The Daily
|
 In the news  Indicators  Releases by subject
 Special interest  Release schedule  Information

Monthly estimates of business openings and closures, May 2023

Released: 2023-08-29

The rates of business openings (4.7%) and closures (4.6%) both edged down 0.1 percentage points in May, returning to pre-COVID-19 pandemic levels.

As there were more openings than closures, the number of active businesses grew by 0.2% (+1,645) in May, following three consecutive months of contraction. In the same month, payroll employment (excluding federal government public administration) rose 0.1%, and real gross domestic product grew 0.3%.

The slight decrease in the business opening rate in May was entirely due to the 0.2 percentage point decline in the re-opening rate (2.9%). The entry rate edged up 0.1 percentage points to 1.8%. Both the re-opening and the entry rates were comparable with their historical averages.

The business opening rate dropped or remained relatively unchanged in all sectors in May. The overall decline was led by professional, scientific and technical services (-503 fewer businesses; or -0.4 percentage points compared with one month earlier). Transportation and warehousing (-264; -0.5 percentage points) and construction (-254; -0.3 percentage points) also contributed to the overall decline in the opening rate.

Despite the obstacles businesses are facing, the business sector has shown resilience, with a closure rate generally near its historical average of 4.6% since January 2021. Over the second quarter of 2023, businesses continued to expect challenges related to inflation, cost of inputs and interest rates and debt costs. However, fewer businesses expected supply chain issues during the second quarter (22.9%) compared with the first quarter (26.3%).

The business closure rate contracted slightly or was little changed in all sectors in May. The slight decline in the overall rate was driven by construction (-0.5 percentage point change in closure rate; -509 change in business closures), accommodation and food services (-0.8 percentage points; -470) and retail trade (-0.3 percentage points; -214).

The number of active businesses increased or remained relatively unchanged in every sector in May. Construction posted the highest growth in active businesses, with 762 more businesses (+0.6%) compared with the previous month, followed by retail trade (+360 active businesses; +0.4%) and accommodation and food services (+339; +0.5%).

The series on temporary business closures and exits (or "permanent closures") is now updated to include data up to November 2022

The exit rate dropped from 2.2% in October to 1.8% in November 2022, slightly above its historical average of 1.7%. In November, the exit rate decreased in every sector except transportation and warehousing (+0.1 percentage points).

In November, the gap between the exit rate and its historical average varied across sectors. The exit rate remained furthest from its historical average in transportation and warehousing (2.7% exit rate compared with 1.5% historical average), real estate and rental and leasing (2.4% compared with 1.9%) and professional, scientific and technical services (2.1% compared with 1.7%).

Chart 1  Chart 1: Monthly business openings and closures as a percentage of active businesses, business sector, January 2021 to May 2023, seasonally adjusted data
Monthly business openings and closures as a percentage of active businesses, business sector, January 2021 to May 2023, seasonally adjusted data

Chart 2  Chart 2: Business opening rate and its components, business sector, January 2021 to May 2023, seasonally adjusted data
Business opening rate and its components, business sector, January 2021 to May 2023, seasonally adjusted data

Chart 3  Chart 3: Percentage point difference in the business opening and closure rates from April to May 2023, by sector, seasonally adjusted series
Percentage point difference in the business opening and closure rates from April to May 2023, by sector, seasonally adjusted series

  Note to readers

Upcoming changes, stay tuned!

Next month, Statistics Canada will leverage different tools to share data stories in different formats and at different times throughout the day.

Keep an eye out! Our next release on September 25, 2023, will be published at 11:00 a.m. Eastern time (ET) as a data byte in StatsCAN Plus, one of Statistics Canada's official release vehicles. A data availability announcement and the data tables will still be available at 8:30 a.m. ET in The Daily.

For more information on this data, see the page of the survey number 5401.

As Canada's national statistical agency, we remain committed to modernizing the way we connect with Canadians and communicate data in an innovative and flexible manner.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

Report a problem on this page

Is something not working? Is there information outdated? Can't find what you're looking for?

Please contact us and let us know how we can help you.

Privacy notice

Date modified: