Declining number of Alberta businesses predates pandemic
The number of business closures hit a record high of 11,727 in April 2020
By ATB Economics 1 February 2021 1 min read
Every month in Alberta, thousands of businesses are launched and thousands of others close their doors, but the pandemic is threatening to push the number of permanent closures higher over the coming months.
Data from the Canadian Federation of Independent Business based on a survey of its members done in mid-January show that 22 per cent (34,498) of Alberta businesses are seriously contemplating permanently shutting down as a result of COVID-19.
While no sector will be unaffected, any closures that take place will be concentrated among the businesses most affected by COVID-19 containment measures such as those providing hospitality and travel services.
A decline in the number of businesses in Alberta, however, predates the pandemic and adds to the economic strain that may be felt going forward.
On average, 5,975 businesses (with at least one employee other than the owner) opened in Alberta each month between January 2015 and October 2020. Over the same period, an average of 6,175 closed each month. As a result, there were 16,726 fewer active businesses in the province in October 2020 than in January 2015 for a drop of 14.5 per cent. This erosion reflects the economic setbacks that have dogged our economy since the recession of 2015-16.
During the pandemic, the number of business closures hit a record high of 11,727 in April 2020, for a net loss that month of 6,033 businesses. Openings exceeded closures between June and October, but the number of active businesses remained down by 7.1 per cent in October 2020 compared to 12 months earlier.
We don’t have the data yet, but the tightening of public health restrictions that has taken place since October will have pushed up the number of business closures, especially in December and January.
Where things go from here will depend on the path of the virus, the public health measures aimed at it and the speed and effectiveness of the vaccine rollout.
Answer to the previous trivia question: According to Fortune magazine, the largest company in Alberta in 2020 as measured by annual revenue is Enbridge at $US 38 billion. Enbridge is #331 on the global list.
Today’s trivia question: According to Fortune magazine, which company has the largest number of employees in the world?