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August 19, 2020STUDY: ECONOMIC IMPACT OF THE COVID-19 PANDEMIC ON CANADIAN BUSINESSES ACROSS FIRM SIZE CLASSES The COVID-19 pandemic has the potential to generate disparate economic impacts across firm size, with small and medium-sized firms likely experiencing relatively larger decreases in activity due to higher concentration in more severely impacted industries. For example, smaller businesses tend to be concentrated in sectors where close physical proximity is required, such as in tourism, transportation, restaurant, accommodation, and arts and entertainment. To help quantify these disparities, Statistics Canada has released a study on the economic impact of the COVID-19 pandemic on Canadian businesses by firm size. The study measures changes in hours worked by employees and real gross domestic product (GDP) for Q1 2020, across small (0 to 99 employees), medium-sized (100 to 499 employees) and large (500 or more employees) firms.
Compared to the average of the four quarters of 2019, Q1 2020 hours worked declined for both goods producing and services producing sectors. For the goods producing sector, declines occurred in all size classes, with the largest percentage decrease observed among small firms (-7.8%). On average for the services producing sector, declines occurred in small (-10.0%) and medium-sized (-13.7%) firms in Q1 2020, while an increase was observed for large firms (+2.8%).
Compared to the average of the four quarters of 2019, real output decreased 1.3% in the goods sector and 2.0% in the services sector (These estimates differ from growth rates reported by Statistics Canada in May, which compared quarter-over-quarter real output). On average, declines in real output in the goods sector occurred for medium-sized (-0.9%) and large firms (-2.7%), while real output increased for small firms (+0.6%). Declines in real output in the services sector occurred in all firm size classes, with the largest drop in real output observed in the small firm category (-3.5%), followed by medium-sized firms (-1.3%) and large firms (-0.6%).
Source: Statistics Canada, Economic Impact of the COVID-19 Pandemic on Canadian Businesses across Firm Size Classes
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