A Peek at the Trough
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A Peek at the Trough
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Small business employment outperforms mid-sized and large firms through the recession
Canada’s strong relative economic performance through the 2008-09 recession, compared to most other developed countries, has the attention of policymakers around the world looking for ways to tame future business cycle gyrations. The fact that our economy lost only 2.4 per cent of payroll employment from its peak in the third quarter of 2008 to when it troughed in the fourth quarter of 2009 gives the impression that Canada was a beacon of stability during those turbulent months. Perhaps that is true, but when one peels back the outer layers of the data, it reveals that the economic healing process really has a longer way to go than the headline stats suggest.
A look at more detailed payroll data during that period reveals a vastly different picture by size of business, industry and province. The most striking finding is how much more the private sector suffers. Although the entire economy lost about 360,000 jobs during that five-quarter period, the private sector loss was closer to 500,000. Of those, large and medium-sized enterprises bore the brunt of the pain, losing 5.6 and 5.9 per cent of payroll employment respectively. Payrolls in small enterprises, defined as employing fewer than 50 people also saw a decline, but much more modest, at 2.0 per cent.
