Photo credit; New York Times
Despite a looming population, Canada has yet to see growth in the number of businesses that operate.
Statistics Canada (Stat. Can.) data shows active businesses were unchanged in July. With companies continuing to close faster than those opening, the problem may intensify as the global economy weakens.
Canada’s business community continues to show little progress. The country reported 936,904 seasonally adjusted active businesses in July, unchanged from the previous month. This was a slight improvement from a drop of 0.2% in June, and it’s a trend that’s become sticky recently.
“…the number of active businesses has not posted a positive growth rate since January,” notes Stat. Can.
Technically, they’re being generous. Seasonally adjusted active businesses have fallen 0.2% since January, and the current volume is like the number operating in November 2023. It’s not a crisis per se, but it emphasizes the weakness of households when record population growth is met with no new business.
The rate of businesses opening remains lower than the rate of closures. Stat. Can. reported an opening rate of 4.45% in July, adding roughly 41.700 businesses.
In contrast, the closure rate was 4.45% for the month, with 42,300 businesses closing their doors over the same period. It was the third consecutive month the closure rate came in higher than the opening rate, and things don’t improve until those two flip..
The Canadian business environment isn’t great by itself, but it highlights just how weak consumers feel right now. The country managed to add 504k people in the first half of the year, but there was virtually no growth in active businesses. That’s a lot of people who required no additional services. Either those population estimates have been significantly inflated, or households are poorer than we think.
Source: Better Dwelling
