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