Business closures spiked during lockdown
Unlike the country as a whole, Alberta’s business sector went into the pandemic still weakened from the provincial recession of 2015-16
By ATB Economics 10 August 2020 1 min read
The number of active businesses* in Alberta was down by 9 per cent in April compared to February.
As the pandemic’s grip on the economy tightened in March and April, fewer new businesses opened and more existing businesses closed resulting in a net loss of almost 10,000 Alberta businesses over the two-month period.
The picture is much the same for Canada as a whole, with the number of active businesses down by 11 per cent (87,000) in April compared to February.
Unlike the country as a whole, Alberta’s business sector went into the pandemic still weakened from the provincial recession of 2015-16. The number of businesses in the province fell by 9 per cent between February 2015 and February 2020 compared to an increase of 3 per cent nationally.
With the number of businesses falling by 25 per cent between February 2015 and February 2020, the oil and gas sector went into the pandemic down the most since 2015 and declined another 4 per cent by April.
The number of businesses in the arts, entertainment and recreation sector declined the most during the first two months of the lockdown (-15 per cent) followed by accommodation and food services (-14 per cent) and construction (-9 per cent).
As with so many other economic indicators, the big question going forward is how long it will take to climb out of the hole created during the economic shutdown. Some of the businesses that closed in March and April will have reopened since then, but ongoing challenges related to the pandemic will keep others shut and dampen the creation of new businesses.
What’s more, even if the number of businesses starts to climb back up to pre-shock levels, this does not necessarily mean that they are doing well, only that they are open.
*Self-employed businesses with no employees other than the owner are not included.