth Element” construction. Some dude saw the movie and named his company after it. And guess what, in Vancouver, it worked!

  2. Ive heard that construction at the old ritz carlton site is about to begin again. At the shangri la across the street half of the 02 units that will face the new tower are on the market. Some have been on the market for over 1.5 years. Nothings selling at all and every week a new listing comes on the market pushing the prices down even more. When the bubble bursts im curious as to what units at these hotel/condo towers will have to be priced at to justify the 1800$+ maintenance fees.

    • Yeah, but I hear the resurrected project will bear no resemblance to the original plan of a few years back (assuming it even gets off the ground). I guess, when in doubt make the overall project larger, dumb it down, then carve it up into itty bitty pieces. Now that the MSM has jumped all over the story of an imminent implosion of the Vancouver RE market, I am betting nothing of the sort will happen anytime soon. I figure these guys have a max 18-24 month window to get this packaged up (as is) and shuffled out the door before we start feeling the aftershocks again. Of course, if this endeavour proves to be successful, the very same MSM shills will be out in full force stating, “I told you so” once again, the RE market bottomed out in fall 2011 and that yet another great opportunity to buy has come and gone (and don’t miss out on the next chance to buy the f’in dip!)

      BTW, not sure your numbers re Shangri-La are remotely close to being correct though. There are only a few of these units on the market. That being said, they are just sitting there collecting dust at pie in the sky prices (which far exceed the original purchase price, however). To me, these are just condos like any other in d/t Vanc, small, noisy, nothing particularly special IMHO (other than the so called name possibly).

      The fact that several other projects around Gr Van have gotten the green light recently tells me the headwinds have probably subsided for the time being. Perhaps they have changed direction altogether? Time will tell…

      • 4902. 5502. 5702. 5802. 5902. And penthouse 1 that shares the same floor plan is currently available for 20 million as a pocket listing. Thats 6 out of 14 units in the estates section of the building that face the new tower. Thats definitely more than a few… but i agree with everything else that you mentioned.

  3. A by-product of cheap money and plentiful credit…
    All we’re doing is pulling future demand forward… and when the inevitable correction does happen, the solution will be… more cheap money and plentiful credit.

  4. Renters Revenge

    A Ford salesman once told me that western Canada is the biggest market in North America for the F150 pickup.

  5. relatively stupid post vreaa…maybe we should have a BMW index where cities are measured by having too many paper pushing office workers, because they add so much to the economy. Or how about government employed ford taurus owners? Or how about SUV driving mattress salesmen… Not everyone with a pickup truck is in construction you know…sorry but this picking on tradespeople stuff kinda ticks me off, especially because I’m in the trades and I don’t own one of these speculation inflated homes that everybody else seems to have been able to cash in on. You know who’s really making a killing in Canada, how about nurses who make $35 an hour and get whomping benefits. My 67 year old dad’s been in the trades all his life and his pension cheque last time was $186, and he doesn’t drive a truck!

    • Agreed. The entire post sounds pretty desperate. And I’ve not even noticed these trucks, let alone them being ‘every other car’. If you can’t find enough anecdotes directly related to real estate then maybe it’s because the market is pretty uneventful right now?

      • I thought this post was right on the money. These trucks are everywhere. HD is crazy busy these days (naturally, RONA is not). In fact, amazingly enough their stock price is back to the old highs again (pre 2008 crash levels). What does that tell you? Everyone either wants to be the next great handy man themselves or just wants to hire one.

    • Sterling/Mouse -> You guys are tetchy.
      RE/construction related activity in Vanc/LML/BC has gone from norms below 20% (about 16%) to well above 20%.
      This is part of the bubble.
      If you don’t think this is relevant to the RE mania….
      PS We have nothing specific against anybody in the industry.
      After all, “everybody is hustling for a buck and a dime” (JLennon)
      But it is what it is.
      When the mania implodes, lots of these guys will be out of jobs.
      Just the facts.

      • Aldus Huxtable

        What is interesting to note is that tradespeople from Alberta I know who have attempted to come to the “Greatest Place on Earth ™” were offered below 50% of their journeyman rates by multiple employers and were told “Why should I pay you $32, when I can pay some east indian $10?” that’s a direct quote I heard on speakerphone. How many of these construction builds whether it be propping up a Kits house with pallets and slamming another few suites underneath, to large tower construction is being done by unqualified and unsuitable tradespeople?

      • It is relevant, because it is one more example of the misallocation of capital and labour that is being steered towards real estate. And it is but one more anecdote highlighting how many people will be harmed – perhaps economically devastated – by the bust. I bet many of those trucks were purchases at 0% interest with $0 down. This means the crash could bring some auto dealers & auto financers to their knees too. And what if your business is renting jack-hammers and power tools to these guys? Items like this help one to consider just how far-reaching the bust will be when it happens.

      • Many of these trucks are lifestyle/status statements rather than necessities. Seeing a lot of them on the road is just indication that many people want to, and are able to, buy them. No delayed gratification here.

    • I did have a good laugh at this one, and appreciated the author’s humor. Most of us who picked on the unfortunate house-salesmen in this absurd time, are aware that half of them (11k /2) made no sale, around 20%-30% made some decent income to feed their families, and only a handful of them making all the obscene profits.
      With that said, I have a great deal of respect for “strataman”. Wish he is still lurking around. 🙂

  6. Here is a quick graph I made of Vancouver manufacturing and construction employment as a percentage of total employment since 1996.

    In 1996, construction employment made up 6.6% of the working population in Vancouver compared to over 8.3% now. If memory serves me correct, the national historical average for the last 3 decades is about 6%.

    Manufacturing has dropped from 11.1% to 7.4%. This is a common theme around the country.

    • Wow.
      100% increase in the contribution of ‘construction employment’ since 2003, which happens to have been the point at which the bubble clearly got underway.
      And to think that some people see this as irrelevant…

      • I don’t think it’s irrelevant when presented the way you just did – with hard statistics. “I see lots of trucks with shiny boxes on them” isn’t such a compelling argument. There’s a big difference.

    • john mf'ing galt

      starbucks doesnt count as manufacturing? fuhhhhhh…

  7. There was a new vehicle bubble in the U.S. at the same time as the housing one. Same loans to unqualified buyers. Same buyers maxing out their purchase price rather than buying rationally. This didn’t contribute directly to the crisis as much as housing did because you can move a vehicle to find a buyer for it. It contributed to the crisis after a lag due to market oversaturation.

    Short version: If you dream of owning a nice contractor’s pickup-truck. Save your nickels because in about 10 months you can pick up a used one for a song.

    • Exactly. The government was forced to bail out GM and Chrysler shortly after it bailed out the banks. Even the Canadian government had to bail GM and Chrysler’s Canadian operations out, or risk losing the plants entirely.

  8. The Toronto Star featured people looking for work. There was one guy who poured his savings into “Classics” and can speak and read Latin. How much of a job opportunity exists for that? None, apparently (why doesn’t he go into teaching at a university level?) Anyways, he is now looking to get into the construction trades. Yes, that can go with your real estate boom and career change categories: http://www.thestar.com/business/article/1117326–smart-educated-experienced-and-still-looking

  9. I see this as more of an indication of the tepid job market in the lower mainland. There are very few opportunities for young people to enter skilled professions and get ahead or even get hired. The flipside is joe jobs, cash jobs and labor seem to have higher returns to investment than going to university and leaving with 4 years of no income and a pile of debt. Since Kindergarten our parents and teachers tell us education is the key to living a happy properous life, but just the other week I saw Kevin Evans, now working for the Industry Training Authority on the news pumping up trades as the future to our economy. So basically the new plan is Vancouverites are being disenfranchised from their own city and economy and being sent up North or Alberta to drive a mining truck or bulldozer so we can pump out natural resources (coal, oil, iron ore, lumber) off to China. Then the Chinese making a killing off creating value added producted from our resources can park their money and family in Vancouver, buy 5 single family homes, declare little no income, pick up CPP, OAS, HST rebates and live in “The Best Place on Earth” while us Vancouverites are either reduced to servitude with effectively falling income, or internally displaced people in our own country.

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