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August 2025 Business Formation Plummets as Closures Surge

After a strong rebound in July, August saw business formation tumble back to just 13,180 new registrations, down 50% month-over-month and 7% below last August. At the same time, closures spiked to 61,412, a level not seen in over a year, wiping out gains and leaving a net loss of more than 48,000 businesses nationwide.

What’s Driving the Contraction?

Several factors may be at play:

  • Seasonality: Summer slowdowns often affect registrations, though August’s drop is far sharper than usual.

  • Economic pressures: Higher financing costs and consumer caution may be leading more businesses to shut down.

  • Regulatory/administrative timing: Spikes in closures can sometimes reflect reporting cycles or bulk deregistrations.

By the Numbers

  • New business starts: 13,180 (↓ 50% MoM, ↓ 7% YoY)

  • Business closures: 61,412 (↑ 309% MoM, ↑ 254% YoY)

  • Net change: –48,232

This marks one of the steepest single-month contractions in recent history.

💼 Why This Matters

For marketers, lenders, and service providers, these shifts underline the importance of real-time business intelligence. Understanding which businesses are entering or exiting the market is critical for:

  • Targeting growth opportunities with new enterprises.

  • Protecting portfolios by tracking struggling firms.

  • Adapting go-to-market strategies based on regional or sector volatility.

With closures surging, precision targeting matters more than ever — ensuring outreach is directed toward viable, growing firms.

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About The Data:

The data presented in this report was summarized from ResponseCanada™ Business, Canada’s largest and most up-to-date commercial database.

To learn more about the database or for licensing information, talk to Cleanlist.

Cleanlist is Canada’s largest customer data company. We clean, enrich, and validate business and consumer data. We’re also experts in data-driven document composition and Canada’s largest data provider for digital and offline marketing.