8221.2 - Manufacturing Industry, Victoria, 1999-2000  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 27/11/2001   
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INTRODUCTION (1999 -2000 COLLECTION)

1 The current series of these publications, Manufacturing Industry, Australia, 1999-2000 (Cat. no. 8221.0) and Manufacturing Industry, [State], 1999-2000 (Cat. nos 8221.1-8221.6), will be the last that present data for manufacturing establishments. Future manufacturing collections will no longer collect data from manufacturing establishments. Starting with the 2000-01 manufacturing collection, data will be sought from a sample of approximately 9,000 manufacturing businesses nationally. For further information, see the Appendix.

2 This publication presents final statistics for Victoria compiled from a survey of manufacturing establishments for 1999-2000, with some comparative statistics relating to preceding years. The emphasis of this publication is on the release of statistics for the main data items included in the survey.

3 Manufacturing, as specified in Division C of the Australian and New Zealand Standard Industrial Classification (ANZSIC), broadly relates to the physical or chemical transformation of materials or components into new products, whether the work is performed by power-driven machines or by hand.

4 The manufacturing collection is conducted on an annual basis. For the 1999-2000 collection, a sample of approximately 17,000 manufacturing establishments nationally were asked to provide data on employment, wages and salaries, turnover, purchases and whether their products were exported. Data on industry value added (IVA) are also available from this collection. In addition, a variety of sub-samples was selected to produce data on a range of other variables. The next manufacturing census will be conducted in respect of 2001-02. However, fundamental changes will be made to the annual manufacturing collection, starting with the 2000-01 survey. For further information, see the Appendix.

5 Estimates of IVA were compiled using data from the 17,000 sample population and a sub-sample of approximately 7,000 establishments which were asked to provide detailed structural and performance data. These 7,000 establishments were also asked to supply value of sales for commodities produced. The availability of this fine level commodity/activity data for these units has enabled better identification of inscope establishments as well as providing a basis for an objective industry code to be allocated to responding units. A sample of approximately 5,500 manufacturing management units was asked the detailed information required to derive operating profit before tax. Selected data from the annual manufacturing collection and data from other collections are included in the compendium publication Manufacturing, Australia, 2001 (Cat. no. 8225.0).


SCOPE AND COVERAGE

6 The business unit for which statistics are presented in this publication is the establishment. A manufacturing establishment is one predominantly engaged in manufacturing activities, but the data collected for it cover all activities of the establishment (including non-manufacturing activities). Conversely, there are some establishments predominantly engaged in non-manufacturing activities which also undertake limited manufacturing activities; these are excluded from the collection.

7 A small number of manufacturing establishments engage, in a significant way, in a variety of activities which are normally carried out by different industries. For example, a predominantly manufacturing establishment may also undertake significant amounts of wholesaling. Similarly, a manufacturing establishment may produce significant volumes of a variety of goods which are normally produced in different manufacturing industries. In such cases, the original establishment is 'split' into a separate establishment for each significant activity which belongs to a separate industry. For the 1999-2000 manufacturing collection, 'significant' was defined as turnover of $7.3m or more.

8 The statistics in this publication exclude some very small manufacturers. Those excluded are manufacturers not employing staff at 30 June of the reference year (such as sole proprietorships or family partnerships) which had not registered as group employers (GE) with the Australian Taxation Office (ATO). Though a substantial number, these businesses would contribute only marginally to aggregate data were they to be included. In addition, the ABS attempts to obtain data for those businesses which ceased operation during the year, but it is not possible to obtain data for all of them.


STANDARD UNITS

9 For the definition of management units and establishments, the standard business units now in use, see the Glossary. However, fundamental changes will be made to the annual manufacturing collection, starting with the 2000-01 survey. For further information, see the Appendix.


RELIABILITY OF ESTIMATES

10 For information on this subject, see Technical Note 1.


DATA ADJUSTED

11 The annual manufacturing industry collection, 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 (ATO) Group Employer (GE) Scheme. Data in this issue continue to be adjusted to allow for lags in processing new businesses to the ABS business register, i.e. adjustments have been made to allow for new businesses which had commenced operations but for which details had not been processed to the ABS business register in time for inclusion in the annual manufacturing industry collection. Adjustments of this type will continue to be applied in future periods. The majority of businesses affected by these lags are small in size. The effect of these adjustments on 1999-2000 Victorian employment is an increase of 0.8% while the effect on turnover is an increase of 0.1%. All industry subdivisions were affected to a similar degree.

12 For some time now, the ABS has been using ATO information on GE registrations to add new businesses to the ABS business register. GE information is now also used to delete from the business register those businesses which had ceased trading or were no longer employing staff.

13 The process of using GE information to delete businesses from the ABS business register was introduced for the 1998-99 manufacturing survey. The result was that a large number of businesses were removed from the business register and, therefore, from the population for the 1998-99 manufacturing survey. Estimates for the previous three manufacturing surveys (covering 1995-96 to 1997-98 inclusive) were slightly adjusted in such a way as to phase in the impact over this time. For periods before 1995-96, the impact is estimated to have been negligible.

14 The same process for removing businesses from the ABS business register has occurred for the 1999-2000 collection and will continue to occur for future manufacturing collections. The impact of the ongoing process is expected to be negligible.


COMPARABILITY WITH PREVIOUS STATISTICS

15 Commencing with estimates for 1997-98, the definition of turnover has changed in line with new international standards for measuring economic variables. The composition of turnover estimates under the current standards is as follows:


Turnover (as previously defined)
plus Income from intellectual property royalties
equals Turnover (new standards)

16 Conceptually, some further differences exist between turnover on the old and current bases (particularly in relation to own account production of computer software, own account mineral exploration, and own account production of literary, entertainment or artistic originals). However, as these activities are relatively unimportant for manufacturing industries, no attempt has been made to measure them.

17 Commencing with estimates for 1997-98, under current international standards, contribution to gross domestic product (GDP) by manufacturing industries is being measured by the variable 'Industry value added' (IVA). Estimates for IVA measure the value added by an industry to the intermediate inputs used by that industry. Previously, the corresponding contribution to GDP was measured by the variable 'Industry gross product' (IGP). It should also be noted that IVA is not the same variable as 'Value added' which was published for manufacturing establishments until 1992-93.

18 Composition of IVA estimates and their relationship to IGP estimates are:


Turnover (new standards)
plus Closing inventories
less Opening inventories
less Intermediate input expenses (see the operating expenses entry in the Glossary)
equals IVA
IVA
plus Intellectual property royalty expenses
less Intellectual property royalty income
less Computer software expenses not capitalised by the business
less Selected indirect taxes (for manufacturing industries, the main types are fringe
benefits tax, payroll tax, land rates and land taxes)
equals IGP


19 Commencing with the 1994-95 manufacturing collection, multi-establishment management units have been 'collapsed' for reporting purposes into single establishment management units, unless they had significant activity in more than one industry and/or State or Territory. The effect of this process is that most manufacturing businesses which previously reported for more than one establishment were asked to combine operations by those establishments into a single reporting unit. The effect of this on manufacturing statistics as contained in this publication has been minimal.

20 For the 1995-96 collection only, provision expenses for employee entitlements were excluded from wages and salaries. For all other years, these provision expenses are included in wages and salaries.

21 Periodic collections of the Retail and Wholesale Divisions of ANZSIC, conducted for the 1998-99 reference year, identified a number of businesses which were predominately manufacturers. A small number of these cases were determined to be significant in some manufacturing industries and were therefore added into the manufacturing collection for 1998-99. The effect of these additional units in published aggregates have been calculated as adding 0.4% to both employment and turnover estimates for Victoria for 1998-99. These businesses were included in the 1999-2000 manufacturing collection if they remained classified as manufacturers on the ABS business register.


EMPLOYMENT SIZE DATA

22 Summary of operations data at the industry subdivision level classified by the employment size of individual manufacturing establishments (see the Glossary for its definition) are presented in table 3. Similarly, exports of goods produced data at the industry subdivision level classified by the broad employment size of individual manufacturing establishments are presented in table 4. The statistics in these two tables relate only to those manufacturing establishments operating at 30 June 2000. As such, the figures presented represent a slightly different population from those presented in the other tables from the manufacturing collection. These other tables include data for those manufacturing establishments which operated at any time during 1999-2000.

23 The treatment of unincorporated joint ventures under the ABS's standard units definitions has an effect on the data when classified by employment size. This is because joint venture participants report details of turnover, but often have few or no employees or operating expenses. The labour for such operations is usually employed and paid for by the joint venture operator. Similarly, the operating expenses are usually reported by the joint venture operator. On the other hand, the operator does not report any details of turnover (unless it also happens to be a participant). If each of these joint venture operations were to be treated as a single business unit in the statistics, it is highly probable that the Metal product manufacturing industry would reflect a similar dominance pattern to the other manufacturing industries. In other words, in the statistics in tables 3 and 4, the participants in unincorporated joint ventures are recorded in the 0-4 persons employment size category, whereas the operators of the unincorporated joint ventures are recorded in larger employment size categories. This treatment affects the relative contribution of the various employment size categories for this industry.


EXPORTS BY MANUFACTURERS

24 All establishments included in the manufacturing collection were asked whether they exported and, if so, what percentage of their sales of goods produced plus transfers out of goods produced by the establishment for sale were exported by their business or an agent on their behalf. The data presented in table 4 are derived by applying the percentage of exports reported for each exporting unit and then aggregating that figure. The data in table 4 exclude those manufacturing establishments which operated during 1999-2000 but were not operating at 30 June 2000.

25 The statistics presented in table 4 for the value of exports by manufacturers or their agents are not intended to be directly comparable with the value of exports classified by manufacturing industry of origin as published by the ABS in international trade statistics. These latter statistics are intended to measure total exports regardless of which business or organisation does the exporting (and to identify the probable industry from which the goods originated), whereas the statistics in tables 4 and 5 only include exports directly undertaken by the manufacturer or by its agent.

26 The data in table 4 showing exports by manufacturers or their agents can be expected to show a much lower value than the exports data from the international trade series. The main reason is that for many exports of goods manufactured in Australia, the actual exporting activity is undertaken by a business other than the manufacturer. Also, the value of goods produced on a commission or fee basis for non-manufacturing businesses and which are then exported is not included in the data in tables 4 and 5. Examples of relevant commission work are the 'slaughtering fee' charged by an abattoir for processing livestock owned by a meat exporter and the 'tolling fee' charged by an aluminium smelter to process ores owned by other (e.g. mining) businesses. Also excluded from tables 4 and 5 are any exports by manufacturers of goods which were not produced by that manufacturer. These and other goods exported (e.g. re-exports) are included in the international trade data. Finally, differences in valuation of exports arise because the value of exports in the international trade series would include the value to the manufacturer plus profit margins for the exporter and for any intermediaries between the manufacturer and the exporter.


REGIONAL DATA

27 Investigations carried out by the ABS have shown that it is possible to produce some regional or sub-State estimates in survey collection years. Limited Statistical Division data are currently available from the 1997-98 and 1998-99 manufacturing surveys, on request, for a charge. Similar sub-State data from the 1999-2000 manufacturing survey, will be available later this year, after the release of the Manufacturing Industry, [State], 1999-2000 publication series. Regional or sub-State estimates will not be available from the 2000-01 manufacturing survey, for further information see the Appendix. For further details about the availability of sub-State data, please contact John Ridley on Sydney 02 9268 4541.


ACKNOWLEDGEMENT

28 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


INFORMATION PAPER

29 The Information Paper: Availability of Statistics Related to Manufacturing (Cat. no. 8205.0) outlines the vast amount of data that are published or available on request from the annual manufacturing industry collection, as well as data from other ABS collections.


RELATED PUBLICATIONS

30 A series of publications Manufacturing Industry, [State], 1999-2000 (Cat. nos 8221.1-8221.6) will be produced for each State. The publication for New South Wales (Cat. no. 8221.1) also contains selected data for the Australian Capital Territory. These publications are being released progressively.

31 Users may also wish to refer to the following publications:
  • Australian National Accounts: State Accounts, 1999-2000 (Cat. no. 5220.0), released on 23 November 2000 - Annual publication
  • Business Operations and Industry Performance, Australia, 1999-2000 (Cat. no. 8140.0), released on 25 October 2001 - Annual publication
  • Business Operations and Industry Performance, Australia, Preliminary, 1999-2000 (Cat. no. 8142.0), released on 10 May 2001 - Annual publication
  • Environment Protection Expenditure, Australia, 1995-96 and 1996-97 (Cat. no. 4603.0), released on 2 July 1999 - Biennial publication
  • Information Paper: Availability of Statistics Related to Manufacturing, 1996 (Cat. no. 8205.0), released on 21 March 1996 - Irregular publication
  • Information Paper: Availability of Statistics Related to Manufacturing, 1997 (Cat. no. 8205.0), released on 16 January 1998 - Irregular publication
  • Information Paper: Improvements to ABS Economic Statistics, 1997 (Cat. no. 1357.0), released on 22 August 1997 - Irregular publication
  • Inventories and Sales, Selected Industries, Australia (Cat. no. 5629.0) - Quarterly publication
  • Labour Force, Australia (Cat. no. 6203.0) - Monthly publication
  • Manufacturing, Australia, 2001 (Cat. no. 8225.0), to be released in December 2001 - Annual publication
  • Manufacturing Industry, Australia, Preliminary, 2000-01 (Cat. no. 8201.0), to be released in March 2002 - Annual publication


BACK SERIES AND ADDITIONAL DATA

32 A considerable volume of data is available from the annual manufacturing collection. Firstly, a range of manufacturing industry statistics publications is available for previous years. In addition, more detailed information to satisfy individual user requirements may be available on request and for a charge. In general, this consists of finer industry dissections of data than that presented in the manufacturing series of publications. The information paper (Cat. no. 8205.0) referred to in paragraphs 29 and 31 provides more details.


ROUNDING

33 Where figures have been rounded, discrepancies may occur between totals and the sums of the component items. Due to data being adjusted for lags in processing new businesses to the ABS business register (see paragraph 11), this 'rounding rule' also applies to employment counts.

34 Proportions, ratios and other calculated figures shown in this publication have been calculated using unrounded estimates and may be different from, but are more accurate than, calculations based on the rounded estimates.