QUALITY DECLARATION


INSTITUTIONAL ENVIRONMENT

The statistics presented in this release were derived using a combination of data collected directly by the Australian Bureau of Statistics (ABS) under the authority of the Census and Statistics Act 1905 and Business Activity Statement data collected by the Australian Taxation Office (ATO). The Income Tax Assessment Act 1936 provides for the ATO to pass information to the Australian Statistician for the purposes of the Census and Statistics Act 1905.

Please refer to ABS Institutional Environment for more information about the institutional environment of the ABS, including its legislative obligations, financing and governance arrangements and mechanisms for scrutiny of ABS operations. For more information about the institutional environment of the ATO, please refer to Part 3 Management and accountability in the Commissioner of Taxation Annual Report 2015-16.


RELEVANCE

The main purpose of the collection was to measure the size, structure and performance of Australian industry for use in the compilation of national accounts. The estimates permit analysis not only for a single reference period (2015-16) but also over time (annually from 2006-07).

The information is also used by government departments and economic analysts to assist in policy formulation and evaluation. Financial estimates include income, expenses, industry value added, and capital expenditure.

A range of performance measures, usually referred to as ratios, can be produced from the data available from businesses' financial statements. The performance measures presented in this publication comprise:

• profitability ratios, which measure rates of profit on sales
• debt ratios, which indicate the ability of businesses to meet the cost of debt financing
• investment ratios, which indicate the capacity of business to invest in capital assets
• labour measures, which relate to output, labour costs and employment.

The businesses that contribute to the statistics in this publication are classified:

• by institutional sector, in accordance with the Standard Institutional Sector Classification of Australia (SISCA), which is detailed in Standard Economic Sector Classifications of Australia (SESCA) (cat. no. 1218.0)
• by industry, in accordance with the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (cat. no. 1292.0)
• by state and territory
• by business size.

The scope of the collection included all businesses operating in the Australian economy during 2015-16, except for:

• in most industries, entities classified to the SISCA Sector 3 General government institutional sector. This exclusion particularly affects data presented for Public administration and safety, Education and training and Health care and social assistance (ANZSIC Divisions O, P and Q, respectively), in that the estimates relate only to private sector businesses. However, SISCA Sector 3 General government businesses classified to Water supply, sewerage and drainage services (ANZSIC Subdivision 28, within Division D) are included, so that the estimates include data (for example) for relevant local government organisations;
• entities classified to ANZSIC Division K Financial and insurance services, with the exception of Subdivision 64 Auxiliary finance and insurance services, which is now included as an experimental series, see the Appendix on Experimental estimates for ANZSIC Subdivision 64 Auxiliary Finance and Insurance Service in Australian Industry (cat. no. 8155.0). Note that estimates included in this publication for Total selected industries exclude Division K Financial and insurance services.
  

  Government owned or controlled Non-Financial Corporations are included.

Where businesses were unable to supply data for the 12 months ended 30 June 2016, an accounting period for which data can be provided is used for data other than those relating to employment.

Estimates of financial data in some industries, such as Mining and Manufacturing, are heavily impacted by fluctuating commodity prices. In these industries the reporting by businesses for an accounting period that is not for the period ended 30 June, can result in different estimates compared with what they would have been, had the businesses reported for an accounting period ended 30 June. Estimates of wages and salaries, total income, total expenses and industry value added which have been adjusted for the effects of off-June year reporting are presented in a data cube.

The collection was designed primarily to deliver national estimates for all in-scope industry divisions. State data were compiled for a restricted set of data items using a combination of data collected directly by the ABS and Business Activity Statement data collected by the ATO.
TIMELINESS

The collection is conducted annually with estimates generally available within twelve months of the reference period to which they relate. For the 2015-16 reference period, questionnaires were despatched by ABS in August 2016 and Business Activity Statement data were received from the ATO in November 2016. The estimates are scheduled for release in May 2017, almost eleven months after the end of the reference period.


ACCURACY

The ABS aims to produce high quality data from its industry collections while minimising the reporting burden on businesses. To achieve this, extensive effort is put into survey and questionnaire design, collection procedures and processing. The 2015-16 survey used generalised regression estimation. Generalised regression estimation is a form of ratio estimation which makes use of auxiliary data items which are strongly correlated with key data items directly collected by the ABS from businesses. The auxiliary variables used in this survey were turnover and wages from data sourced from the ATO. Use of this methodology allowed high quality statistics to be produced from a small, direct collect sample of 20,886 businesses.

Two types of error can occur in estimates that are based on a sample survey: sampling error and non-sampling error.

Sampling error occurs when a sample, rather than the entire population, is surveyed. It reflects the difference between estimates based on a sample and those that would have been obtained had a census been conducted. One measure of this difference is the standard error. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all businesses had been included in the survey, and about nineteen chances in twenty that the difference will be less than two standard errors.

Another measure of sampling error is the relative standard error, which is obtained by expressing the standard error as a percentage of the estimate to which it refers. The relative standard error is a useful measure in that it provides an immediate indication of the sampling error in percentage terms, and this avoids the need to refer also to the size of the estimate. Relative standard errors of key estimates are available in Technical Note 2: Data Quality in Australian Industry (cat. no. 8155.0).

Non-sampling error arises from inaccuracies in collecting, recording and processing the data. Every effort was made to minimise reporting error, by the careful design of questionnaires, intensive training of survey analysts, and efficient data processing procedures.

Non-sampling error also occurs when information cannot be obtained from all businesses selected in the survey. For the 2015-16 survey of Australian industry, there was an 86.4% response rate from all businesses that were surveyed and found to be operating during the reference period. Data were imputed for the remaining 13.6% of operating businesses. This imputation contributed 10.6% to the estimate of total income for Total selected industries.


COHERENCE

The ABS has been conducting annual surveys of Australian industry since 1990-91. A core set of data items has been collected each year. The definitions of these are reviewed each year and are refined or respecified as needed. Additional data items are collected in different years, in response to demand and priorities.

Since the 2006-07 reference year the survey has been conducted using ANZSIC 2006 and new methodologies. As a result, a new series of these estimates commenced from 2006-07.


INTERPRETABILITY

Estimates from the 2015-16 Economic Activity Survey are available as original series only, and are neither seasonally nor trend adjusted.

Although financial estimates in this release relate to the full twelve months, employment estimates relate to the last pay period ending in June of the given year.

Further information about terminology and other technical aspects associated with these statistics can be found in the publication Australian Industry (cat. no. 8155.0), which contains detailed Explanatory Notes, an appendix containing Experimental estimates for ANZSIC Subdivision 64 Auxiliary Finance and Insurance Services, a technical note on Estimation Methodology, a technical note on Data Quality, a technical note on State and Territory Estimates, a technical note on Finer Level Manufacturing Industry Estimates, a technical note on Off-June Year Adjusted Estimates, and a Glossary.


ACCESSIBILITY

Data from the 2015-16 Economic Activity Survey are available free of charge on the ABS website.