OTTAWA
,
October 30, 2023
(press release)
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The business opening rate decreased for the second consecutive month to 3.9% in July, 0.8 percentage point below its average before the onset of the COVID-19 pandemic. In July, the opening rate was at its lowest level on record. The business closure rate edged down 0.1 percentage point to 4.5%, slightly below its pre-pandemic level of 4.6%. Business insolvencies also dropped slightly from 371 in June to 346 in July. As openings were lower than closures, the number of active businesses fell slightly, by 0.1% (-1,359) in July. In the same month, payroll employment (excluding public administration) also fell 0.1%, while real gross domestic product remained relatively unchanged. The two components of the business opening rate decreased for a second straight month in July. The reopening rate dropped 0.4 percentage point to 2.5%, its lowest level since December 2015. The entry rate of 1.4% recorded in July was the lowest since May 2020. The reopening and the entry rates were 0.4 percentage point below their respective historical averages in July 2023. The decrease in the business opening rate was widespread across sectors in July. Construction (-821 openings; -0.6 percentage point compared with the previous month) drove the decline in the overall opening rate, followed by professional, scientific and technical services (-768; -0.6 percentage point) and transportation and warehousing (-615; -1.2 percentage points). The business closure rate changed little in most sectors, with the largest increase occurring in accommodation and food services (+145 closures or +0.3 percentage point compared with the previous month). Businesses in this sector were the most likely to expect obstacles related to rising inflation (74.7% compared with 56.6% among all businesses) and rising cost of inputs (68.2% compared with 44.7%)in the third quarter of 2023. These were also the two most commonly expected obstacles among all businesses. The number of active businesses dropped or remained relatively unchanged in all sectors in July. Construction (-0.6% growth rate; -762 active businesses), accommodation and food services (-1.0%; -639), and retail trade (-0.6%; -497) posted the sharpest declines in the number of active businesses. The series on temporary business closures and exits (or “permanent closures”) is now updated to include data up to January 2023 In January, the exit rate edged up 0.1 percentage point to 1.9% in January—0.2 percentage point above its historical average of 1.7%. Except for retail trade (1.6%) and educational services (1.5%), each of which posted a 0.3 percentage point increase, the exit rate held steady or changed little in all sectors in January. The exit rate was higher than its historical average in transportation and warehousing (2.5% exit rate compared with 1.5% historical average); real estate and rental and leasing (2.4% compared with 1.9%); retail trade (1.6% compared with 1.3%); and professional, scientific and technical services (2.0% compared with 1.7%). A new initiative for enhanced data A new table on monthly business openings and closures by employment size is now available. This is the result of a collaboration between Statistics Canada and the Business Data Lab. Industry Intelligence Editor's Note: This press release omits select charts and/or marketing language for editorial clarity. Click here to view the full report.
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