Canada: Business formation stalls – NBF

Krishen Rangasamy, analyst at National Bank Financial, suggests that there is a more bad news for the Canadian monetary policy hawks.as the latest data on Canada’s business creation showed that the number of private sector firms in Q3 last year was up only 0.7% compared to the same quarter the previous year.

Key Quotes

“That’s about half a percentage point lower than the average since 2001. The softness in business formation is in part due to declines in the population of firms in hard-hit sectors such as mining and oil & gas, but also in retailing, wholesaling and utilities. So why is the Governor so keen to see business creation accelerate? Because new firms help build the economy’s capacity or raise potential GDP. Unfortunately for Canada, the long-awaited spurt of innovation and entrepreneurship still hasn’t showed up.”