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Business entries and exits in Alberta

Business entries and exits in Alberta

Posted on: 11/22/2018 | Author: ATB Financial's Economics + Research Team

From giant oil companies to mom-and-pop coffee shops, businesses keep the wheels of commerce churning. But just like living and breathing things, businesses come and go.

The chart below shows business entries and exits in Alberta over the last ten years. The data are represented in percentage terms. That is, the number of new or terminated businesses as a percentage of the total number of business operations in the province.

Each year, regardless of a boom or bust economy, new businesses open and old ones close down. In almost every year since 2006, there have been more new openings than closures, as demonstrated by the blue line being consistently higher than the red line.

There has been on exception. In the nasty recession year of 2016, there were more businesses closing up shop than new ones opening. It shouldn’t be a surprise, given that the very bottom of the recession occurred in the summer of that year. The devastating forest fires in Fort McMurray in May of 2016 also contributed to the shift.

As Alberta’s economy gradually recovers, we should start to see entries rise again. However, given new threats facing Alberta—low oil prices, challenges with pipelines, clouds on the global economic horizon—it might take a while longer before new business entries are back to the heady days of 2006-07.

Entries and exits, graph

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