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Feature Article - Australia's Exporters, 2003-04


INTRODUCTION

This article is an analysis of the characteristics and international trading activities of Australian exporters in 2003-04, based on the Australian Business Number (ABN). It is the fourth issue in a series, with the earlier articles related to analyses for the July to December 2001, 2001-02 and 2002-03 reference periods. The first two issues covered both exporters and importers. Information on importers for 2003-04 will be included in a subsequent article to be released on 11 January 2005.

Estimates for exporters of merchandise goods (businesses that export goods) are compiled from data sourced from the Australian Customs Service (Customs) and from the Australian Taxation Office (ATO) Australian Business Register. Estimates for exporters of offshore services are also included, compiled from the ABS Survey of International Trade in Services (SITS).

As with the previous analyses, the estimates are subject to limitations in terms of the data available and methodology applied:

a. Eighty nine percent of export entries in 2003-04 had an ABN reported to Customs, accounting for 92% of the value of merchandise exports. The ABS used name information provided to Customs to clerically improve the identification of ABNs. The final proportion of the value of exports with an ABN was 98% (97% in 2002-03). To estimate the number of businesses accounting for the remaining exports, the ABS followed the methodology outlined in the Appendix to the article 'Experimental Estimates on Australia's Exporters and Importers' (available on the ABS web site);

b. Consistent with previous studies, businesses which exported goods totalling less than $10,000 in 2003-04 are excluded from the estimates of number of exporters;

c. Service exporters include businesses which provide services from their Australian base to consumers offshore, i.e. supply modes 1 and 4 in the classification used by the World Trade Organisation (WTO). However, smaller and / or occasional exporters are unlikely to come to ABS notice and are therefore not included in the estimates. The number of excluded businesses may be significant, but the value of their exports is not thought to be appreciable in the totality of service exports. The ABS continues to try to identify these businesses and incorporate them into its surveys;

d. Service exporters exclude businesses that only supply goods or services to foreign tourists or students in Australia (supply mode 2), such as hotels, restaurants, retail, tourist facilities, transport, theatres, educational institutions, etc. They also exclude Australian-owned businesses located overseas supplying goods or services in the country in which they are located (usually called foreign affiliates trade - supply mode 3), because their trade does not directly contribute to Australia's exports of goods and services; and

e. Australian businesses which supply goods or services to other businesses which undertake the exporting function are excluded. For example, many agricultural products are exported from Australia by wholesalers (such as commodity marketing boards) rather than by the producer; or some consultancy services which are exported may be composed of the work of a number of sub-consultants providing services to the principal consultant, who then exports the combined service.

Exports data used in this analysis were extracted from earlier publication cycles and hence, the value of exports of goods and services shown in the tables in this article are not consistent with that shown in the October 2004 issue of International Trade in Goods and Services, Australia (Cat. no. 5368.0). In addition, the value of goods exports is on a merchandise trade basis, while the value of service exports is on a balance of payments basis. This has no effect on the estimates of the number of exporters and minimal effect on the analysis of export values.

NUMBER OF EXPORTERS

As shown in Table F1, the number of exporters in 2003-04 was estimated to be 30,788, down 386 from the number of exporters in 2002-03. In the same period, the value of exports of goods and services fell by $5,070m, largely due to the decrease in exports of merchandise goods.

The number of goods exporters was estimated to be 29,555 in 2003-04, a decrease of 322 from the estimate in 2002-03. The number of service exporters fell by 167 to 2,139. Businesses exporting services worth less than $1m contributed mainly to this decrease. Of the businesses engaged in exporting services, 42% (906) were also goods exporters. By eliminating the duplication, the total number of exporters of goods and services was derived at 30,788.

TABLE F1: EXPORTERS
		Exporters			Exports
		2001-02	2002-03	2003-04	2001-02	2002-03	2003-04	2003-04
		no.	no.	no.	$m	$m	$m	%
Goods exporters
	$100m or more	210	195	192	84,580	77,664	73,777	67.7
	$1m and less than $100m	4,187	4,159	3,936	32,029	33,262	30,887	28.3
	$100,000 and less than $1m	9,202	9,535	9,361	3,038	3,116	2,998	2.8
	$10,000 and less than $100,000	16,642	15,988	16,066	663	610	593	0.5
	Other goods exporters(a)	. .	. .	. .	796	798	736	0.7
	Total goods exporters	30,241	29,877	29,555	121,106	115,450	108,991	100.0
Services exporters
	$100m or more	na	20	16	na	7,291	6,515	19.2
	$1m and less than $100m	na	712	743	na	6,790	7,516	22.1
	Less than $1m	na	1,574	1,380	na	577	303	0.9
	Total	2,250	2,306	2,139	16,605	14,658	14,334	42.2
	Other service exporters(b)	. .	. .	. .	15,645	17,911	19,624	57.8
	Total service exporters	2,250	2,306	2,139	32,250	32,569	33,958	100.0
Total exporters(c)		31,450	31,174	30,788	153,356	148,019	142,949	. .
. . not applicable
na not available
(a) Includes aircraft and ships fuel used in transit; exporters less than $10,000 (estimated at $66m).
(b) Includes travel, insurance, financial and government services. Numbers of exporters cannot be estimated for these service types, as the survey of International Trade in Services is not used to measure these exports.
(c) Total excludes duplication from businesses which export both goods and services.

In the 2003-04 analysis, attempts have been made to make the estimates consistent with the concepts and principles in the Balance of Payments Manual (BPM5). This lead to a redefinition of some special type of exports and exporters. One significant impact of this are in the revisions to the value estimates for other goods exporters. In previous years' analyses, this includes some identified overseas entities with large exports. In 2003-04, these were no longer considered as other goods exporters. They have been assigned Australian business ownerships or have been prorated into the other categories.

GOODS EXPORTERS

Export activity

A relatively small number of exporters still dominate Australia's goods exports. In 2003-04, there were 192 of these businesses with goods exports of $100m or more, accounting for two-thirds of the value of goods exports. Businesses with exports value of $1m and more were estimated to be 4,128 in total, down 226 (5%) on 2002-03. These exporters accounted for over 95% of the total value of goods exports.

The number of businesses with exports value of $100,000 and under $1m were down by 174 to 9,361. The most number of exporters were in the $10,000 and under $100,000 category, estimated to be at 16,066 in this period. They comprise over 50% of the total number of exporters but only 0.5% of total value. Overall, the total number of exporters was down 322 (1%) to 29,555 from the previous year.

There was a general decline across all exporter categories in the value of exports in 2003-04. Total goods exports fell by more than $6 billion from the previous year. The fall in value of exports was also reflected in the decline in the number of exporters.

There were an estimated 20,184 (68%) businesses in 2003-04 that also exported goods in 2002-03. This indicates that there were around 9,371 businesses that were not exporters in 2002-03. On the other hand, there was an estimated 8,796 (29%) exporters in 2002-03 that did not export in 2003-04. Further analysis of goods exporters also indicated that 2,672 businesses only re-exported goods in 2003-04 (up from 1,980 in 2002-03). Re-exports are goods that are imported and then exported in the same condition or after undergoing repair or minor alterations which leave them essentially unchanged. Minor alterations include blending, packaging and cleaning.

As shown in Table F2, 27% (7,899) of Australia's goods exporters exported only once or twice in 2003-04. The majority of these businesses (6,754) had exports worth less than $100,000. Businesses that exported no more than ten times in the year made up 62% of the total number of exporters.

F2: EXPORTS OF GOODS, Value of exports by Number of Customs entries - 2003-04
	Number of customs entries
Value of exports	1 - 2	3 - 10	11 - 20	21 - 50	51 or more	Total
Number of exporters
$100m or more	-	(a)	7	19	166	192
$1m and less than $100m	58	189	(b)156	825	2,708	3,936
$100,000 and less than $1m	1,086	2,625	2,019	2,537	1,094	9,361
$10,000 and less than $100,000	6,754	7,551	1,526	215	20	16,066
Total goods exporters	7,899	10,366	3,708	3,596	3,987	29,555
Exporters below $10,000 threshold	12,806	1,078	9	4	-	13,897
Values of exports ($m)
$100m or more	-	(a)	938	3,355	69,485	73,777
$1m and less than $100m	337	1,172	1,476	4,040	23,861	30,887
$100,000 and less than $1m	230	622	591	929	626	2,998
$10,000 and less than $100,000	192	284	100	16	1	593
Less than $10,000	59	7	-	-	-	66
Other goods exporters(b)	. .	. .	. .	. .	. .	670
Total goods exporters	818	2,085	3,105	8,340	93,973	108,991
. . not applicable
- nil or rounded to zero (including null cells)
(a) To protect data confidentiality, exporters with fewer than 11 Customs entries have been included in the category '11-20 Customs entries'.
(b) Estimate has a relative standard error of between 25% and 50% and should be used with caution.

Industry

The exporting business as defined in this analysis is the owner of the good at the time of export and not necessarily the producer of the good. In terms of value of exports, the most significant exporting industries (of the owning business) were manufacturing (40% of the value of goods exports), mining (31%) and wholesale trade (20%), as shown in Table F3. These three industries accounted for $100b (92%) of goods exported from Australia in 2003-04. The low value for agriculture, forestry and fishing reflects that most exports of agricultural commodities are made by commodity marketing authorities, which are classified as wholesalers.

The industries with the highest number of goods exporters in 2003-04 were wholesale trade (9,909) and manufacturing (9,117). Retail trade and property and business services registered the largest fall in the number of exporters while wholesale trade exporters were up in numbers by 533 to 9,909.

The average value of exports per business in 2003-04 was $3.7m. The industry with the highest average value was the mining industry with $69m per exporter. The next highest was manufacturing with $4.7m followed by electricity, gas and water supply with $2.8m worth of exports value per business. The lowest average value was in education industry with $0.1m per business.

Table F3: EXPORTS OF GOODS, Industry of exporter
	Number of Exporters(a)			Value of exports(b)
	2001-02	2002-03	2003-04	2001-02	2002-03	2003-04	2003-04
Industry of exporter	no.	no.	no.	$m	$m	$m	%
Agriculture, forestry and fishing	921.8	938	942	3,063	2,403	1,764	1.6
Mining	497	441	489	37,307	36,219	33,816	31.0
Manufacturing	8,850	9,148	9,117	45,717	45,590	43,249	39.7
Electricity, gas and water supply	81	50	(c)81	241	267	223	0.2
Construction	866	821	894	294	377	468	0.4
Wholesale trade	9,667	9,376	9,909	25,536	22,538	22,307	20.5
Retail trade	3,034	2,853	2,447	1,100	1,089	1,032	0.9
Accommodation, cafes and restaurants	118	(c)111	104	28	19	20	-
Transport and storage	1,159	1,022	907	2,008	1,849	1,410	1.3
Communication services	306	170	212	203	142	107	0.1
Finance and insurance	941	873	883	3,256	2,470	1,790	1.6
Property and business services	2,615	2,825	2,452	1,733	1,949	2,345	2.2
Government administration and defence	83	(c)132	(c)115	257	178	144	0.1
Education	160	81	80	14	11	9	-
Health and community services	211	235	(c)234	62	60	60	0.1
Cultural and recreational services	384	395	361	76	79	91	0.1
Personal and other services	286	(c)340	281	117	121	133	0.1
Other	62	66	48	91	89	22	-
Total goods exporters	30,241	29,877	29,555	121,106	115,450	108,991	100.0
- nil or rounded to zero (including null cells)
(a) Includes only those businesses that exported at least $10,000 of goods.
(b) Exports with no ABN reported (valued at $2.5b) were prorated across the industries that exported the same commodities. This includes $670m of aircraft and ships fuel used in transit and exporters with less than $10,000 exports.
(c) Estimate has a relative standard error of between 25% and 50% and should be used with caution.

Table F4 compares the industry of the exporting business with the industry of origin of the commodity exported. This shows that mining commodities had the highest proportion of exports (88%) by the industry that generally produced them i.e. the mining industry. By comparison, only 7% of Australia's $10.3b of agricultural, forestry and fishing commodity exports were exported by the agriculture, forestry and fishing industries. Most were exported by wholesalers (82%).

Exports of manufactured goods were $67.2b, of which $40.4b (60%) were exported by the manufacturing industry, $11.9b (18%) by the wholesale trade industry, and $8.1b (12%) by the mining industry. The manufactured goods exported by the mining industry were generally semi-processed materials.

TABLE F4: EXPORTS OF GOODS, Industry of Exporter by Commodity Industry of Origin - 2003-04
	Commodity industry of origin
Industry of exporter	Agriculture, forestry and fishing	Mining	Manufacturing	Other	Total goods exports
$ Million
Agriculture, forestry and fishing	751	np	1,011	np	1,764
Mining	np	25,521	8,119	np	33,816
Manufacturing	534	977	40,459	1,280	43,249
Wholesale trade	8,455	1,557	11,915	380	22,307
Finance and insurance	np	np	1,151	np	1,790
Property and business services	170	304	1,827	44	2,345
Other	231	410	2,797	281	3,720
Total goods exports	10,347	29,031	67,279	2,334	108,991
Percentage
Agriculture, forestry and fishing	7.2	np	1.5	np	1.6
Mining	np	87.9	12.1	np	31.0
Manufacturing	5.2	3.4	60.4	55.1	39.8
Wholesale trade	81.7	5.4	17.7	16.3	20.5
Finance and insurance	np	np	1.7	np	1.6
Property and business services	1.6	1.0	2.7	1.9	2.2
Other	2.7	0.8	4.1	13.4	3.2
Total goods exports	100.0	100.0	100.0	100.0	100.0
np not available for publication but included in totals where applicable, unless otherwise indicated

Size of Business

Two different size measures are used for goods exporters in this article. They are the value of exports (see Table F1) and size of the business (Table F5). Traditionally, the ABS has only used employment to determine the size of a business, because this has been the only sizing variable generally available. Many significant exporters were found not to have large employment.

For the purpose of this analysis, the size of a business has been defined in terms of three variables - employment, estimated annual turnover (both derived from Australian Taxation Office information) and value of exports (from Customs):

• small businesses - having fewer than 20 employees and estimated annual turnover less than $1m and exports of less than $1m during 2003-04;
• large businesses - having 200 or more employees or estimated annual turnover of $20m or more or exports of $20m or more during 2003-04; and
• medium businesses - all businesses other than those defined as small or large.

The 13,283 medium sized exporters were 45% of the total number and accounting for $9.5b (9%) of total goods exports. They were most prevalent in the manufacturing and wholesale trade industries, accounting for 62% of the total number of exporters in this category and 73% in terms of exports value.

Small business exporters numbered 12,391, representing 42% of total goods exporter numbers. They contributed $1.1b (1%) to the value of Australia's total goods exports.

TABLE F5: EXPORTS OF GOODS, Size of business by Industry of Exporter - 2003-04
	Number of exporters(a)				Value of exports
	Large	Medium	Small	Total(b)	Large	Medium	Small	Total
Industry of exporter	no.	no.	no.	no.	$m	$m	$m	$m
Agriculture, forestry and fishing	64	363	378	805	1,147	563	54	1,764
Mining	168	99	96	363	33,627	171	18	33,816
Manufacturing	1,290	4,029	2,122	7,441	39,474	3,524	251	43,249
Wholesale trade	933	4,258	2,886	8,077	18,509	3,424	374	22,307
Finance and insurance	98	116	352	566	1,512	231	47	1,790
Property and business services	185	742	1,052	1,979	1,744	472	129	2,345
Other	688	1,859	1,979	4,526	2,363	1,139	217	3,720
Industry not known	455	1,817	3,526	5,798	(c)	(c)	(c)	(c)
Total goods exporters	3,881	13,283	12,391	29,555	98,375	9,525	1,091	108,991
Percentage
Agriculture, forestry and fishing	8.0	45.1	47.0	100.0	65.0	31.9	3.1	100.0
Mining	46.3	27.3	26.4	100.0	99.4	0.5	0.1	100.0
Manufacturing	17.3	54.1	28.5	100.0	91.3	8.1	0.6	100.0
Wholesale trade	11.6	52.7	35.7	100.0	83.0	15.4	1.7	100.0
Finance and insurance	17.3	20.5	62.2	100.0	84.5	12.9	2.6	100.0
Property and business services	9.3	37.5	53.2	100.0	74.4	20.1	5.5	100.0
Other	15.2	41.1	43.7	100.0	63.5	30.6	5.8	100.0
Industry not known	6.2	31.3	62.3	100.0	(c)	(c)	(c)	(c)
Total goods exporters	13.1	44.9	41.9	100.0	90.3	8.7	1.0	100.0
- nil or rounded to zero (including null cells)
(a) Includes only those businesses that exported at least $10,000 of goods.
(b) The industry estimates of number of exporters differ from that reported in Table F3 because they do not include the estimated 5,798 exporters that reported no ABN. These are listed as 'Industry not known' in this table.
(c) Exports with no ABN reported (valued at $2.5b) were prorated across the industries that exported the same commodities.

State estimates

Two different concepts are used to measure the number of goods exporters by State in this article. The first measure is that of the number of businesses which exported goods that were produced in a given state i.e. the state of origin of the goods.

The second measure is that of the number of businesses which exported goods that were produced in a given state and had a business location in that state i.e. the state of location of the business. As there are businesses that exports from more than one state of origin, and may have more than one state of location, the state figures sum to more than the Australian totals i.e. the Australian figures count businesses with more than one state of origin or state of location once only.

The state of location estimates have been derived using four variables - postcode of the ABN, multi-state location indicator, industry (all from the ATO business registers) and value of exports (from Customs). An exporter has been defined as having locations in the state of origin if:

• the postcode of the exporter is the same as the state of origin; or
• the exporter has multi-state locations that include the state of origin; or
• the exporter was in the manufacturing or mining industry and reported $1m or more in goods exports from the state of origin.

These weaknesses in the data sources are expected to impact more on the state of location estimates for the smaller states than the larger states, where many head offices of multi-state businesses are located. Some businesses also have difficulty in identifying the state of production of some of their exports. This may disproportionately impact on the estimates for the smaller states.

As expected, the larger states had the highest proportion of exporters with locations in the state of origin. Over 70% of businesses with exports originating from New South Wales, Victoria, Queensland and Western Australia were identified as having business locations in those states.

Tasmania had 36% of businesses with state of origin and businesses location in the state. Northern Territory showed an increase from 48% in 2002-03 to a 66% share in 2003-04. Most exporters with no locations identified in the state of origin of the goods were wholesalers. Over 90% of the value of goods in NSW, VIC, QLD and WA were by businesses with locations in the state of origin.

TABLE F6: EXPORTS OF GOODS, State Estimates - 2003-04
	Exporters(a)			Value of exports
	Locations in state of origin	No locations in state of origin	Total	Locations in state of origin	No locations in state of origin	Total
State of origin	no.	no.	no.	$m	$m	$m
New South Wales	9,818	2,634	12,452	17,183	1,519	18,702
Victoria	7,935	2,607	10,542	16,432	1,196	17,627
Queensland	4,626	1,916	6,542	18,768	1,323	20,091
South Australia	1,810	1,100	2,910	5,565	2,072	7,637
Western Australia	2,909	984	3,892	29,958	2,589	32,547
Tasmania	231	411	642	1,656	664	2,320
Northern Territory	226	117	343	1,559	330	1,889
Re-exports	. .	. .	12,975	. .	. .	7,441
Other exporters	. .	. .	-	. .	. .	736
Total goods exporters(b)	. .	. .	29,555	87,619	12,464	108,991
. . not applicable
- nil or rounded to zero (including null cells)
(a) Includes only those businesses that exported at least $10,000 of goods.
(b) Businesses may export goods from more than one state.

As shown in Table F7, 30% of Australia's goods exports came from Western Australia followed by Queensland (18%), New South Wales (17%) and Victoria (16%). Western Australia and Queensland have a combined mining industry exports of $26b, representing 77% of total mining exports, while New South Wales and Victoria dominate in manufacturing exports with a combined value of $21b, representing 49% of total manufacturing exports.

TABLE F7: EXPORTS OF GOODS, Industry of Exporter by State of Origin of Commodity - 2003-04
	New South Wales	Victoria	Queens- land	South Australia	Western Australia	Tasmania	Northern Territory	Re-exports	Total goods exports(a)
Industry of exporter	$m	$m	$m	$m	$m	$m	$m	$m	$m
Agriculture, forestry and fishing	300	179	252	287	252	446	41	7	1,764
Mining	3,467	668	9,594	1,150	16,358	798	1,410	372	33,816
Manufacturing	9,184	11,826	4,981	3,969	9,310	749	np	np	43,249
Wholesale trade	4,327	4,211	3,762	2,040	5,483	202	116	2,166	22,307
Finance and insurance	395	262	142	43	575	38	np	np	1,790
Property and business services	451	216	934	65	305	17	np	np	2,345
Other	660	539	487	167	499	101	179	1,088	3,720
Total goods exports(b)	18,784	17,901	20,151	7,721	32,782	2,350	1,907	7,396	108,991
np not available for publication but included in totals where applicable, unless otherwise indicated
(a) Includes exports from the Australian Capital Territory.
(b) The total value of exports by state of origin differs in Tables F6 and F7 because in Table F6, exports by 'Other exporters' are separately identified whereas in Table F7, they were prorated across the industries that exported the same commodities.

Thirty five percent (743) of service exporters had exports worth between $1m and $100m, accounting for 22% ($7.5b) of total service exports. Sixty-four percent (1,380) of the businesses engaged in services exports had trade worth less than $1m. These accounted for $303m (1%) of services exports with average exports of $219,600 per business.

Service type

The service types with the highest numbers of exporters in 2003-04 were other business services (1,712), royalties and licence fees (1,024), personal, cultural and recreational services (829) and computer and information services (810), as shown in Table F8. Transportation services had the highest value of exports per business, averaging $88m per exporter in 2003-04.

Table F8: Exports of Services, Type of Service - 2003-04
	Exporters(a)	Total service exports	Total service exports	Average service exports per business
Type of service	no.	$m	%	$m
Transportation services	87	7,613	22.4	87.5
Travel services	(b)	17,108	50.4	(b)
Communication services	789	838	2.5	1.1
Construction services	262	85	0.3	0.3
Insurance services	(b)	686	2.0	(b)
Financial services	(b)	995	2.9	(b)
Computer and information services	810	1,126	3.3	1.4
Royalties and licence fees	1,024	601	1.8	0.6
Other business services	1,712	3,548	10.4	2.1
Personal, cultural and recreational services	829	523	1.5	0.6
Government services n.i.e.	(b)	835	2.5	(b)
Total service exporters	2,139	33,958	100.0	. .
. . not applicable (a) Businesses may export more than one type of service. (b) Number of exporters cannot be estimated as the Survey of the International Trade in Services is not used to measure exports of this service type.