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8221.6 - Manufacturing Industry, Tasmania, 1999-2000  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 14/12/2001   
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ABS

Australian Bureau of Statistics

Amount exported by this business or its agent

This represents the sales value of goods produced by an establishment (or for it on commission), including the value of manufactured goods transferred to other establishments of the business unit for sale, that are exported (or are intended for export) outside Australia by the business unit or by its agent.

ANZSIC

Australian and New Zealand Standard Industrial Classification

Capitalised work done by own employees for own use or for rental or lease

Work done by the employees or proprietors of an establishment for use by the business or for rental or lease to other businesses that is capitalised. The main types of work included are the manufacturing, constructing, installing or repairing of assets and the in-house development of computer software. This work is valued at the capitalised costs of the materials and the wages and salaries involved.

Conceptually, under the current international standards, this item should also include own account mineral exploration and own account production of literary, entertainment or artistic originals. However, these activities are relatively unimportant for manufacturers and have not been measured for manufacturing industries.

Closing inventories

The value of all inventories of finished goods, work-in-progress, raw materials, fuels, containers and packaging at the end of the reporting period.

Commission manufacturing

Significant amounts of manufacturing are undertaken on a commission basis by one manufacturer on behalf of another or on behalf of a non-manufacturer for a fee. Typically, commission manufacturing involves a client commissioning the production of goods utilising materials provided by the client. Ownership of these materials remains with the client. Similarly, the goods made using these materials are owned by the client.

For the purposes of the estimates in this publication, the producing establishment reports the commission fee as service income and the wages and salaries and any other expenses incurred.

If the client is a manufacturing establishment, then in addition to data for their own manufacturing operations, the client reports the sales and inventories of the commissioned goods, the cost of the materials provided to the producing establishment, the commission fee paid and the value of any other intermediate inputs related to the commission transaction. If the client is not a manufacturing establishment, no data are reported by the client as they are excluded from the manufacturing collection.

Employment at end of June

The number of working proprietors and working partners, plus all employees for whom pay as you earn (PAYE) tax is deducted (including permanent, part-time, temporary and casual employees, and managerial and executive employees) during the last pay period ending in June each year. Non-salaried directors, self-employed persons such as consultants and contractors for whom PAYE tax is not deducted and volunteers are excluded.

Enterprise group

A unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law. These may be legal entities such as trusts and partnerships as well as companies. Majority ownership is not required for control to be exercised.

Establishment

The establishment is the smallest accounting unit of a business, within a State or Territory, controlling its productive activities and maintaining a specified range of detailed data i.e. the data needed to compile turnover, opening and closing inventories, purchases and transfers in, motor vehicle running expenses, freight and cartage expenses, commission expenses, rent, leasing and hiring expenses, and repair and maintenance expenses. In general, an establishment covers all operations at a physical location, but may consist of groups of locations provided they are within the same State or Territory. The majority of establishments operate at one location only.

Establishments that do not export

Establishments that reported no exports (either by their business or for them by an agent) of goods that they produced.

Establishments with exports of more than 50% of sales

Establishments that reported exports (either by their business or for them by an agent) of more than 50% of sales and transfers out of goods for sale that they produced.

Establishments with exports up to and including 50% of sales

Establishments that reported exports (either by their business or for them by an agent) of up to and including 50% of sales and transfers out of goods for sale that they produced.

Exports as a proportion of sales and transfers out of goods produced (table 4)

For an individual establishment, this represents the percentage of the total sales and transfers out of goods for sale produced by the establishment (or for it on commission) which are exported (or are intended for export) outside Australia by the business or by its agent. In table 4, the ratio is calculated by dividing the total value of goods exported by the total value of sales and transfers out of goods produced by all establishments not just the aggregated value for those units which exported. (The data in table 4 exclude those manufacturing establishments which operated during 1999-2000 but were not operating at 30 June 2000.)

Funding by Federal, State or Local Governments for operational costs

Funding by Federal, State or Local Governments for operational costs (e.g. wages and salaries, rent). Included are bounties, subsidies, export grants, and apprenticeship and traineeship schemes.

Industry class

Within ANZSIC, there is a structure comprising four levels ranging from industry division (broadest level) to the industry class (finest level). At the industry class level, the activities are narrowly defined and recognised by a four-digit code, e.g. Industry Class 2331 for Pulp, paper and paperboard manufacturing. Usually, an activity is primarily confined to one class. However, some activities may be primary to more than one class.

Industry division

Within ANZSIC, there is a structure comprising four levels ranging from industry division (broadest level) to the industry class (finest level). The main purpose of the industry division level is to provide a limited number of categories which give a broad overall picture of the economy. There are 17 divisions within ANZSIC each identified by an alphabetical letter, that is 'A' for Agriculture, forestry and fishing, 'B' for Mining, 'C' for Manufacturing, etc.

Industry gross product (IGP)

For periods prior to 1997-98, estimates of IGP represented the measure of the contribution by manufacturing industries to gross domestic product (GDP). However, commencing with estimates for 1997-98 following the introduction of new international standards for measuring economic variables, IGP has been replaced by the variable industry value added (IVA) for the purpose of measuring industry contribution to GDP.

The relationship between IVA estimates and IGP estimates is:

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


Industry group

This is the intermediate level within the manufacturing industry division of ANZSIC and is recognised by a three-digit code, e.g. Industry Group 233 for Paper and paper product manufacturing. It gives more detail than the industry subdivision and is created in a way that groups like industry classes together.

Industry subdivision

This is the broadest level category within the manufacturing industry division of ANZSIC and is recognised by a two-digit code, e.g. Industry Subdivision 23 for Wood and paper product manufacturing. Industry subdivisions are built up from industry groups which, in turn, are built up from industry classes. The following list gives the manufacturing industry subdivision codes and their descriptions:

21 Food, beverage and tobacco mfg

22 Textile, clothing, footwear and leather mfg

23 Wood and paper product mfg

24 Printing, publishing and recorded media

25 Petroleum, coal, chemical and associated product mfg

26 Non-metallic mineral product mfg

27 Metal product mfg

28 Machinery and equipment mfg

29 Other manufacturing

Industry value added (IVA)

IVA represents the value added by an industry to the intermediate inputs used by the industry. Commencing with estimates for 1997-98, IVA has replaced industry gross product (IGP) as the measure of the contribution by manufacturing industries to gross domestic product. See the entry for industry gross product for an explanation of the differences between IVA and IGP.

The derivation of IVA is as follows:

Turnover (new standards)
plus Closing inventories
less Opening inventories
less Intermediate input expenses (See the entry for operating expenses for
further detail)
equals IVA


However, it should be noted that IVA is not a measure of operating profit before tax. Wages, salaries and most other labour costs are not taken into account in its calculation and nor are most insurance premiums, interest expenses or depreciation and a number of lesser expenses (see the entry for operating expenses for further detail).

Industry value added (IVA) per person employed

IVA of manufacturing establishments which operated during the year ended 30 June divided by employment at the end of June in the same year.

Intermediate inputs

Intermediate inputs consist of materials and certain services which are used up in the production process. Definitions of relevant component items are also included in this Glossary. It is calculated as:

Intermediate input expenses (See the entry for
operating expenses for further detail)
plus Opening inventories
less Closing inventories


Management unit

The management unit is the highest-level unit within a business, having regard to industry homogeneity, for which accounts are maintained; in nearly all cases, it coincides with the legal entity owning the business (that is, company, partnership, trust, sole operator, etc.). In the case of large diversified businesses, however, there may be more than one management unit, each coinciding with a 'division' or 'line of business'. A division or line of business is recognised where separate and comprehensive accounts are compiled for it.

Manufacturing establishment

An establishment predominantly engaged in manufacturing activities. The data collected for such establishments cover all activities of the establishment (including non-manufacturing activities).

Manufacturing management unit

A management unit predominantly engaged in manufacturing activities. The data collected for such management units cover all activities of the management unit (including non-manufacturing activities).

Opening inventories

The value of all inventories of finished goods, work-in-progress, raw materials, fuels, containers and packaging at the beginning of the reporting period.

Operating expenses

For the purposes of calculating economic and accounting variables for manufacturing industries, operating expenses incurred by businesses are divided into several categories. However, some expenses are excluded entirely from all such calculations. These expenses are extraordinary expenses, capitalised expenses, income tax and other direct taxes, sales taxes and excise payable to Governments, capital repayments or losses on asset sales, dividends, donations or foreign exchange losses.

Remaining expenses are categorised as follows:

Intermediate input expenses

Intermediate input expenses cover the major expenses incurred by manufacturers in producing and distributing goods and services (except labour costs), namely:
  • purchases and transfers in of materials, components, containers and packaging materials, electricity, fuels and water, and purchases of goods for resale
  • motor vehicle running expenses, freight and cartage expenses, repair and maintenance expenses
  • rent, leasing and hiring expenses (except for finance lease payments)
  • contract, subcontract and commission expenses

Also included in the calculation of intermediate inputs are advertising expenses, audit and other accounting expenses, bank fees and charges (except interest), cleaning expenses, environmental protection expenses, intellectual property royalty expenses, legal fees, management fees, paper, printing and stationery expenses, postal and telecommunication expenses, staff training expenses, and travelling, accommodation and entertainment expenses.

Excluded from this category are selected labour costs and other operating expenses as defined below:

Selected labour costs
  • Wages and salaries including provisions for employee entitlements
  • Employer contributions into superannuation including salary sacrifice
  • Workers' compensation premiums/costs
  • Payroll tax and Fringe benefits tax

Other operating expenses

This group of expenses is not included in the calculation of the above economic variables but is included in the calculation of the accounting variable operating profit before tax. Included in this group of expenses are bad and doubtful debts, computer software expenses not capitalised by businesses, depreciation and amortisation, insurance premiums (except workers' compensation and compulsory third party motor vehicle insurance premiums), interest expenses, land rates and taxes, mineral/petroleum exploration expenses not capitalised by businesses, and natural resource royalties expenses.

Other intermediate input expenses

Intermediate input expenses less purchases and transfers in.

Own account capital work

Capitalised work done by the employees or proprietors of an establishment for use by the business or for rental or lease to other businesses. The main types of work included are the manufacturing, constructing, installing or repairing of assets and the in-house development of computer software. This work is valued at the capitalised costs of the materials and the wages and salaries involved.

Conceptually, under the current international standards, this item should also include own account mineral exploration and own account production of literary, entertainment or artistic originals. However, these activities are relatively unimportant for manufacturers and have not been measured for manufacturing industries.

Purchases

Purchases of materials, components, containers and packaging materials, electricity, fuels and water, and of goods for resale. The purchase of parts and fuel for motor vehicles run by businesses is excluded.

Purchases and transfers in

Purchases of materials, components, containers and packaging materials, electricity, fuels and water, and of goods for resale, plus transfers in of goods from other establishments of the same business for further processing, assembly, installation or for sale or resale. Transfers in are valued, for statistical purposes, at prices commensurate with the prices which would have been paid if the establishments concerned had been under separate ownership, i.e. at commercial selling price. The purchase of parts and fuel for motor vehicles run by businesses is excluded.

Reference period

Businesses are asked to report data for the financial year ended 30 June. However, if a business has a different financial year, it is asked to report for the 12-month period which ends between 1 October of the previous year and 30 September of the current year. This period is then used as a substitute for the financial year ended 30 June. For example, for the 1999-2000 collection, a business may have reported data for the year ended 31 December 1999.

Sales and transfers out of goods

Includes sales of goods whether or not produced by the establishment and sales of goods produced for the establishment on a commission basis (see the entry for commission manufacturing). Also includes transfers of goods to other establishments of the same business and installation and delivery charges not separately invoiced to customers. Progress payments relating to long term contracts are included if they are billed in the period. Sales are valued net of discounts given and exclusive of excise, sales tax and duties receivable on behalf of the Government. Exports are valued f.o.b. (i.e. export freight charges are excluded). Transfers to other establishments of the same business are valued, for statistical purposes, at commercial value (i.e. the value which would have applied had the establishments concerned been under separate ownership).

Sales and transfers out of goods produced (table 4)

Sales of goods produced plus transfers out of goods produced by this establishment. Transfers to other establishments of the same business are valued, for statistical purposes, at commercial value (i.e. the value which would have applied had the establishments concerned been under separate ownership).

Service income

Income received from service activities. Included are income from work done or sales made on a commission basis, income from repair, maintenance or servicing, installation and delivery charges separately invoiced to customers, advertising income and management fees/charges received from related or unrelated businesses. Service income is valued net of discounts given. For periods commencing with 1997-98, under new international standards, income from intellectual property royalties and rent, leasing and hiring income (except from finance leases) have also been classified as service income. Rent, leasing and hiring income is income derived from the ownership of land, buildings, vehicles, machinery or equipment, excluding any income from finance leases.

For further explanation on the treatment of commission manufacturing activities, see the entry for commission manufacturing.

Statistical division

A general purpose spatial unit and is the largest and most stable spatial unit within each State and Territory in the Main Structure of the Australian Standard Geographical Classification.

Turnover

Turnover comprises sales (exclusive of excise and sales tax) of goods whether or not produced by the establishment and transfers of goods to other establishments of the same business, plus service income, funding by Federal, State or Local Governments for operational costs, and own account capital work. Definitions of the various component items appear in this Glossary.

Excluded from turnover are interest income, income from natural resource royalties, funding by Federal, State or Local Governments for specific capital items, dividends, and receipts from the sale of fixed tangible assets.

There are some conceptual differences between turnover as calculated in this publication and turnover as defined by the current international standards. These differences are explained as part of the definition of the component item own account capital work. Full compliance with these standards would make very little difference to estimates of turnover.

Note (a): The above definition of turnover is used in calculating the variable industry value added. A slightly different definition of turnover was used prior to 1997-98 to calculate the now superseded variable industry gross product. This earlier definition excluded income from intellectual property royalties and the value of computer software developed in-house for use by the business or for rental or lease to other businesses.

Note (b): Transfers to other establishments of the same business referred to in the definition of turnover are valued, for statistical purposes, at commercial value (i.e. the value which would have applied had the establishments concerned been under separate ownership).

Note (c): A significant proportion of the commodities manufactured by some industries is manufactured on commission for non-manufacturing businesses from materials owned and supplied by those businesses. As a consequence, the turnover figures do not reflect the gross value of those commodities but only the commission earned relating to them.

Turnover per person employed

Turnover of manufacturing establishments which operated during the year ended 30 June divided by employment at the end of June in the same year.

Wages and salaries

The gross wages and salaries (including capitalised wages and salaries) of all employees of the establishment. The item includes severance, termination, and redundancy payments, salaries and fees of directors and executives, retainers and commissions of persons who received a retainer, bonuses, and, recreation and other types of leave. Provision expenses for employee entitlements (e.g. provisions for annual leave and leave bonus, long service leave, sick leave, and severance, termination and redundancy payments) are also included. Payments for salary sacrifice and payments to self employed persons such as consultants, contractors and persons paid solely by commission without a retainer, are excluded. The drawings of working proprietors and partners are also excluded.

Wages and salaries to turnover ratio

The wages and salaries paid by manufacturing establishments which operated during the year ended 30 June as a proportion of the turnover of manufacturing establishments which operated during the same year.

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