At the end of 2016-17, there were 2,238,299 actively trading businesses in the market sector in Australia, an increase of 3.1% (66,755 units) from the end of 2015-16. Almost one-quarter of this increase (24.2%) is due to growth in the Transport, Postal and Warehousing Industry (Division I), which increased by 12.1% (16,160 units) during 2016-17. During this period, the number of businesses entering the market sector (Entries) was 328,205, an increase of 5.7% (17,770 units) from 2015-16 (310,435 units). The number of businesses exiting the market sector (Exits) in 2016-17 was 261,450, an increase of 0.5% (1,324) from 2015-16 (260,126 units).
During 2016-17, all States and Territories (Main State) experienced an increase in business counts (except Other Territories/Currently Unknown). Over this period, the largest percentage increase was in the Australian Capital Territory (4.5%; 1,191 units), followed by New South Wales (3.6%; 26,363 units) and Victoria (3.6%; 20,716 units). Almost one-quarter of the increase operating businesses in the ACT was due to growth in Transport, Postal and Warehousing (Division I; 24%, 284 units).
The Transport, Postal and Warehousing industry (Division I) showed the largest increase (12.1%; 16,160) in business counts across all industry divisions during 2016-17. The entry rate in this industry division was 26.8% in 2016-17, the highest entry rate for any industry division over this period. Three industry divisions showed a decrease in the number of businesses operating at the end of 2016-17: Mining (-1.2%; 94 units), Agriculture, Forestry and Fishing (-0.6%; 1,110 units) and Retail Trade (-0.6%; 776 units).
All Institutional Sectors recorded growth between 2015-16 and 2016-17. Of the 2,238,299 businesses operating at the end of 2016-17, over one-half (55.3%; 1,237,180 units) were in the Households Sector.
Partnerships (Total) were the only Type of Legal Organisation (TOLO) to decrease (8,861 or 3.2%) during 2016-17. Companies (Total) had the largest increase in counts of businesses (up 35, 307 units or 4.4%), whilst Sole Proprietors showed the largest percentage increase (up 4.5% or 25,521 units)over this period.
INDUSTRY DIVISIONS
Key Findings
The largest industries by business count at 30 June 2017 were Construction (Division E; 371,599 units; 16.6% of total businesses), Professional, Scientific and Technical Services (Division M; 270,654 units; 12.1% of total businesses), Rental, Hiring and Real Estate Services (Division L; 246,664 units; 11.0% of total businesses) and Financial and Insurance Services (Division K; 202,110 units; 9% of total businesses).
Transport, Postal and Warehousing showed the largest increase from 2015-16 to 2016-17 (12.1%; 16,160) and the highest entry rate for businesses in 2016-17 (26.8%).
The growth in Division I during 2016-17 is driven by the following Industry Classes: ‘Other Transport Support Services n.e.c.’, which increased 26.0% (8,186 units; Class 5299) and ‘Taxi and Other Road Transport’, which increased 32.3% (6,150 units; Class 4623). Together, these Industry Classes account for most (88.7%) of the growth in Division I.
Industry classes driving a net increase in their respective industries included: Electrical Services (2,260 units) in the Construction Industry (increased by 12,779 units); Superannuation Funds (5,057 units) in the Finance Industry (increased by 8,298 units); and Management Advice and Related Consulting Services (3,317 units) in the Professional, Scientific and Technical Services Industry (7,833 units).
Mining (Division B) showed the largest percentage decrease from 2015-16 (down 1.2% or 94 units).
Agriculture, Forestry and Fishing (Division A) showed the largest decrease in terms of the number of businesses from 2015-16 (down 1,110 units or 0.6%), as well as the lowest entry rate (7.3%) of businesses in 2016-17.
Both Public Administration and Safety (Division O) and Accommodation and Food Services (Division H) had the highest exit rates in 2016-17 (15.9%).
Of businesses operating at the end of 2012-13, those in the Health Care and Social Assistance industry (Division Q) had the highest survival rate at the end of 2016-17 (75.0%), whilst businesses in the Accommodation and Food Services industry (Division H) had the lowest survival rate (54.6%).
Of businesses that entered the market sector in 2013-14, those in the Agriculture, Forestry and Fishing industry (Division A) had the highest survival rate (68.9%) at the end of 2016-17, despite the lowest entry rate (7.3%) in 2016-17. Businesses in the Public Administration and Safety industry had the lowest survival rate (42.2%) over this period.
A - Agriculture, Forestry and Fishing; B - Mining; C - Manufacturing; D - Electricity, Gas, Water and Waste Services; E - Construction; F - Wholesale Trade; G - Retail Trade; H - Accommodation and Food Services; I - Transport, Postal and Warehousing; J - Information Media and Telecommunications; K - Financial and Insurance Services; L - Rental, Hiring and Real Estate Services; M - Professional, Scientific and Technical Services; N - Administrative and Support Services; O - Public Administration and Safety; P - Education and Training; Q - Health Care and Social Assistance; R - Arts and Recreation Services; S - Other Services
MAIN STATE OF OPERATION
Key Findings
At the end of 2016-17, all States and Territories recorded an increase in businesses counts (except Other Territories/Currently Unknown).The largest percentage increase was in the Australian Capital Territory (4.5%; 1,191 units), followed by New South Wales (3.6%; 26,363 units) and Victoria (3.6%; 20,716 units). The Northern Territory (1.0%; 140 units) had the smallest increase in the number of operating businesses.
The Australian Capital Territory had both the highest entry (17.6%) and exit (12.9%) rate for businesses in 2016-17.
Tasmania had both the lowest entry (11.7%) and exit (10.0%) rate for businesses in 2016-17.
Of those businesses operating in June 2013, those in Tasmania (66.7%) and South Australia (66.6%) had the highest survival rates at the end of 2016-17; those in the ACT had the lowest survival rate (61.0%).
Of businesses that entered the market sector in 2013-14, those in Tasmania had the highest survival rate (60.3%) in 2016-17, while those in the Northern Territory had the lowest survival rate (51.1%).
Of the 2,238,299 businesses operating at the end of 2016-17, Households continued to be the largest Institutional Sector (55.3%; 1,237,180 units), followed by Non-Financial Corporations (34.9%; 781,686 units).
During 2016-17, all Institutional Sectors recorded positive growth. Both Non-Financial Corporations (4.5%; 33,471 units) and Financial Corporations (4.5%; 8,262 units) showed the largest percentage increase over this period.
Non-Financial Corporations had the highest entry rate (15.9%) in 2016-17, while Households had the highest exit rate (12.8%). Financial Corporations had both the lowest entry (13.1%) and exit (8.6%) rates in 2016-17.
Of those businesses operating at 30 June 2013, Financial Corporations Sector (72.2%) had the highest survival rate at 30 June 2017; businesses in the Households sector had the lowest survival rate (62.1%).
For business entries during 2013-14, businesses in the Financial Corporations sector had the highest survival rate (67.3%) at 30 June 2017; businesses in the Households sector had the lowest survival rate (52.2%).
Sole Proprietor businesses showed the largest percentage increase from the end of 2015-16 to the end of 2016-17 (up 4.5% or 25,521 units). Companies (Total) showed the largest increase in the number of businesses over this period (35,307 units or 4.4%).
Public Sector businesses were the least common, with only 393 operating in Australia at the end of 2016-17. Public sector businesses also had the lowest entry (4.4%) and exit (8.8%) rates over this period.
Sole Proprietor businesses had the highest entry (20.7%) and exit (16.1%) rates in 2016-17.
Of those businesses operating in June 2013, Trusts had the highest survival rate at 30 June 2017 (71.5%). Public Sector businesses had the lowest survival rate over this period (53.5%).
For those businesses that entered the market sector during 2013-14, Trusts had the highest survival rate (65.9% at 30 June 2017) over all years, while Sole Proprietors had the lowest survival rates across all years (44.9% at 30 June 2017).
There were 868,248 (38.8%) employing businesses and 1,370,051 (61.2%) non-employing businesses at the end of 2016-17.
Most employing businesses (70.1% or 608,733) at the end of 2016-17 employed between 1 and 4 people whilst 0.5% (3,915) of employing businesses employed more than 200 people.
During 2016-17, there was a net movement of businesses away from the 1-4 employment size range (-23,133); the number of businesses in all other employment size ranges increased.
In 2016-17, non-employing businesses had both the highest entry (17.6%) and exit (14.8%) rates, while businesses employing 200+ employees had both the lowest entry (1.8%) and exit (3.8%) rates.
Of those businesses operating in June 2013, non-employing businesses had the lowest survival rate (58.9%) while businesses employing 200+ employees had the highest survival rate (83.7%).
Businesses that entered the market sector during 2013-14 also showed a general trend; businesses with fewer employees also had lower rates of survival at 30 June 2017. For example, non-employing businesses had the lowest survival rate (50.7%), whilst businesses employing 200+ employees had the highest survival rate (78.6%).
Of the 2,238,299 actively trading businesses operating at the end of 2016-17, most (98% or 2,085,729) had annual turnover of less than $2m. About one-third (34.7%; 776,196 units) had turnover of $50k to less than $200k; a further one-third (33.9%; 758,309 units) of businesses had turnover of $200k to less than $2m. A relatively small proportion (less than 3%) of business had an annual turnover of $5m or more.
Businesses with annual turnover less than $50k had the largest increase (4.4%; 23,353 units) between 2015-16 and 2016-17, while businesses with turnover of $50k to less than $200k had the smallest percentage increase (2.2%; 16,702 units).
In 2016-17, businesses with turnover from $50k to less than $2m had the highest entry rate (19.9%) and businesses with less than $50k had the highest exit rate (18.6%).
In 2016-17 businesses with high turnover had the lowest entry rates: businesses with annual turnover of $5m to less than $10m and $10m or more had the lowest entry rate (2.6%).
During 2016-17, there was a net movement away from businesses in two turnover size ranges: the $50k to less than $200k turnover size range (-33,064); and the $200k to less than $2m turnover size range (-5,372).
Of those businesses operating in June 2013, survival rates at June 2017 generally increased with increasing annual turnover. That is, businesses with less than $50k turnover size range had the lowest survival rate (50.4%); while businesses in the $5m to less than $10m and the $10m or more turnover size ranges had the highest survival rate (83.4%).
For businesses that entered the market sector during 2013-14, businesses in the less than $50k turnover size range had the lowest survival rate (51.3%), while businesses with turnover of $10m or more had the highest survival rate (76.0%).
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