The rates of business openings (4.7%) and closures (4.6%) both edged down 0.1 percentage points in May, returning to pre-COVID-19 pandemic levels, says a report released Tuesday by Statistics Canada.
“As there were more openings than closures, the number of active businesses grew by 0.2% (+1,645) in May, following three consecutive months of contraction. In the same month, payroll employment (excluding federal government public administration) rose 0.1%, and real gross domestic product grew 0.3%,” said the federal agency.
Gustavo Fring
“The slight decrease in the business opening rate in May was entirely due to the 0.2 percentage point decline in the re-opening rate (2.9%). The entry rate edged up 0.1 percentage points to 1.8%. Both the re-opening and the entry rates were comparable with their historical averages.
“The business opening rate dropped or remained relatively unchanged in all sectors in May. The overall decline was led by professional, scientific and technical services (-503 fewer businesses; or -0.4 percentage points compared with one month earlier). Transportation and warehousing (-264; -0.5 percentage points) and construction (-254; -0.3 percentage points) also contributed to the overall decline in the opening rate. Despite the obstacles businesses are facing, the business sector has shown resilience, with a closure rate generally near its historical average of 4.6% since January 2021. Over the second quarter of 2023, businesses continued to expect challenges related to inflation, cost of inputs and interest rates and debt costs. However, fewer businesses expected supply chain issues during the second quarter (22.9%) compared with the first quarter (26.3%).”
StatsCan said the business closure rate contracted slightly or was little changed in all sectors in May. The slight decline in the overall rate was driven by construction (-0.5 percentage point change in closure rate; -509 change in business closures), accommodation and food services (-0.8 percentage points; -470) and retail trade (-0.3 percentage points; -214).
“The number of active businesses increased or remained relatively unchanged in every sector in May. Construction posted the highest growth in active businesses, with 762 more businesses (+0.6%) compared with the previous month, followed by retail trade (+360 active businesses; +0.4%) and accommodation and food services (+339; +0.5%),” it said.
Mario Toneguzzi
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 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)
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