Monthly estimates of business openings and closures, May 2024

Released: 2024-08-26

In May, the business opening rate contracted by 0.2 percentage points to 4.5%. The business closure rate edged up 0.1 percentage points to 4.7%, after holding steady at 4.6% since January. In May, the opening rate was 0.2 percentage points below its 2015-to-2019 historical average, while the closure rate was 0.1 percentage points above its historical average.

As the number of business closures was higher than that of openings, the number of active businesses decreased by 0.1% (-1,382 businesses) in May 2024, after remaining relatively unchanged over the previous four months. In May, both payroll employment and real gross domestic product (GDP) rose by 0.2%, and business insolvency filings dropped slightly from 551 in April to 530 in May (-3.8%).

The contrast between business openings and closures and both employment and GDP is due to the fact that small firms account for nearly all of business openings, closures, entries and exits, while larger firms account for a significant share of employment and GDP. For example, in May, 94.9% of opening businesses and 97.8% of closing businesses had fewer than 20 employees.

In May, business openings dropped or changed little in all sectors. The business sector decline was driven by fewer business openings in professional, scientific and technical services (-237 openings compared with April; 18.6% contribution to the decrease in business sector openings), followed by construction (-194; 15.2%) and transportation and warehousing (-180; 14.1%). With the exception of accommodation and food services (-167; 13.1%), the contribution of the remaining sectors to the business sector decline was below 10% each.

In May, business closures remained relatively unchanged in most sectors. Other services (except public administration) (+114 closures compared with April; 47.9% contribution to the increase in business sector closures) led the slight increase in business sector closures, followed by health care and social assistance (+60; 25.2%) and manufacturing (+44; 18.5%). The overall increase in business closures was mitigated by the drop in the number of closures in information and cultural industries (-54; -22.7%), retail trade (-38; -16.0%) and professional, scientific and technical services (-33; -13.9%).

Chart 1 
Monthly business openings and closures as a percentage of active businesses, business sector, January 2022 to May 2024, seasonally adjusted data

Chart 2 
Percent contribution of sectors to the decrease in openings and the increase in closures, April to May 2024, seasonally adjusted data

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).