Ontario had the largest decrease in small business employment
In September, small business employment was down in all five regions covered by the Index. Ontario had the largest decrease, down by 9,500 jobs; a monthly decline of 0.5%. The smallest decrease was in the Atlantic region (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick), down by 1,200 jobs; a monthly decline of 0.31%.
Ufuk Akcigit, the Arnold C. Harberger Professor of Economics at the University of Chicago, said: “In September, Statistics Canada announced a notable inflation rate of 4% for August, marking an increase from the previous month's 3.3%. This surge was primarily attributed to soaring gasoline prices. Meanwhile, core inflation held steady at 4.1% year over year in August, mirroring the previous month's increase in July. In response to this persistent inflation, the Bank of Canada took proactive measures by raising the policy rate to 5%, the highest level seen since 2001. Canadians are grappling with reduced disposable income consequently dampening consumer demand. Additionally, the escalating borrowing costs are disproportionately impacting small businesses, many of whom are nearing the deadline for refinancing their Canada Emergency Business Account (CEBA) loans at higher rates, even with the latest extension in place. These unfavorable conditions for small enterprises were reflected in the Intuit QuickBooks Small Business Index for September, as employment within firms employing fewer than 20 people continued its negative trajectory, contracting by 0.43%.
“As discussed in the September inflation report from Statistics Canada, the ‘recreation, education, and reading’ category exhibited the most significant price decline registering a 0.9% month-over-month decrease. The back-to-school season and a comparably weak, seasonally-adjusted summer period may have contributed to this price easing. Remarkably, there are signs of this reflected in the Intuit QuickBooks Small Business Index which highlighted a positive trend emerging in the education services sector. It stood out as the sole sector to record positive growth in employment this month.
“Notably, the agriculture, natural resources and mining sector experienced the most significant decline in September, with employment contracting by 1.16%. This downturn is in line with the ongoing destructive impacts of wildfires and the added strain of rising energy prices on this energy-intensive industry.
“Furthermore, with the unemployment rate reaching 5.5% and disposable income gradually diminishing, there are signs of weakening consumer demand, particularly in the wholesale and retail sector. The Intuit QuickBooks Small Business Index reports that the wholesale and retail trade sector had the most significant net employment decline in September, with 4,800 fewer small business jobs.”
More information
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USA Index
The Intuit QuickBooks Small Business Index is also published monthly in the US. Get the latest small business employment insights for the US here.
UK Index
The Intuit QuickBooks Small Business Index is also published monthly in the UK, a few days after the US and Canada. Get the latest small business hiring insights for the UK on October 9.