Change of direction
Revised numbers show an uptick in the number of businesses
By Rob Roach, ATB Economics 26 April 2023 2 min read
Last month, we reported that the number of active businesses* was on a downward trend over the second half of 2022 in both Canada and Alberta.
A revised count from Statistics Canada, however, tells a different story and is a good reminder that economic data—while still very useful—should be viewed with caution and updated on a regular basis.
Instead of falling over the second half of last year, the number of active businesses in Canada continued to increase, ending the year 1.5% higher than at the start compared to growth of just 0.1% according to the previously released data.
For Alberta, a 0.5% drop in active businesses between January 2022 and December 2022 has been changed to a 1.0% rise.
The upward trend continued in January 2023, with the number of businesses 0.5% higher than the month before in Canada and 0.7% higher in Alberta.
This is good news, but given the need for caution mentioned above, there’s a chance that future revisions could once again tell a different story.
Does this mean we are in the dark when it comes to whether or not the number of active businesses is going up or down? Not entirely.
Even though short-term movements in the numbers are suspect (though less so now that they have been revised at least once), trends over longer periods are likely a good reflection of what has actually been happening on the ground.
First, the number of active businesses in Alberta has climbed back from the low point reached early in the pandemic.
Second, the negative effects of the oil price crash of 2014 and ongoing oil and gas transportation capacity constraints on Alberta are evident with the average annual number of active businesses up in Canada as a whole by 5.6% between 2015 and 2022, but down in Alberta by 6.3%.
On the bright side, Alberta’s energy sector is doing better than it has in some time and should, along with other sources of economic growth, push the number of businesses in the province higher and help make up some of the ground lost since 2015.
*Active businesses are those that report having one or more employees in a given month.
Answer to the previous trivia question: According to Tiny Homes in Canada, the size of a typical “tiny” home is between 120 square feet and 400 square.
Today’s trivia question: George Weston Ltd. has the most employees of Canada’s 800 largest corporations (by revenue). How many employees did it have as of last year?