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November 26, 2020BUSINESS OPENING AND CLOSING, AUGUST 2020 Statistics Canada has updated data on monthly business openings and closures through August 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.
In August, activity business increased in all provinces except Newfoundland and Labrador (-0.4%) and New Brunswick (-0.5%). There was a 0.6% increase in active business in Nova Scotia and a 0.7% increase for Canada.
Compared with February 2020, the number of active businesses was down 7.8% in Nova Scotia. National active businesses declined by 9.0% from February to August. 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 August was most acute in Toronto, Windsor, Oshawa and St. John's. There were 5.6% fewer active businesses in Halifax in August 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 88.3% in Nova Scotia, down from 95.5% in February 2020. National continuing rates fell from 95.3% in February to 88.5% in April. As of August, Nova Scotia's business continuing rate has risen back to 95.5% per cent while the national rate has grown to 95.2%.
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% and fell to 5.1% in August. Nationally, the opening rate declined from 4.6% in February to a low of 4.3% in March before rising to 7.6% in June and declining to 5.6% in August.
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 4.6% in August. Nationally, the business closing rate increased from 5.0% in February to 11.8% in April. As of August, the national business closing rate was 4.7%.
The COVID-19 situation has impacted business sector industries to different degrees. Nova Scotia active business are lower in all sectors except utilities in August 2020 compared to February. Nova Scotia's largest declines have been in arts/entertainment/recreation (-21.9%) and accommodation/food services (-14.5%). These are also the same two industries with the largest business declines at the national level.
The August increase in the number of active businesses in Nova Scotia was most notable in administrative/business services and other services . There has been little recovery in the number of active businesses in arts/entertainment/recreation. Increases in construction and accommodation and food services were minimal in August.
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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