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September 28, 2020BUSINESS OPENING AND CLOSING, JUNE 2020 Statistics Canada has updated data on monthly business openings and closures through June 2020.
A business will be classified as open if had no employment in the previous month and then has employment in the next month and a business will be closed if it had employment the previous month and no employment in the current month. For opening and closing, the reason could be a permanent change (i.e. business exit) or temporary for reasons such as seasonal operations, capital maintenance, restructuring or the COVID-19 situation. Continuing business are those that had employment in both the current and previous month. Active businesses are the sum of continuing and opening business in the current month.
The number of active business declined sharply in every province in March, April and May. In June, the number of businesses started to recover, with gains in all provinces except Quebec and Manitoba.
Nova Scotia reported the largest increase in the number of active businesses from May to June, with a gain of 2.4 per cent. Nationally, the number of active businesses was up by just 0.1 per cent with declines in Quebec and Manitoba and little change in Ontario and Newfoundland and Labrador.
Compared with February 2020, the number of active businesses was down 11.2 per cent in Nova Scotia. National active businesses declined by 12.8 per cent from February to June with the largest decline in Ontario.
Among cities (Census Metropolitan Areas), the decline in active businesses from February to June was most acute in Toronto, Windsor, Oshawa, St. Catharines-Niagara and Montreal. There were 9.2 per cent fewer active businesses in Halifax in June than in February, a more moderate decline than in the rest of Nova Scotia.
The growth in the number of active businesses in Nova Scotia is attributable to a sharp increase in business openings (from 751 in May to 1,350 in June) as well as a decline in closures (from 1,376 in May to 972 in June).
The calculation for the opening, continuing and closure rate have been made based on the number of active business in the previous month. The rate at which business either opened, continued or closed can be examined to see how number of active business has changed.
Most businesses continue operating each month. At the height of COVID-19 related restrictions, the share of businesses that continued to operate from one month to the next fell to 88.2 per cent in Nova Scotia, down from 95.6 per cent in Feb20. National continuing rates fell from 95.1 per cent in February to 88.2 per cent in April. As of June, Nova Scotia's business continuing rate has risen back up to 93.7 per cent while the national rate has grown to 92.3 per cent.
Nova Scotia's business opening rate fell from 4.2 per cent in February to 3.5 per cent in April. As of June, the Nova Scotia business opening rate increased to 8.9 per cent. Nationally, the opening rate declined from 4.5 per cent in February to a low of 4.1 per cent in March before rising to 7.6 per cent as of June.
The rate of business closing in Nova Scotia was 4.5 per cent in February. This increased to 11.6 per cent in April and has subsequently fallen to 6.4 per cent in June. Nationally, the business closing rate increased from 4.9 per cent in February to 11.6 per cent in April. As of June, the national business closing rate was 8.1 per cent.
The COVID-19 situation has impacted business sector industries to different degrees. Nova Scotia active business are lower in all sectors in June 2020 compared to February. Nova Scotia largest declines have been in arts/entertainment/recreation (-25.4 per cent) and accommodation/food services (-20.1 per cent). These are also the same two industries with the largest business declines at the national level.
The June increase in the number of active businesses in Nova Scotia was concentrated in accommodation/food services, retail, wholesale, construction and administrative/business support services. There has been less recovery from the COVID-19 shock to Nova Scotia active businesses in transportation, forestry/fishing, real estate/leasing and manufacturing.
The source data is seasonally adjusted. The data may not aggregate due to firms being classified into multiple industry or geography.
Source: Statistics Canada. Table 33-10-0270-01 Experimental estimates for business openings and closures for Canada, provinces and territories, census metropolitan areas; Methodology: Business Opening and Closing
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