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October 28, 2020BUSINESS OPENING AND CLOSING, JULY 2020 Statistics Canada has updated data on monthly business openings and closures through June 2020.
A business will be classified as open if it 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 and July, the number of businesses started to recover, with gains in all provinces.
After reporting the largest gain among provinces in active businesses from May to June (as re-opening started), Nova Scotia's growth of active businesses slowed to 1.4% in July. Nationally, the number of active businesses was up by 1.7% with gains in every province, led by Quebec and Ontario.
Compared with February 2020, the number of active businesses was down 9.2% in Nova Scotia. National active businesses declined by 10.7% from February to July. The number of active businesses is down in all provinces from February to July, with the largest decline in Ontario.
Among cities (Census Metropolitan Areas), the decline in active businesses from February to July was most acute in Toronto, Windsor, Oshawa and St. Catharines-Niagara. There were 6.8% fewer active businesses in Halifax in July than in February, a more moderate decline than in the rest of Nova Scotia.
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 88.4% in Nova Scotia, down from 95.4% in Feb20. National continuing rates fell from 95.0% in February to 88.5% in April. As of July, Nova Scotia's business continuing rate has risen back up to 94.5% per cent while the national rate has grown to 94.3%.
Nova Scotia's business opening rate fell from 4.3% in February to 3.6% in April. In June, the Nova Scotia business opening rate increased to 9.5% as the economy re-opened and restrictions were lifted. In July, the opening rate slowed to 6.2%. Nationally, the opening rate declined from 4.5% in February to a low of 4.2% in March before rising to 7.5% per cent as of July.
The rate of business closing in Nova Scotia was 4.5% in February. This increased to 11.6% in April and has subsequently fallen to 5.0% in July. Nationally, the business closing rate increased from 4.9% in February to 11.5% in April. As of July, the national business closing rate was 5.2%.
The COVID-19 situation has impacted business sector industries to different degrees. Nova Scotia active business are lower in all sectors except utilities in July 2020 compared to February. Nova Scotia largest declines have been in arts/entertainment/recreation (-23.9%) and accommodation/food services (-15.6%). 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. Growth continued for active businesses in retail, while it slowed in accommodation/food and personal/repair services. There has been little recovery in the number of active businesses in arts/entertainment/recreation. There has been less recovery from the COVID-19 shock to Nova Scotia active businesses in wholesale trade, transportation, forestry/fishing, real estate/leasing and construction.
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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