Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Release Date
ABS @ Facebook ABS @ Twitter ABS RSS ABS Email notification service
8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2008 to Jun 2012 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 21/05/2013   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product

TECHNICAL NOTE MEASURES OF BUSINESS GROWTH


INTRODUCTION

1 In CABEE, the stock of businesses is updated each year according to a standard equation:

2 Operating at start of financial year + Entries – Exits = Operating at end of financial year

3 In previous releases of CABEE, all data was presented in accordance with this equation at both a national level, and for selected classifications: Industry; Main State; Institutional Sector; Type of Legal Organisation; Employment Size; and Annual Turnover Size.

4 To ensure additivity, the classification values (e.g. industry code, main State, employment size range, etc.) attributed to each business were held constant over the lifetime of the business in previous editions. Specifically, for each business, the latest available data were used to overwrite any periods of conflicting or missing data.

5 The main issue with this approach is that it is possible for businesses to change their characteristics over time, particularly for employment size and annual turnover size. In fact, this change can be of interest in itself as business growth can be considered in terms of whether a business is increasing with respect to that characteristic, remaining stable, or decreasing in size over time. To address this, recent releases of CABEE have extended the standard equation for employment size and annual turnover size to:

  • Operating at start of financial year + Entries – Exits + Inflow – Outflow = Operating at end of financial year, where:
      • Inflow = the number of surviving businesses that have changed their classification to the classification of interest; and
      • Outflow = the number of surviving businesses that have changed their classification from the classification of interest.


EXAMPLE

6 Consider the following example involving a small business which is active during the 2008–09 and 2009–10 financial years. During this two year period, the business:
  • Did not employ any staff at the start of 2008–09 financial year;
  • Took on 2 employees during 2008–09; and
  • Grew to 6 employees over 2009–10.

7 Under previous publications (where classifications were held constant for each business at their latest available value), this business would have been included in the '5–19' employees category for June 2008, June 2009 and June 2010. This can result in some misunderstanding regarding the size of the businesses in earlier time periods.

8 Now, under the new approach, the business would be classified according to its size for the respective year:

Operating at start of financial year
Plus Entries
Minus Exits
Plus Inflows
Minus Outflows
Operating at end of financial year

2008–09

Non–employing business
1
0
0
0
1
0
1–4 employees
0
0
0
1
0
1
5–19 employees
0
0
0
0
0
0

2009–10

Non–employing business
0
0
0
0
0
0
1–4 employees
1
0
0
0
1
0
5–19 employees
0
0
0
1
0
1



9 Using this approach, it is possible to present the change in business numbers (of surviving businesses) for different classifications (of employment size and annual turnover). For example, consider the following partial extract from the publication's Growth of Business Survivals by Employment Size Range table below.

CHANGE IN BUSINESS SIZE OVER TIME FOR SURVIVING BUSINESSES(a): June 2010–June 2012

CHANGED BUSINESS SIZE CATEGORY (EMPLOYMENT SIZE RANGES)
Inflow at
end of
financial year
Outflow at
end of
financial year
Net movement
of surviving
businesses(c)
Non–employing
1–4(b)
5–19
20–199
200+
no.
no.
no.
no.
no.
no.
no.
no.

CHANGED BUSINESS SIZE CATEGORY AT JUNE 2011

BUSINESS SIZE CATEGORY AT JUNE 2010
(Employment Size Ranges)
Non–employing
1 042 971
37 125
2 841
497
32
64 283
40 495
23 788
Employing
1–4(b)
53 143
366 737
35 744
2 126
219
65 523
91 232
–25 709
5–19
8 401
26 654
167 346
11 668
52
47 459
46 775
684
20–199
2 603
1 603
8 844
63 359
644
14 843
13 694
1 149
200+
136
141
30
552
4 734
947
859
88
Total
1 107 254
432 260
214 805
78 202
5 681
193 055
193 055

CHANGED BUSINESS SIZE CATEGORY AT JUNE 2012

BUSINESS SIZE CATEGORY AT JUNE 2011
(Employment Size Ranges)
Non–employing
1 052 102
38 285
2 951
518
47
62 087
41 801
20 286
Employing
1–4(b)
51 209
370 429
36 436
2 287
138
67 388
89 975
–22 587
5–19
8 336
26 823
168 646
12 525
55
47 535
47 684
–149
20–199
2 528
2 011
8 061
63 846
791
15 751
13 391
2 360
200+
141
166
61
493
4 874
1 031
941
90
Total
1 114 316
437 714
216 155
79 669
5 905
193 792
193 792

– nil or rounded to zero (including null cells)
(a) Please refer to paragraphs 53–57 in the Explanatory Notes for more information regarding employment size ranges.
(b) A small number of businesses which have ITW roles for purposes other than withholding amounts from wages and salaries (and as such have zero employment), are included in this category.
(c) Please refer to the Technical Note and Glossary for more information regarding the net movement of surviving businesses.



EXPLANATION OF CONTENTS

Business Size Range Matrix

10 The primary purpose of the table is to quantify the businesses which grow or contract between financial years. The first five columns provide a cross–classified matrix which shows how many businesses were classified to one business size at the start of the financial year, and a different business size at the end of the financial year.

11 Note that the majority of businesses do not change their size category between years, and the counts of these businesses are represented along the main diagonal of the table. For example, 1,052,102 'Non–employing' businesses at the end of June 2011, remained 'Non–employing' at the end of June 2012. Equally, 4,874 businesses in the largest size category at the end of June 2011, remained in the largest size category at the end of June 2012. In the above table, it can be seen that:
  • 51,209 businesses had '1–4' employees at the start of the financial year and contracted to be 'Non–employing' by the end of the financial year (negative growth);
  • 370,429 businesses had '1–4' employees at the start of the financial year and continued to have '1–4' employees at the end of the financial year (stability); and
  • 36,436 businesses had '1–4' employees at the start of the financial year and expanded to have '5–19' employees at the end of the financial year (growth).


Inflow at End of Financial Year

12 The total number of business that moved into a size range from another range. Note that these businesses may have come from larger or smaller size range (depending on the range being analysed).


Outflow at End of Financial Year

13 This column accounts for the total number of business that moved out of a size range into another range. Note that these businesses may have come from larger or smaller size ranges (depending on the range being analysed).


Net Movement of Surviving Businesses

14 The net movement of surviving businesses for each range, i.e. accounting for all businesses that moved into (inflow) and out of (outflow) a particular size range.

15 The net movement of surviving businesses is calculated by taking total inflow at the end of the financial year minus total outflow at the end of the financial year.

16 The above information (particularly the last column) can then be included in the traditional business counts tables. A partial extract from the publication's Businesses by Employment Size Ranges table is included below.

BUSINESSES BY EMPLOYMENT SIZE RANGES(a): June 2010–June 2012

Operating
at start of
financial year
Entries(b)
Exits
Net movement
of surviving
businesses(c)
Operating at
end of
financial year
Change
Percentage
change
no.
no.
no.
no.
no.
no.
%

2010–11

Non–employing
1 303 040
198 769
219 574
23 788
1 306 023
2 983
0.2
Employing
1–4(d)
506 272
76 414
48 303
–25 709
508 674
2 402
0.5
5–19
228 676
15 833
14 555
684
230 638
1 962
0.9
20–199
80 787
2 804
3 734
1 149
81 006
219
0.3
200+
5 875
390
282
88
6 071
196
3.3
Total employing
821 610
95 441
66 874
–23 788
826 389
4 779
0.6
Total
2 124 650
294 210
286 448
2 132 412
7 762
0.4

2011–12

Non–employing
1 306 023
191 904
212 120
20 286
1 306 093
70
Employing
1–4(d)
508 674
77 042
48 175
–22 587
514 859
6 185
1.2
5–19
230 638
15 410
14 253
–149
231 591
953
0.4
20–199
81 006
2 729
3 769
2 360
82 326
1 320
1.6
200+
6 071
436
336
90
6 411
340
5.6
Total employing
826 389
95 617
66 533
–20 286
835 187
8 798
1.1
Total
2 132 412
287 521
278 653
2 141 280
8 868
0.4

– nil or rounded to zero (including null cells)
(a) Please refer to paragraphs 53–57 in the Explanatory Notes for more information regarding employment size ranges.
(b) The entries for 2009–10 include an estimated 20,909 businesses arising from a change in processing procedures for LTNRs by the ABS. Please refer to paragraph 22 in the Explanatory Notes for more information.
(c) The net movement of surviving businesses is calculated by subtracting the total outflow at the end of the financial year from the total inflow at the end of the financial year. See Technical Note and Glossary for more information.
(d) A small number of businesses which have ITW roles for purposes other than withholding amounts from wages and salaries (and as such have zero employment), are included in this category.


17 Including the net movement of surviving businesses column in the employment size ranges table provides more detailed (point in time) information about the movement of businesses within specific business size ranges, whilst maintaining additivity within each business size table. For example, the table above demonstrates that during 2010–11, part of the 196 change recorded for businesses employing '200+' employees was driven by the net movement of 88 surviving businesses in this employment size range. That is, during 2010–11, there was a positive net movement of 88 existing small or medium businesses which grew to become large businesses.


Application within Other Tables

18 While it is possible to develop similar tables and data cubes for the other classifications (industry, main State of operation, institutional sector and type of legal organisation) used in CABEE, ABS investigations have determined that relatively few businesses tend to change these classifications values from year to year. Thus, allowing for the classifications to change over time appears to offer limited additional information while increasing the complexity of the tables (including introducing a need to confidentialise data for those rare changes in classifications). For these reasons, additional tables for the non business size range topics have not been created in this version of CABEE.


Bookmark and Share. Opens in a new window

Commonwealth of Australia 2014

Unless otherwise noted, content on this website is licensed under a Creative Commons Attribution 2.5 Australia Licence together with any terms, conditions and exclusions as set out in the website Copyright notice. For permission to do anything beyond the scope of this licence and copyright terms contact us.