It’s unfortunate but true that the negative economic stories just keep on coming. The latest relates to the business world and the number of new businesses deciding to open their doors.
As a Canadian Press story describes it: “New business openings in the second quarter of 2022 were down almost 50% compared with a year ago as economic pressures rise, says credit reporting agency Equifax Inc.”
That’s a steep drop, to see the number of new businesses cut in half for one quarter. But it’s a sign of the times.
There is no doubt many factors that are playing a role here.
Because interest rates are going up, taking out loans for new ventures has become that much more expensive.
Because of the whole uncertainty around what’s going on, people are more likely to stay put and keep their heads down rather than take a risk.
RECOMMENDED VIDEO
Then there’s the fear that an upcoming recession will mean an all around reduction in economic activity, which is another disincentive to start out on a new endeavour.
That’s just to name a few. These are very natural and well-studied reactions.
“The worrying trend comes as Equifax said debt levels, delinquencies and bankruptcies are creeping back up toward pre-pandemic levels as stresses on businesses rise,” the Canadian Press report continues.
It’s all very unfortunate. Our communities thrive when more businesses open and do well.
One thing that can be done to counteract this turbulence as much as possible is to create a climate that is fully pro-business.
This means government needs to do all it can to get out of the way and let businesses flourish.
While it’s always been important to eliminate red tape, that is more pressing than ever.
Let’s also strive to minimize business taxes and any needless or punitive levies. Let’s also be on guard against rising taxes or fees that will just make things more difficult for business.
Economic downturns do unfortunately happen, often through forces beyond our control. But policymakers can play a role in lessening the blows and ensuring things turn around for the better sooner rather than later.
Post a Comment