Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Statistical snapshot: small business contribution to economic performance in Australia



Download PDFDownload PDF

ISSN 2203-5249

RESEARCH PAPER SERIES, 2015-16 2 DECEMBER 2015

Statistical snapshot: small business contribution to economic performance in Australia Geoff Gilfillan

Statistics and Mapping Section

Executive summary • Small businesses make a significant contribution to the total value of industry output but a much smaller contribution to the value of total exports.

• Small businesses contributed just under a third (33.1 per cent) of total industry value added in the economy in 2013-14. This compares with a contribution of 40.5 per cent in 2006-07.

• Small business industry value added (IVA) grew by $8.1 billion or 2.4 per cent in the 12 months to June 2014.

• There were 19,970 small business exporters operating in June 2014 that accounted for 44.1 per cent of all exporting firms

• Goods exported by small firms were valued at $1.4 billion in 2013-14 which represents 0.5 per cent of the total value of all exports.

Introduction This statistical snapshot outlines the contribution of small business to the Australian economy as measured by industry value added and value of export performance.

Definition of small business The ABS defines a small business as a business employing fewer than 20 people. Categories of small businesses include:

• Non-employing businesses (sole proprietorships and partnerships without employees)

• Micro-businesses (businesses employing between 1 and 4 people including non-employing businesses)

• Other small businesses (businesses that employ between 5 and 19 employees)

Medium sized businesses employ between 20 and 199 employees while large businesses employ 200 employees or more.

Statistical snapshot: small business contribution to economic performance in Australia 2

Small business contribution to industry value added Industry value added (IVA) is the measure of the contribution by private businesses in each industry to Gross Domestic Product (GDP)1. Small business IVA totaled $343.4 billion in 2013-14—$8.1 billion or 2.4 per cent more than the previous financial year.

The major industry contributors to small business IVA in 2013-14 were:

• Rental, hiring and real estate services—$53.8 billion or 15.7 per cent of small business IVA (and 5.2 per cent of total IVA)

• Construction—$50.4 billion or 14.7 per cent of small business IVA (and 4.9 per cent of total IVA)

• Professional, scientific and technical services—$42.5 billion or 12.4 per cent of small business IVA (and 4.1 per cent of total IVA).

Table 1: Value and share of Industry Value Added (IVA) by small businesses by industry

Small

business IVA ($billion)

Share of small business IVA (%) Total IVA

($million) Share of total IVA (%)

Agriculture, forestry and fishing 22.0 6.4 27.5 2.1

Mining 12.5 3.6 124.5 1.2

Manufacturing 18.5 5.4 97.5 1.8

Electricity, gas, water and waste services 2.8 0.8 44.0 0.3

Construction 50.4 14.7 108.4 4.9

Wholesale trade 22.6 6.6 66.8 2.2

Retail trade 24.3 7.1 71.4 2.3

Accommodation and food services 12.3 3.6 37.0 1.2

Transport, postal and warehousing 15.5 4.5 67.0 1.5

Information Media & Telecommunications 2.6 0.8 35.9 0.3

Rental, hiring & real estate services 53.8 15.7 67.4 5.2

Professional, scientific & technical services 42.5 12.4 102.3 4.1

Administrative and support services 13.6 4.0 50.2 1.3

Public administration and safety (private) 1.2 0.4 5.7 0.1

Education and training (private) 3.5 1.0 23.7 0.3

Health care and social assistance (private) 25.3 7.4 66.6 2.4

Arts and recreation services 2.6 0.8 11.7 0.3

Other services 17.3 5.1 29.6 1.7

TOTAL SELECTED INDUSTRIES 343.4 100.0 1,037.2 33.1

Source: ABS, Australian Industry, cat. no. 8155.0, Table 5.

Small businesses contributed just under a third (33.1 per cent) of all IVA in the economy in 2013-14. This compares with a 44.4 per cent contribution by larger firms while medium sized firms contributed 22.5 per cent. The contribution of small businesses to total IVA in 2013-14 is down on its 40.5 per cent share of total IVA achieved in 2006-07.

1. GDP Is the total market value of goods and services produced in Australia within a given period after deducting the cost of goods and services used up in the process of production but before deducting allowances for the consumption of fixed capital.

Statistical snapshot: small business contribution to economic performance in Australia 3

Table 1: Industry value added by firm size

Firm size

2003- 04 2004- 05

2005- 06 2006- 07

2007- 08 2008- 09

2009- 10 2010- 11

2011- 12 2012- 13

2013- 14

Small ($billion) 218.5 233.7 263.7 289.6 300.0 283.2 312.8 325.8 340.9 335.3 343.4

Medium ($billion) 118.5 127.3 139.6 145.3 168.8 196.6 188.4 215.2 229.1 226.2 233.6

Large ($billion) 210.9 236.8 263.4 280.8 302.3 354.1 357.0 401.6 433.0 439.7 460.2

TOTAL ($billion) 547.9 597.7 666.7 715.7 771.1 833.9 858.1 942.6 1002.9 1001.2 1037.2

Small business share of total IVA (%) 39.9 39.1 39.6 40.5 38.9 34.0 36.4 34.6 34.0 33.5 33.1

Source: ABS, Australian Industry, Cat. no. 8155.0, Table 5.

Figure 1: Contribution to total industry value added by firm size—2008-09 to 2013-14

Source: ABS, Australian Industry, 2013-14, Cat. No. 8155.0, Table 5.

34.0 36.4 34.6 34.0 33.5 33.1

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Per cent

large

medium

small

Statistical snapshot: small business contribution to economic performance in Australia 4

Figure 2: Small business industry value added—2002-03 to 2013-14

Source: ABS, Australian Industry, 2013-14, Cat. No. 8155.0, Table 5.

Small business contribution to exports Small businesses account for 44.1 per cent of all exporting firms but are a much smaller player in terms of their contribution to the value of exports.

The latest ABS data for 2013-14 shows:

• there were 19,970 small business exporters operating in June 2014 that accounted for 44.1 per cent of all exporting firms2

• the number of small business exporters grew by 1,600 or 8.7 per cent in the 12 months to June 2014

• goods exported by small firms were valued at $1.4 billion in 2013-14 which represents only 0.5 per cent of the value of all exports (at $272.9 billion). Large firms accounted for $260 billion (or 95.1 per cent of the value of all exports) and medium sized firms accounted for $12 billion (or 4.4 per cent). Large mining companies were the biggest contributor, accounting for 56.0 per cent of the value of all exports in 2013-143.

• small business exporters engaged in wholesale trade accounted for 39.5 per cent of the total value of exports by small businesses in 2013-14, while small manufacturing exporting firms contributed 18.8 per cent4.

2. Includes small, medium and large sized businesses who supplied and did not supply an ABN number. Businesses who did not supply an ABN number accounted for 12.6 per cent of all exporting firms. 3. Includes value of exports for small, medium and large sized businesses who supplied and did not supply an ABN number. Businesses that did not supply an ABN number only accounted for 0.4 per cent of the total value of all exports 4. Industry shares refer to the share of total value of exports of small business operators who supplied an ABN number. Note that the industry of

small business exporters could only be determined for those providing an ABN number. Small business exporters that did not supply an ABN accounted for 14.6 per cent of the total value of exports by small businesses.

343.4

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

$ billion

Statistical snapshot: small business contribution to economic performance in Australia 5

Figure 3: Small business exports—2013-14

Contribution to number of exporting firms (%) Contribution to value of total exports (%)

Source: ABS, Characteristics of Australian Exporters, 2013-14, Cat. No. 5368.0.55.006, Table 5.1.

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library’s Central Entry Point for referral.

95.1

4.4

0.5

Large

Medium

Small

9.9

46.1

44.1 Large

Medium

Small