In October 2022, the number of active businesses declined by 0.3% (-2,563), following three months of no growth or negative growth. Excluding the beginning of 2020 with the onset of the COVID-19 pandemic, this was the first time on record that the number of active businesses did not post positive growth for four consecutive months, said a report released Monday by Statistics Canada.
Ellie Burgin
“The contraction of the number of active businesses in October 2022 was due to the decline in the opening rate from 4.6% in September to 4.2% in October, combined with the slight increase of 0.1 percentage points in the closure rate (4.8%),” said the federal agency.
“The number of active businesses dropped or was little changed in all industries in October. The decline of the overall number of active businesses was mainly driven by contractions in retail trade (-0.5% growth rate; -432 change in active businesses) and accommodation and food services (-0.5%; -338). They were followed by other services (except public administration) (-0.5%; -322) and construction (-0.2%; -301).
“The variation of the number of active businesses in October is in line with the obstacles that businesses are expecting to face over the fourth quarter of 2022. According to the Canadian Survey on Business Conditions, the major obstacles businesses are expecting to face over the fourth quarter are rising inflation (58.4%), rising cost of inputs (48.1%) and recruitment and retention of skilled employees (41.7%). Businesses in retail trade (74.6%) and accommodation and food services (71.3%) are more likely to see inflation as a potential issue. Construction is the industry with the fourth-highest share of businesses expecting obstacles related to rising inflation (61.3%) and the second highest regarding recruitment and retention of skilled employees (52.0%).”
The report said the decrease in the business opening rate was largely driven by the decline in the re-opening rate (-0.3 percentage points), whereas the entry rate held relatively steady. The business opening rate remained below its 2015-to-2019 historical average of 4.7% for the second consecutive month. The decline was led by professional, scientific and technical services (-0.4 percentage point change in opening rate; -477 change in business openings), followed by construction (-0.2 percentage points; -302), transportation and warehousing (-0.6 percentage points; -291) and retail trade (-0.3 percentage points; -274), it said.
“October was the third consecutive month in which the business closure rate settled above its historical average. The business closure rate changed little in most industries from September to October. Accommodation and food services (+0.3 percentage point change in closure rate; +168 change in business closures), construction (+0.2 percentage points; +155), professional, scientific and technical services (+0.1 percentage points; +128) and other services (except public administration) (+0.1 percentage points; +100) drove the slight increase in the overall business closure rate,” said StatsCan.
“With the exception of arts, entertainment and recreation (1.8% exit rate), which posted a 0.2 percentage point increase from March to April 2022, the exit rate dropped or held steady in all industries. In most industries, the exit rate was within 0.2 percentage points of its respective historical average. The industries in which the exit rate was furthest from and higher than its historical average were transportation and warehousing (2.7% exit rate vs. 1.5% historical average), real estate and rental and leasing (2.4% vs. 2.0%), professional, scientific and technical services (2.0% vs. 1.7%), and arts, entertainment and recreation (1.8% vs. 1.5%). The exit rate was below its historical average in mining, quarrying, and oil and gas extraction (1.5% exit rate vs. 1.9% historical average) and accommodation and food services (1.2% vs. 1.6%).”
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
About Us
Canada’s Podcast is the number one podcast in Canada for entrepreneurs and business owners. Established in 2016, the podcast network has interviewed over 600 Canadian entrepreneurs from coast-to-coast.
With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.
The commitment to a grass roots approach has built a loyal audience with over 120,000 downloads and thousands of subscribers on all our social channels and YouTube. Canada’s Podcast is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story.
