Australian Bureau of Statistics
8154.0 - A Portrait of Australian Exporters: A Report Based on the Business Longitudinal Survey, 1997-98
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 22/08/2000
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These factors have led to a significant undercoverage of total international trade in services. From the ABS trade in services statistics, Australia exported $25 billion in services during 1997-98. Of this, $18 billion was recorded in the travel, freight and other transportation components with a further $2 billion recorded in the communications and royalties components which were all excluded from BLS data. The remaining $5 billion was in other services which were covered in the BLS. By comparison, the BLS recorded $4 billion for this component. This difference can be accounted for in the main by the scope of the BLS and to a lesser extent by the fact that it is likely that there would have been some businesses included in the BLS which were not able to provide revenue details for their exports of services.
Notwithstanding these shortcomings, the publication still provides a wealth of information on the characteristics and behaviour of a large proportion of Australian exporting businesses.
CLASSIFYING BUSINESSES BY SIZE
The ABS currently uses total employment as the basis for classifying non-agricultural businesses by size. In this publication data are presented using five business size categories:
For some tables, size groups are combined because sample sizes do not allow the full dissection to be provided. In addition to the employment size tables, table 1.5 also provides data classified by turnover size.
SECTION 1 CHARACTERISTICS OF AUSTRALIAN EXPORTERS
This section provides an overview of the structural characteristics of exporters and how they compare to non-exporters. The extent to which businesses are regular exporters as opposed to irregular is also examined along with some indications of trends in business characteristics from 1994-95 to 1997-98.
There are several alternatives for grouping businesses by size. ABS has adopted total employment as the basis for classifying non-agricultural businesses by size and the size categories used in this publication are generally consistent with other ABS business size classifications (see Introduction for more details). As well as presenting data classified by employment size groups, table 1.5 also provides details by turnover size group.
Most exporters are small businesses but export revenue dominated by large businesses
During 1997-98, in the industries covered by the survey, there were an estimated 21,800 exporting businesses in Australia which represented 4% of all businesses. These businesses generated over $60 billion in export revenue. Of the 21,800 exporting businesses, 77% (16,600) were small businesses (i.e. employing less than 20 people). While small businesses made up the majority of exporting businesses, they only accounted for 13% of total export revenue.
The 700 large exporting businesses accounted for 49% of export revenue while the 4,500 medium businesses (21% of the total) accounted for 38% of total revenue.
Exports of goods versus services
Of the 21,800 exporting businesses, 17,800 (82%) exported goods, while a further 4,000 (18%) exported services only. (See note in the Introduction relating to the limited coverage of the export of services). Service exporting firms were mostly in the small business sector (88% of the total) with almost 3,500 small firms exporting services.
EXPORTING BUSINESSES AND REVENUE
Not all exporters are continuously involved in exporting; for some it is a short term activity; for others it is intermittent behaviour. To illustrate the transient nature of many of Australia's exporters, table 1.2 categorises these businesses which operated in all four years of the survey (1994-95 to 1997-98) into four groups according to their exporting activity over the period. The first group is the 'regular exporters' - those that exported in each of the four years; the second group is the 'irregular exporters' - those that exported in at least one year but not all four years; the third group 'all exporters' is the sum of the first two groups, while the final group, the 'non-exporters', are those that did not export at all during the four years.
Table 1.3 shows the level of exports for businesses in each of the exporter experience categories.
Regular exporters versus irregular exporters
An examination of the four year panel of businesses reveals that:
7% of all businesses that operated for all four years exported at some stage during the period;
The regular exporting businesses, which made up 36% of the four year panel of exporters, were the major exporters averaging over $6 million in export revenue per year. This represented an average export intensity of 27% . (Export intensity is defined as the value of exports as a percentage of total income and is sometimes referred to as the export ratio.).
Overall, the irregular exporting businesses averaged $457,000 in export revenue each year they exported, with an average export intensity of 9%.
Of the irregular exporters, most exported in only one of the four years. There were 7,200 businesses (57%) exporting in only one year, while 3,800 (26%) exported in two of the four years and 3,500 (26%) exported in three of the four years.
REGULARITY OF EXPORTERS - 1994-95 TO 1997-98
Table 1.3 also shows details of the so called 'born globals' (those businesses that commenced exporting in their first year of operation). In the survey, new start-up businesses were identified in 1995-96, 1996-97 and 1997-98. During the three years, an estimated total of 224,000 new businesses commenced operation with almost 3,300 (1.5%) of these exporting in their first year of operation. These businesses tended to be significant exporters, averaging $2.5 million in export revenue in their first year of operation and recording an average export ratio of 25%.
GROWTH IN THE EXPORTER COMMUNITY
Over the three year period 1994-95 to 1997-98, the number of exporting businesses increased 26% from 17,300 to 21,800, which represents an annual average growth rate of 8% per year. Over the same period, export revenue increased from $54.6 billion to $60.2 billion (10%) which represents an annual average growth rate of 3% per year.
Small business leads the way
Over the three years, growth was strongest in the small business sector, particularly in micro businesses (those employing 1-4 people). The number of exporting micro businesses increased from 5,500 in 1994-95 to 7,500 in 1997-98 (37%) representing an average increase of 11% per annum.
Other small businesses (those employing more than 4 but less than 20 people) also recorded strong growth rates with numbers of exporting businesses increasing at an average of 9% per annum over the three years.
In terms of exports revenue, levels for total small business increased from just over $5 billion in 1994-95 to $7.6 billion in 1997-98, representing an average growth rate of 15% per annum.
Growth rates for medium businesses were less pronounced with the number of exporters increasing at an average of 4% per annum to almost 4,500 businesses and export revenue for the sector increasing at an average 5% per annum to $23.1 billion in 1997-98.
In the large business sector there was a slight decline in the number of exporters over the three years, dropping from 775 in 1994-95 to 700 in 1997-98 (an average annual decline of -3%). Over the same period revenue also dropped marginally from $29.7 billion to $29.5 billion. This fall in exporting activity by large business was during a period when the total income of large businesses increased by 7% per annum. Large business' share of total export revenue also dropped over the period from 54% in 1994-95 to 49% in 1997-98.
EXPORTERS BY TURNOVER SIZE GROUP
Table 1.5 provides details of the number of exporters and export revenue by turnover size group for 1997-98. Again the smaller size categories dominate in terms of number of businesses with just over half (51%) of the 1997-98 exporters recording turnover of less than $1 million. These 'low turnover' businesses only accounted for 1% of total export revenue.
At the other end of the scale, the 840 exporters with turnover of $50 million or more accounted for 76% of total export revenue.
Table 1.6 again categorises the exporting businesses that operated for the four years of the survey into three groups; regular exporters, irregular exporters and all exporters. Then as a separate group, the born globals are presented to examine the export intensity for each category.
Most businesses which exported generated only a small share of their total income from exports. Of the 4% of Australian businesses that were exporting during 1997-98, over 63% of them were generating less than 10% of their total income from exports. This intensity measure is sometimes referred to as their export ratio. A further 23% of exporting businesses recorded an export ratio between 11% and 50%, while only 13% recorded a majority of their income as being sourced from exports (i.e. a ratio of more than 50%).
Looking at the regular exporters (those that exported in each of the four years of the survey), there is a high percentage of businesses (24%) that recorded an export ratio of more than 50%. Of the irregular exporters, on the other hand, only 8% recorded an export ratio of more than 50% in the years that they exported.
Born globals generally recorded similar intensity levels to the regular exporters, with 59% of businesses recording an export ratio of 10% or less and 22% recording a ratio of 50% or more.
The average export ratio did not vary significantly across the different business size groups, although micro businesses (those employing 1-4 people) tended to have more businesses with an export ratio of more than 50% in each of the categories, regular, irregular and born globals.
Tables 1.7, 1.8 and 1.9 provide an overview of the industry coverage of Australian exporters. However, as noted in the Introduction there are certain exclusions from the BLS that should be kept in mind. Firstly, the survey excludes non-employing businesses, government enterprises as well as the Agriculture, Communication services, Education and Health and community services industries. Also, it does not cover exports of travel, freight and other transportation services.
Proportion of all exporters
Across the industries covered, the Manufacturing industry with almost 6,900 exporting businesses accounted for the highest proportion (32%), of exporting businesses. Manufacturing businesses also recorded the highest proportion of export revenue (39%), generating $23.7 billion during 1997-98. The Wholesale trade industry was also heavily involved in exporting with 6,100 businesses generating $17.1 billion (28%) in export revenue.
The Property and business services industry, mainly the Business services subdivision, was strong in exporting in terms of number of businesses with 4,700 businesses (22% of exporting businesses) involved, however, they only accounted for $0.9 billion in revenue (1.5% of total export revenue).
DISTRIBUTION OF EXPORTING BUSINESSES BY INDUSTRY
Exporters as a proportion of industry totals
Looking at how well exporters are represented in particular industries, Mining (16%), Wholesale trade (15%) and Manufacturing (13%) each had a significant proportion of businesses involved in exporting during 1997-98. In the Mining industry, exports revenue accounted for just over half the total turnover of the industry which was well above the levels of the other industries.
Almost 15% of Wholesale trade businesses operating in 1997-98 were involved in exporting with 8% of the industry's turnover accounted for by export sales.
In Manufacturing, 13% of businesses were exporting and export sales accounted for almost 13% of the industry's total turnover.
Growth by industry
Table 1.8 indicates that in relative terms, growth has been strongest in the less significant exporting industries (grouped in the 'Other' category in the table). In these industries the number of exporting businesses increased from 2,500 businesses in 1994-95 to 3,700 in 1997-98, representing an average increase of 14% per annum. Over the same period exports revenue for this 'other' category grew at an average annual rate of 21% to $2.8 billion.
The Property and business services industry also recorded strong growth in the numbers of exporting businesses (13% per annum) but recorded fluctuating revenue levels over the four years with 1997-98 total exports down 12% on the 1994-95 total.
Of the larger more significant exporting industries, Wholesale trade recorded an average annual increase over the three year period of 8% in the number of exporters and an average increase of 6% per annum in exports revenue over the three years.
While the number of businesses in the Mining industry is small, it also recorded strong growth over the period with revenue increasing at 7% per year. Over the same period the number of Manufacturing businesses exporting increased at an average of 3% per year, however, exports revenue for the industry dropped slightly (down an average of 2 % per year).
AVERAGE ANNUAL GROWTH BY INDUSTRY - 1994-95 TO 1997-98
AGE OF BUSINESS
Of the 21,800 exporting businesses in Australia in 1997-98, more than 6,300 (29%) were less than five years old. However, these younger businesses tended to be the less significant exporters, accounting for less than 10% of total export revenue. Businesses aged 20 years or more accounted for just over 50% of total exports revenue, however, they represented only 15% of businesses.
Growth by age
Over the three year period 1994-95 to 1997-98, the number of exporting businesses aged 10 years but less than twenty years old increased by an average of 16% per annum, from an estimated 4,400 in 1994-95 to just under 6,800 in 1997-98. This was almost double the growth in the number of exporting businesses aged 5 years to less than 10 years old (8% per annum). The number of businesses less than 5 years old increased by an average 6% per annum, while the number of exporting business aged 20 years or more increased only marginally from 3,256 in 1994-95 to just under 3,300 in 1997-98.
Businesses aged 10 years but less than 20 years old also recorded the strongest growth in export revenue over the three year period, increasing from $10.5 billion in 1994-95 to $17.5 billion in 1997-98, an average increase of 19% per annum. Businesses aged 20 years or more also recorded growth in exports revenue increasing at an average of 8% per annum, while the two other age groups, less than five years old and five years to less than ten years old recorded a decrease of 19% and 10% per annum respectively.
The survey collected broad level information on the extent to which each business has foreign ownership. Clearly most businesses are wholly Australian owned; and similarly, most exporters are wholly Australian owned (83%). However, it was the businesses with significant foreign ownership (50% to 100%) that were the larger exporters, with businesses in this category accounting for only 15% of Australian exporting businesses but 43% of total export revenue, the same proportion as the wholly Australian owned businesses.
FOREIGN OWNERSHIP OF EXPORTING BUSINESSES
In the 1994-95 survey, businesses were asked to nominate the three major countries of destination for their exports. Table 1.13 shows the major countries or regions of destination targeted by Australia's exporters for each employment size group while table 1.14 shows destinations targeted by export revenue size.
Across the board, the most popular region was the Oceanic countries (New Zealand, Papua New Guinea etc.) used by 46% of Australia's exporters. South-East Asia was the next most popular with 35% of exporting firms using these markets.
To some extent these proportions are being driven by the smaller exporters:
EXPORTERS BY COUNTRY OR REGION OF DESTINATION - 1994-95
EXPORTERS USING INTERMEDIARIES
The 1994-95 survey collected information on the methods by which export sales were made.
Most businesses exported directly overseas to an unrelated business. This method also accounted for the largest proportion of export revenue generated in 1994-95 (48%). The next most popular method was selling directly to subsidiaries with 16% of exporters involved, generating a similar proportion of total revenue.
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This page last updated 8 December 2006