- Businesses being created at a fast pace
- Markets mixed amid sober second look
- Post-Brexit Scottish independence?
- Video: Can you protect your job from robots?
Business creation speeds up
The latest statistics on how fast new businesses are popping up paint a different picture of Canada’s economy in an uncertain climate.
And they’re sure to have caught the eye of the Bank of Canada.
Indeed, says National Bank, the numbers drive home the point that Canada’s economy is no one-trick pony.
Particularly gratifying in the numbers released this week by Statistics Canada is that new businesses are being created at a fast pace even as Alberta’s once-mighty economy is laid so low.
According to Statistics Canada, the number of businesses across the country increased in the first quarter by 2 per cent, or more than 20,000, from a year earlier. About 140,000 businesses were created, compared to the 118,000 that disappeared.
It’s the best showing since the recession and, Royal Bank of Canada notes, above the 2000-2008 average.
“That growth is all the more impressive when considering the massive drop of 7 per cent in mining and energy,” said National Bank senior economist Matthieu Arseneau, noting, too, the broad wins across other sectors.
“This should dispel fears that the Canadian economy is a one-trick pony.”
Unfortunately, this doesn’t appear to have translated into many new jobs, though it is a key measure for Bank of Canada Governor Stephen Poloz.
“In a recent speech, Governor Poloz said that he interprets accelerating firm creation as a strong sign that economic growth has become self-sustaining,” said RBC economist Gerard Walsh.
“While the recent uptick in business counts is broad-based, it remains to be seen if it will be sustained and the extend to which the economy’s adjustment to lower commodity prices flows through to firm creation in manufacturing and other non-energy, export-oriented sectors.”
We’ll get a fresh look at the state of the economy later this morning when Statistics Canada reports gross domestic product for April.
Economists expect the report to show expansion of 0.1 per cent, a rebound from two consecutive months of contraction.
“Our 0.1-per-cent call for the month is a modest start to the quarter, but recall that the wilfires are expected to weigh heavily on May and [second-quarter] GDP,” said BMO Nesbitt Burns senior economist Benjamin Reitzes.
A scene I'd love to see ...
“We said, we're staying in the EU.”
Global markets are on the rise so far after some early second thoughts this morning, marking the third straight day of its post-Brexit rally.
Tokyo’s Nikkei gained 0.1 per cent, and Hong Kong’s Hang Seng 1.8 per cent, while the Shanghai composite lost 0.1 per cent.
London's FTSE 100, Germany's DAX and the Paris CAC 40 were up by between 0.4 and 0.8 per cent by about 6:35 a.m. ET.
New York futures were also up.
“We reiterate that volatility is a sign of stress in both sides,” said London Capital Group senior market analyst Ipek Ozkardeskaya.
“Despite the short-term rallies, the U.K. equities are expected to remain downbeat due to credit downgrades from Moody’s, S&P and Fitch, uncertainties regarding U.K.’s future in Europe, but also the complex political situation within the kingdom,” she added.
“In a recent report, JPMorgan was said to consider Scottish independence and a new Scottish currency as a base-case scenario.”