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Note: 31 May 2007
The datacubes for Counts of Australian Businesses, including Entries and Exits, June 2003 To June 2006 (8165.0) to be released Thursday 31st May will contain additional cross classified information not previously available.

Additional datacubes to be released on 31st May include data by Industry, state and territory, postcode and employment and turnover size range data.

Table 1.7 Businesses by Industry Division by Main State by Employment Size Ranges, June 2003 - June 2006
Table 1.8 Businesses by Industry Division by Single/Multi-State by Employment Size Ranges, June 2003 - June 2006
Table 1.9 Businesses by Industry Division by Main State by Annual Turnover Size Ranges, June 2003 - June 2006
Table 1.10 Businesses by Industry Division by Single/Multi-State by Annual Turnover Size Ranges, June 2003 - June 2006
Table 1.11 Businesses by Industry Class by Main State by Employment Size Ranges, June 2006
Table 3.1 Businesses by Postcode by Industry Division by Employment Size Ranges, June 2006
Table 3.2 Businesses by Postcode by Industry Division by Annual Turnover Size Ranges, June 2006

Note: 27 April 2007

The datacubes for Counts of Australian Businesses, including Entries and Exits, June 2003 To June 2006 (8165.0) to be released Friday 27th April will replace the datacubes currently for the June 2003 To June 2006 release. The new datacubes contain the data currently available plus additional cross classified information.

SUMMARY OF FINDINGS

There were 1,963,907 actively trading businesses in Australia as at June 2006.

Growth in the number of businesses slowed slightly in each of the three most recent financial years. The number of businesses grew by 2.2% during 2003-04; by 1.5% during 2004-05; and by 1.3% during 2005-06. In comparison, GDP (in chain volume terms) over the corresponding periods grew by 4.1%, 2.7% and 2.8%, respectively, while Australia's population grew by 1.1%, 1.2% and 1.3% over the same periods.

The slowing growth in the number of businesses over the three years to June 2006 was mainly due to decreasing entry rates. The entry rate for new businesses during 2005-06 was 16.2%, which was marginally lower than the entry rates of 17.4% in 2003-04 and 16.9% in 2004-05. The business exit rate over the three year period was relatively constant: 15.2% in 2003-04; 15.4% in 2004-05; and 14.9% in 2005-06.

Of the 1,868,969 businesses operating in June 2003, 65.0% were still operating in June 2006. Of the 654,704 businesses which did not survive, 43.4% exited during 2003-04, 32.7% during 2004-05 and the remaining 23.9% during 2005-06.

Of the 325,935 business entries during 2003-04, 58.3% were still operating in June 2006. Of the 135,817 which did not survive, 59.1% had exited by June 2005.

In combination, the above two points indicate that, over the short to medium term, business survival is very dependent on the age of the business. That is, the longer a business survives, the greater its chances of continuing survival. (Note that the ABS has determined that it is not feasible to ascertain the age of businesses which were operating at June 2003).

Survival rates are also heavily influenced by non-employing businesses, which have survival rates significantly lower than employing businesses but contribute the greatest proportion of both the stock of existing businesses and business entries (67.9% of businesses operating in June 2003 and 72.9% of business entries in 2003-04 were non-employers). For example, while 58.3% of all entries in 2003-04 were still operating in June 2006, 80.4% of new employing businesses, compared to 49.9% of new non-employers, were still operating.

INDUSTRY

At June 2006, Property and business services had the greatest number of businesses with 492,453 (or 25% of the total), followed by Construction (16%), Retail trade and Agriculture, forestry and fishing (11% each).

During 2005-2006, Electricity, gas and water supply (26%) and Mining (22%) had the highest entry rates, although these were the two smallest industries in terms of the total number of businesses.

Over the same period, exit rates were highest for Communication services (21%) and Electricity, gas and water supply (20%). Only Communication services (-1.7%) and Manufacturing (-1.3%) experienced net decreases in total number of businesses from the previous year (June 2005).

The survival rates at June 2006 for businesses operating since June 2003 were highest for Health and community services (75.8%) and Agriculture, forestry and fishing (71.1%). Survival rates were lowest for businesses operating in Communication services (52.6%) and Education (55.7%).

The survival rates for business entries during 2003-04 were similar in terms of their industry breakdown to those for the stock of businesses at June 2003.

MAIN STATE OF OPERATION

At June 2006, the proportion of businesses by state (as defined by the main state of operation) was broadly aligned with the proportion of Australia's population by state. The main difference was that the larger states (New South Wales, Victoria and Queensland) had a slightly greater proportion of Australia's businesses than they did Australia's population (for example, New South Wales had 34.2% of businesses and 33.1% of the population) while, for the smaller states, the opposite was the case (for example, Tasmania had 1.9% of businesses and 2.4% of the population). Western Australia contained the same proportion (10.0%) of Australia's businesses and population.

In the year to June 2006, Queensland (2.6%) and Western Australia (2.2%) had the highest net growth in the number of businesses, while New South Wales and the Australian Capital Territory each had the lowest growth (0.4%). Entry rates were highest in Queensland and the Northern Territory and lowest in South Australia and Tasmania. Tasmania also had the lowest exit rate of all the states.

Of those businesses operating in June 2003, the survival rates at June 2006 were highest in South Australia and Tasmania and lowest in the Northern Territory and the Australian Capital Territory. The survival rates for business entries during 2003-04 were similar across the States.

INSTITUTIONAL SECTOR

At June 2006, 1,249,994 (or 63.6%) of businesses were classified to the Household sector (which includes most unincorporated businesses), followed by Non-financial corporations (584,766 or 29.8%) and Financial corporations (129,147 or 6.6%).

The Non-financial corporations sector grew by 1.6% from June 2005 to June 2006, compared to growth at 1.2% in the Household sector and 0.5% in the Financial corporations sector. The churn of businesses in the Non-financial corporations sector was significantly lower than for the other sectors. While the entry rate of Non-financial corporations in 2005-06 was 13.2%, it was 17.5% for Households and 17.3% for Financial corporations. Similarly, Non-financial corporations had an exit rate of 11.6% compared with exit rates of 16.3% and 16.9% in the Household and Financial corporations sectors, respectively. This pattern was similar in the preceding two financial years.

In line with these lower exit rates, the survival to June 2006 of businesses who were operating in June 2003 was higher for Non-financial corporations (71.6%) than for Households (62.2%) or Financial corporations (63.0%). Survival rates for Non-financial corporations which entered in 2003-04 were also higher than for the other sectors.

EMPLOYMENT SIZE RANGES

At June 2006, there were 807,581 (41.1%) employing businesses and 1,156,326 (58.9%) non-employing businesses.

The majority of employing businesses, 721,569 (89.3%) employed less than 20 employees as at June 2006. This comprised 494,196 (68.5%) businesses with 1-4 employees and 227,373 (31.5%) businesses with 5-19 employees. There were also 80,215 (9.9%) employing businesses with 20 to 199 employees and 5,797 (<1%) employing businesses with 200+ employees.

The survival rates for businesses operating since June 2003 varied significantly between the employing (87.3%) and the non-employing (53.8%) populations. In addition, for employing businesses, survival rates were slightly higher for businesses employing between 5-19 employees (90.4%) and 20-199 employees (90.2%).

In the period June 2005-06, entry rates were higher for non-employing businesses (18.4%) and business employing 1-4 employees (16.8%). Conversely, entry rates for businesses employing five or more employees were at noticeably lower levels. Exit rates over the same period were highest for non-employing businesses (18.2%) and businesses employing 1-4 employees (12.2%), but were lowest for businesses employing between 20-199 staff (6.1%).

ANNUAL TURNOVER SIZE RANGES

At June 2006, businesses reporting annual turnover between $50k to less than $200k made up the largest share of the total business population with 780,062 (39.7%). Businesses reporting annual turnover between $200k to less than $2m were next at 652,798 (33.2%), followed by businesses reporting between zero to less than $50k at 404,643 (20.6%), and businesses reporting $2m or more at 126,404 (6.4%).

The survival rates for businesses operating since June 2003 fluctuated across most turnover ranges, but were noticeably lower for those businesses reporting in the range $50k to less than $200k (59.8%).

In the period June 2005-2006, entry and exit rates were higher for businesses who reported annual turnover in the ranges $50k to less than $200k (18.0% and 18.1% respectively). Entry and exit rates were generally lower for businesses who reported annual turnover in the $2m or more range.