CIBC’s latest edition of Trends in Small Business suggests that self-employment will grow as the economy slows.

The report finds that the number of self-employed in the Canadian economy has stabilized in recent months after falling more than 200,000 between the beginning of 2000 and May 2001.

“The drop is typical during the peak of an economic boom as people who had been forced into self-employment by job loss are successful in returning to paid employment,” CIBC says. It predicts that self-employment is likely to grow in the coming months as this trend reverses itself.

Since early 2000 the drop among self-employed women has been much sharper than that of men. Recent months have seen a reversal of that trend with the number of women self-employed beginning to rise.

In the period between January 2000 and June 2001 there was a shift in the distribution of growth in small business formation with the increase in the number of very small businesses slowing down and growth in the number of larger firms accelerating. Overall, business formations grew 2% among firms with 10-19 employees and over 5% for those with 20-49 employees.

The June quarterly survey of business conditions in the manufacturing sector found small businesses had experienced a notable decline in confidence. The number of small firms reporting that orders were rising fell from 30% in late 2000 to just over 20% in June. The number of firms reporting higher than normal unfilled orders rose fell to 15% from 20%.