Canadian Business Bankruptcies Decline in 2008 by 2% over 2007
Posted on | February 11, 2009 |
Feb 11, 2009: According to the latest stats released by the Office of the Superintendent of Bankruptcy for the year 2008, 6164 Business Bankruptcies were filed in Canada. This is a 2% drop from the year before i.e. 2007.
Although the absolute drop in numbers 2008 over 2007 is 2%, if we compare this to the 6.8% drop in the numbers of 2007 over 2006 the trend seems to be reversing.
This 6.8% decrease in business insolvencies in 2007 came in a more favourable economic climate wherein the gross domestic product growth (GDP) was 2.71%. This number has dropped to 0.95% in 2008!
The current economic climate is threatening the GDP growth which is primarily driven by consumer demand, consumer expenditure, government expenditure and business expenditure. Media constantly bombards us with bad economic news which kills consumer confidence and it is consumer spending that drives two thirds of an economic recovery cycle. While the economic indicators of inflation, job loss, housing starts and consumer confidence are not showing a very encouraging start in 2009, the Bank of Canada, Governor Mark Carney projects a 3.8 per cent growth for the Canadian economy in 2010. It is heartening to note this optimism which the governor denotes confidently as realism.
Note:
Business bankruptcies numbers include the following:
- Any commercial entity
- An individual who as a result of operating a business incurs 50 percent or more of total liabilities.
[Article based on statistics sourced from 'Industry Canada': http://www.ic.gc.ca/]