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INTRODUCTION

1 This publication contains estimates of actual and expected new capital expenditure by private businesses for selected industries in Australia. The series have been compiled from data collected by the Australian Bureau of Statistics (ABS) in its quarterly Survey of New Capital Expenditure.


SCOPE OF THE SURVEY

2 The Survey of New Capital Expenditure includes the following industries classified according to the Australian and New Zealand Standard Industrial Classification, ANZSIC, 1993:
Mining (Division B)
Manufacturing (Division C)
Other selected industries:
Construction (Division E)
Wholesale trade (Division F)
Retail trade (Division G)
Transport and storage (Division I)
Finance and insurance (Division K, but excluding Superannuation funds (Class 7412))
Property and business services (Division L)
Other selected services:
Electricity, gas and water (Division D)
Accommodation, cafes and restaurants (Division H)
Communication services (Division J)
Cultural and recreational services (Division P)
Personal services (Subdivision 95)

3 The survey excludes the following industries:
Agriculture, forestry and fishing (Division A)
Government administration and defence (Division M)
Superannuation funds (Class 7412)
Education (Division N)
Health and community services (Division O)
Other services (Subdivision 96)

4 The scope excludes public sector business units (i.e. all departments, authorities and other organisations owned and controlled by Commonwealth, State and Local Government).

5 The Survey of New Capital Expenditure, like most ABS economic collections, takes its frame from the ABS Business Register which is primarily based on registrations to the Australian Taxation Office's Pay As You Go Witholding (PAYGW) scheme (and prior to 1 July 2000 the Group Employer scheme). The frame is updated quarterly to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes.

6 Businesses which have ceased employing are identified when the Australian Taxation Office cancels their PAYGW registration (or previously their Group Employer registration). In addition, from September quarter 1999, businesses which did not remit under the Group Employer scheme for the previous five quarters were removed from the frame. A similar process will be adopted to remove businesses who do not remit under the PAYGW scheme.

7 The statistics in this publication exclude non-employing businesses. Though there are a substantial number of these businesses, it is expected that they would not contribute significantly to the estimates, although the impact would vary from industry to industry.


CHANGES TO ABS BUSINESS REGISTER

8 The introduction to The New Tax System has a number of significant implications for ABS business statistics, and these are discussed in Information Paper: ABS Statistics And The New Tax System (Cat. no. 1358.0). The replacement of the Group Employer registration process by PAYGW registration resulted in a number of changes to most business survey frames. However, an adjustment has been made to the New Capital Expenditure series so that these changes will not affect broader level estimates of level and movement.

9 From the September quarter 2002, the ABS will make further changes including adopting a new units model and expanding its Register to include all units on the Australian Business Register, including non-employers. These non-employers will, however, continue to be excluded from the scope of the Survey of New Capital Expenditure. Information paper: Improvements in ABS Economic Statistics (Arising from The New Tax System), 2002 (Cat. No. 1372.0) provides further details.


STATISTICAL UNIT

10 The survey uses the management unit as the statistical unit. The management unit is the highest-level accounting unit within a business, having regard to industry homogeneity, for which accounts are maintained. In nearly all cases it coincides with the legal entity owning the business (i.e. company, etc.). In the case of large diversified businesses, however, there may be more than one management unit, each coinciding with a ‘division’ or ‘line of business’. A division or line of business is recognised where separate and comprehensive accounts are compiled for it.


SURVEY METHODOLOGY

11 The survey is conducted by mail on a quarterly basis. It is based on a random sample of approximately 7,000 units which is stratified by industry, State/Territory and number of employees. The figures obtained from the selected businesses are supplemented by data from units which have large capital expenditure and/or large employment and which are outside the sample framework, or not adequately covered by it.

12 Respondents are asked to provide data on the same basis as their own management accounts. Where a selected unit does not respond in a given survey period, a value is estimated. If data are subsequently provided, the estimated value is replaced with reported data. Aggregates are calculated from all data using the ‘number raised’ estimation technique. Data are edited at both individual unit level and at aggregate level.


TIMING AND CONSTRUCTION OF SURVEY CYCLE

13 Surveys are conducted in respect of each quarter and returns are completed in the 8 or 9 week period after the end of the quarter to which the survey data relate (e.g. March quarter survey returns are completed during April and May).

14 Businesses are requested to provide 3 basic figures each survey:

• Actual expenditure incurred during the reference period (Act)
• A short term expectation (E1)
• A longer term expectation (E2).

• the first estimate was available from the December 2000 survey as a longer term expectation (E2);

• the second estimate was available from the March 2001 survey (again as a longer term expectation);

• the third estimate was available from in the June 2001 survey as the sum of two expectations (E1 + E2);

• in the September 2001, December 2001 and March 2002 surveys the fourth, fifth and sixth estimates, respectively, are derived as the sum of actual expenditure (for that part of the year completed) and expected expenditure (for the remainder of the year) as recorded in the current quarter's survey;

• the final (or seventh) estimate from the June quarter 2002 survey will be derived by summing the actual expenditure for each of the four quarters in the 2001-02 financial year.

• A short term expectation (E1) for the 6 months to 30 June in the current financial year.

• A longer term expectation (E2) for the 12 months to 30 June of the following financial year.

• Buildings and Structures. Includes industrial and commercial buildings, houses, flats, home units, water and sewerage installations, lifts, heating, ventilating and similar equipment forming an integral part of buildings and structures, land development and construction site development, roads, bridges, wharves, harbours, railway lines, pipelines, power and telephone lines. Also includes mine development (e.g. construction of shafts in underground mines, preparation of mining and quarrying sites for open cut extraction and other developmental operations primarily for commencing or extending production). Excludes purchases of land, previously occupied buildings and speculatively built projects intended for sale before occupation.

• Equipment, plant and machinery. Includes plant, machinery, vehicles, electrical apparatus, office equipment, furniture, fixtures and fittings not forming an integral part of buildings, durable containers, special tooling, etc. Also includes goods imported for the first time whether previously used outside Australia or not.

• National Accounts estimates incorporate data from other sources as well as information from the new capital expenditure survey. For example, annual estimates for capital expenditure on ‘machinery and equipment’ are based on the ABS' annual Economic Activity Survey combined with data from the Australian Taxation Office. Quarterly estimates are interpolated between and extrapolated from the annual estimates using a variety of indicators including this survey. The ABS’s quarterly Building Activity Survey and Engineering Construction Survey are the main sources for estimating the National Accounts dwellings and other building and structures items.

• National Accounts estimates include capital expenditure by all private businesses including units classified to agriculture, forestry and fishing, education, and health and community services industries and capital expenditure on dwellings by households. Data for these sectors are excluded from this publication.

• National Accounts estimates include the value of work done on speculative construction projects as the work is put into place. The statistics in this publication, however, include full value of the speculative projects as new capital expenditure of the purchases (if in scope), when the project is sold.

• National accounts estimates of gross fixed capital formation relate to acquisitions less disposals of new or existing fixed assets, whereas the survey figures are acquisitions of new fixed tangible assets only.

• Australian Business Expectations (Cat. no. 5250.0)
• Australian National Accounts: National Income, Expenditure and Product (Cat. no. 5206.0)
• Australian National Accounts: Concepts, Sources and Methods (Cat no. 5216.0)
• Building Activity, Australia (Cat. no. 8752.0)
• Constructon Work Done, Australia (Cat no 8755.0)
• Business Indicators (Cat. no. 5676.0)
• Business Operations and Industry Performance, Australia (Cat. no. 8140.0)
• Directory of Capital Expenditure Data Sources and Related Statistics (Cat. no. 5653.0)
• Engineering Construction Activity, Australia (Cat. no. 8762.0)
• Information Paper: Experimental Estimates: Australian Industry, A State Perspective, 1998-99 (Cat. no. 8156.0)
• Information Paper: Improvements to Australian Bureau of Statistics Business Indicators (Cat. no. 5677.0)
• Information Paper: Australian National Accounts, Introduction of Chain Volume and Price Indexes (Cat. no. 5248.0)