TORONTO, ON--(Marketwired - October 20, 2016) - Small businesses have played a critical role in cushioning the labour market slowdown, according to the Scotiabank Global Economics Special Report on Small Business released today. The Report, which looks at the impact small businesses are having on the economy, found that annual payroll growth among small firms averaged 1.4 per cent from 2010-2015, significantly stronger than the 0.9 per cent increase among large firms.
"The growing importance of small firms in job creation reverses the trend over the early years of the new millennium, when large firms dominated hiring," wrote Adrienne Warren, Senior Economist, and Aron Gampel, Vice President, Canadian & U.S. Economics, both at Scotiabank, in the Report. "Almost forty per cent of Canadian employees now work for small firms, the highest level in a decade."
The Report highlights that much of the growth seen in Canada is located in B.C. and Ontario, and is concentrated in the metropolitan areas of Vancouver and Toronto. These large and expanding urban areas have proven to be quite resilient and generally resistant to the weakness evident throughout much of Canada. Their size, diversity and comparatively stronger economic performances should continue to present growth opportunities for small businesses.
Other highlights from The Report include:
- Small firms generated more than 500,000 net new jobs from 2010-2015, or 45 per cent of national payroll gains.
- The rotation toward small firm hiring mirrors Canada's shifting industrial performance. Many of the leading industries in job growth are labor intensive and dominated by small firms.
- Industries leading job growth include: construction, accommodation and food services, professional, scientific and technical services and health care and social assistance.
- Industries trailing in job growth include: retail, manufacturing, mining, oil and gas and agriculture.
Read the full Scotiabank Global Economics Special Report on Small Businesses online here.
Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.
Scotiabank is Canada's international bank and a leading financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. We are dedicated to helping our 23 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With a team of more than 88,000 employees and assets of $907 billion (as at July 31, 2016), Scotiabank trades on the Toronto (TSX: BNS) and New York Exchanges (NYSE: BNS). Scotiabank distributes the Bank's media releases using Marketwired. For more information, please visit www.scotiabank.com and follow us on Twitter @ScotiabankViews.