BUSINESS SIZE
Businesses in the Economic Activity Survey are classified to small, medium or large based on their employment size. Businesses employing 0-19 people are classified as small businesses, those employing 20-199 people are classified as medium sized and those employing more than 200 people are classified as large businesses.
The contribution of small, medium and large businesses varies from industry to industry, and in some industries it is not unusual for a business to have a large turnover but no employees. Business size is also dynamic from year to year: a business can change categories from one year to the next which can impact some results, particularly at the small and medium level. Annual estimates may also be influenced by large relative standard errors, so caution should be exercised when analysing movements.
Below are a few examples of industries made up of predominantly small or large businesses.
For more information and data classified by business size refer to Table 5 'Business size by industry division' in the 'Australian industry by division' data cube on the Downloads tab.
SMALL AND MEDIUM BUSINESSES VS LARGE BUSINESSES
For Total selected industries small and medium businesses outperformed large businesses for most key data items in 2016-17. The exception to this was Mining where large businesses outperformed small and medium businesses, recording a 115.2% ($20.1b) increase in operating profit before tax (OPBT) compared to 2015-16.
INDUSTRIES DOMINATED BY SMALL BUSINESSES
Small businesses are more likely than medium or large businesses to be sole proprietors and partnerships. Owner operators of these unincorporated businesses pay themselves out of business profits rather than receiving a wage or salary. This can have a distorting effect on their share of wages and salaries when compared to other key indicators.
In the Agriculture, forestry and fishing industry small businesses consistently dominate the industry. They accounted for 77.7% of employment in 2016-17, 75.2% of sales and service income and 88.6% of OPBT but only 53.5% of wages and salaries.
The Construction industry is also predominantly made up of small businesses, accounting for 71.1% of employment in the industry in 2016-17 and 73.8% of OPBT, but only 47.3% of wages and salaries.
Other industries with similar business size characteristics are Accommodation and food services and Rental, hiring and real estate services.
INDUSTRIES DOMINATED BY LARGE BUSINESSES
Large businesses tend to dominate industries with high barriers to entry or high capital density such as Mining, Electricity, gas, water and waste services and Information media and telecommunications.
In the Mining industry large businesses contributed 76.4% of total employment for the industry in 2016-17. The proportion of the total attributable to large businesses was consistently in the 72%-82% range across most key data items, except total expenses, where large businesses accounted for only 69.0% and OPBT where these businesses accounted for the majority of the growth in OPBT.
Large businesses accounted for 70%-80% of all key indicators in the Electricity, gas, water and waste services industry in 2016-17, and 67.0% of OPBT and 77.0% of sales and service income in the Information media and telecommunications industry.
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