Small business - 2011 profile

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Small business - 2011 profile

Posted 25/09/2012 by Guy Woods


Image source: business.gov.au
Small business accounts for the majority of businesses in Australia. In terms of economic output and employment, it also makes a significant contribution.



Counts of small businesses

The latest count of businesses by the Australian Bureau of Statistics (ABS) was for 30 June 2011. The statistics show:
  • there were just over 2.1 million businesses in Australia
  • over 61 per cent were non-employing businesses and
  • almost 96 per cent were small businesses (defined as employing fewer than 20 persons, includes non-employing).
Year on year the number of small businesses grew by 0.4 per cent in 2010-11. The fastest growth occurred in those businesses employing 15 to 19 persons, 0.9 per cent (See Table 1). However, despite recent growth in the number of small businesses, growth over the last four years to 30 June 2011 was solely the result of an increase in the number of non-employing businesses. Non-employing businesses grew at an annual average rate of 1.4 per cent over the period 30 June 2007 to 30 June 2011. Over the same time period the number of small employing businesses actually fell.

Table 1: Counts of business by employment size, 2007-2011

Click table to enlarge

Industry

Over half of all small businesses were located in just five industries. These industries were:
  • Agriculture, forestry and fishing (9.5 per cent of small businesses)
  • Construction (16.8 per cent of small businesses)
  • Financial and insurance services (7.9 per cent of small businesses)
  • Rental, hiring and real estate services (10.9 per cent of small businesses) and
  • Professional, scientific and technical services (11.9 per cent of small businesses).
All these industries were characterised by a high degree of small business intensity; between 97 and 99 per cent of businesses in these industries were small businesses.

Several industries were characterised by below average levels of small business intensity, including: 
  • Mining (91 per cent of businesses in the industry were classified as small)
  • Manufacturing (89 per cent of businesses in the industry were classified as small)
  • Accommodation and food services (84 per cent of businesses in the industry were classified as small)
  • Public administration and safety (90 per cent of businesses in the industry were classified as small) and
  • Education and training (91 per cent of businesses in the industry were classified as small).
Table 2: count of businesses by industry and employer size, as at 30 June 2011

    Click table to enlarge

    Geographic distribution

    The most small business intense states were New South Wales (96.2 per cent of businesses) and Victoria (96.1 per cent of businesses) The least small business intense jurisdiction was the Northern Territory, where only 93.6 per cent of businesses were small (see Table 3).

    Table 3: count of businesses by main state of operation, as at 30 June 2011
    Click table to enlarge

    By Commonwealth electoral division the top five divisions by count of businesses were:
    • Sydney 59 693 businesses (including 56 407 small businesses, or 94.5 per cent of the total) 
    • Melbourne 41 061 businesses (including 38 604 small businesses, or 94.0 per cent of the total)
    • Adelaide 31 273 Businesses (including 29 836 small businesses, or 95.4 per cent of the total)
    • Brisbane 30 767 Businesses (including 29 050 small businesses, or 94.4per cent of the total) and
    • North Sydney 28 132 businesses (including 26 797 small businesses, or 95.3 per cent of the total).

    The bottom five electorates by count of businesses were:
    • Lingiari 5 455 businesses (including 5 109 small businesses, or 93.7 per cent of the total)
    • Franklin 6 370 businesses (including 6 093 small businesses, or 95.6 per cent of the total)
    • Braddon 7 367 businesses (including 7 041 small businesses, or 95.6 per cent of the total)
    • Shortland 7 410 businesses (including 7 145 small businesses, or 96.4 per cent of the total) and
    • Chifley 7 478 businesses (including 7 281 small businesses, or 97.4 per cent of the total).*

    Economic contribution

    Data on this topic is collected by the ABS from its Economic Activity Survey (EAS). The EAS does not cover all industries or businesses. The following caveats should be noted when interpreting this data. The data excludes the Financial and insurance services industry. It is essentially limited to the private sector as all business classified as General government are excluded, with the exception of businesses in the Electricity, gas and waste services industry.

    Economic output —

    For the financial year 2010–11, the industry value added (IVA)** for private sector, small business was:

    • $312.8 billion
    • equal to 33.7 per cent of the total private sector IVA and
    • grew by 6.2 per cent on previous year.
    Employment —

    For financial year 2010–11, employment for private sector, small business was:

    • 4.8 million
    • equal to 45.7 per cent of total private sector employment and
    • grew by 1.8 per cent on previous year.
    Exporters —

    For financial year 2010–11, the number of small businesses exporting goods overseas was:

    • 17 774
    • equal to 41.6 per cent of total exporting businesses and
    • grew by 1.4 per cent on previous year.
    For financial year 2010–11 value of goods exported by small business was:
    • $1.2 billion
    • equal to 0.5 per cent of total exports and
    • grew by 3.7 per cent on previous year.

    * Source: Parliamentary Library estimates based on data published by statistical area level 2 in, ABS, Count of Australian businesses, including exits and entries, Jun 2007 to Jun 2011, cat. no. 8165.0  For more details see the Parliamentary Library electoral atlas (only accessible to Senators, Members and their staff).

    ** Industry value added represents the value added by an industry to the intermediate inputs used by the industry. IVA is the measure of the contribution by businesses, in the selected industry to gross domestic product. IVA is similar to the measure referred to as gross value added (GVA) in the national accounts. The main difference between IVA and GVA is that IVA does not include businesses classified as general government.

    Comments

    • 21/01/2014 2:33 PM
      Guy Woods said:

      Martin thank you for your comments. The following is my response to the points you make. The current series on counts of Australian businesses by employer size only goes back to 30 June 2007. The ABS does not provide any data on the export of services by business size.

    • 21/01/2014 2:33 PM
      Martin Butterfield said:

      A thought provoking post. It would be interesting to see some comparison with more distant time periods (say 1990) if that was available. This comment comes from the view that in recent years many people have retired, especially from the APS and come back as contract consultants - who I assume are treated as non-employing businesses. Secondly I note the point about exports "For financial year 2010–11 value of goods exported by small business... " (emphasis added). What about exports of services? By way of example the international aid industry (UN, foreign governments and NGO) employs a lot of Australians on contract, which is in effect an export of services.


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