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8201.0 - Manufacturing Industry, Australia, Preliminary, 2000-01  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 27/03/2002   
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INTRODUCTION

1 This preliminary publication presents the first set of statistics compiled from the 2000-01 manufacturing collection, where the management unit was the sole statistical unit used to collect data. In previous years, the collection was largely based on establishment statistics with some information collected from a small sample of management units. While establishment data are no longer available, the new arrangements provide a substantial improvement in the quality of management unit data. For more information about these changed collection arrangements and how they affect data outputs, see the Appendix.

2 Manufacturing, as specified in Division C of the Australian and New Zealand Standard Industrial Classification (ANZSIC), broadly relates to the physical or chemical transformation of materials or components into new products, whether the work is performed by power-driven machines or by hand.

3 The manufacturing collection is conducted on an annual basis. For the 2000-01 collection, a sample of approximately 9,500 manufacturing management units was asked to provide data on employment, wages and salaries, detailed structural and performance data, value of sales for commodities produced, and whether their products were exported. Data on industry value added (IVA) are also available from this collection. Approximately 400 of these management units were also asked for details of their operations by State and Territory to facilitate the production of the State/Territory estimates contained in this publication.


SCOPE AND COVERAGE

4 The business unit for which statistics are presented in this publication is the management unit. A manufacturing management unit is one predominantly engaged in manufacturing activities, but the data collected for it cover all activities of the management unit (including non-manufacturing activities). Conversely, there are some management units predominantly engaged in non-manufacturing activities which also undertake limited manufacturing activities; these are excluded from the collection.

5 Some manufacturing management units engage, in a significant way, in activities which are normally carried out by different industries. For example, a predominantly manufacturing management unit may also undertake significant amounts of wholesaling. Similarly, a manufacturing management unit may produce significant volumes of goods which are normally produced in different manufacturing industries. For 2000-01 and prior years, no management units have been 'split' to allocate significant secondary activities in another industry to a separate unit.

6 The statistics in this publication exclude some very small manufacturers. Those excluded are manufacturers not employing staff at 30 June 2001 (such as sole proprietorships or family partnerships) which had not registered with the Australian Taxation Office's (ATO's) pay as you go withholding (PAYGW) scheme (and prior to 1 July 2000 its group employer (GE) scheme). Though a substantial number, these businesses would contribute only marginally to aggregate data were they to be included. In addition, the ABS attempts to obtain data for those businesses which ceased operation during the year, but it is not possible to obtain data for all of them.


DATA ADJUSTED

7 The annual manufacturing industry collection, like most ABS economic collections, takes its frame from the ABS business register. The register provides a list of employing businesses and is primarily based on registrations to the ATO’s PAYGW scheme (and prior to 1 July 2000 its GE scheme). The register is updated regularly to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes.

8 Businesses which have ceased employing are identified when the ATO cancels their PAYGW registration (or previously their GE registration). In addition, from 1998-99, businesses which did not remit under the GE scheme for the previous five quarters were removed from the register. A similar process will be adopted to remove businesses which do not remit under the PAYGW scheme.

9 The introduction of The New Tax System has a number of significant implications for ABS economic collections. These are discussed in Information Paper: ABS Statistics And The New Tax System (Cat. no. 1358.0). The replacement of the GE registration process by PAYGW registration resulted in a number of changes to the population frames used for most economic collections. However, adjustments have been made to the estimates so that these changes do not affect the statistics in this publication.

10 As in past years, data in this issue have been adjusted to allow for lags in processing new businesses to the ABS business register, i.e. adjustments have been made to allow for new businesses which had commenced operations but for which details had not been processed to the ABS business register in time for inclusion in the annual manufacturing industry collection. Adjustments of this type will continue to be applied in future periods. The majority of businesses affected by these lags are small in size. The effect of these adjustments on 2000-01 Australian estimates are increases of 2.8% for employment and 1.3% for sales and service income. Most States and Territories and most industries were affected to a similar degree.


CHANGES FROM 2000-01 COLLECTION

11 As from the 2001-02 collection, the annual manufacturing survey will move to a new collection strategy utilising the greater availability of taxation data. This will result in a new suite of annual publications which will be further described in Manufacturing Industry, Australia (Cat. no. 8221.0) which is scheduled for release in September 2002.


UNIT DEFINITIONS

12 Management unit. The management unit is the highest-level accounting 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 (i.e. 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. A management unit consists of one or more establishments.

13 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.


DATA ITEM DEFINITIONS

14 Employment at end of June. The number of working proprietors and partners, plus all employees during the last pay period ending in June 2001. Non-salaried directors, self-employed persons such as consultants and contractors, persons paid by commission only and volunteers are excluded. Businesses with significant activities in more than one State/Territory were asked to report employment at the end of June for each State/Territory in which the business operated.

15 Wages and salaries. The gross wages and salaries (including capitalised wages and salaries) of all employees of the management unit. 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 recreation 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. Businesses with significant activities in more than one State/Territory were asked to report wages and salaries for each State/Territory in which the business operated.

16 Sales and service income. Sales of goods whether or not produced by the business (including goods produced for the business on a commission basis) and income from service activities. Both are valued net of discounts given and exclusive of Goods and Services Tax (GST). Sales of goods includes progress payments relating to long term contracts if they are billed in the period and delivery charges not separately invoiced to customers, but excludes excise and duties receivable on behalf of the Government. Exports are valued free on board (f.o.b.) (i.e. export freight charges are excluded). Service income includes income from work done or sales made on a commission basis, income from repair, maintenance or servicing, advertising income, installation and delivery charges separately invoiced to customers, and management fees/charges received from related and unrelated businesses. Businesses with significant activities in more than one State/Territory were asked to report sales and service income for each State/Territory in which the business operated.

17 Under the current international standards, income from intellectual property royalties and rent, leasing and hiring income (except from finance leases) are also classified as service income. Rent, leasing and hiring income is income derived from the ownership of land, buildings, vehicles, machinery or equipment, excluding income from finance leases.

18 Turnover. Sales and service income, funding by Federal, State or Local Governments for operational costs, and capitalised work done by the business' own employees or proprietors for use by the business unit or for rental or lease to other businesses. 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. Conceptually, turnover also includes transfers out of goods by establishments. From the 2000–01 collection, data are no longer collected from establishments. Hence, the previously published turnover data item has been replaced by the sales and service income data item.

19 Industry value added (IVA). IVA represents the value added by an industry to the intermediate inputs used by the industry. The derivation of IVA is as follows:

Turnover
plus Closing inventories
less Opening inventories
less Intermediate input expenses
equals IVA

20 However, it should be noted that IVA is not a measure of operating profit before tax. Wage and salary expenses and most other labour costs are not taken into account in its calculation nor are most insurance premiums, interest expenses or depreciation and a number of lesser expenses.


CHAIN VOLUME MEASURES

21 Chain volume measures are included in this publication as a measure of growth in volume.

22 Chain volume measures compiled by the ABS are annually reweighted chain Laspeyres volume measures. They are formed in a multi-stage process of which the major steps are described in Chapter 10 of the Australian System of National Accounts: Concepts, Sources and Methods, 2000 (Cat. no. 5216.0). Chain volume measures used in this publication have 1999-2000 as the base year.


RELIABILITY OF ESTIMATES

23 Data in this publication are based on information obtained from a sample of manufacturers. As such, these data are subject to sampling variability; that is, they may differ from the figures that would have been produced if the data had been obtained from all manufacturers in the population. The measure of the likely difference as used by the ABS is given by the standard error, which indicates the extent to which an estimate might have varied by chance because the data were obtained from only a sample of units. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if the data had been obtained from all units, and about 19 chances in 20 that the difference will be less than two standard errors.

24 The standard error can also be expressed as a percentage of the estimate, and this is known as the relative standard error. The relative standard errors for the data in this publication are nearly all 3% or less for Australian estimates. Relative standard errors across all States and Territories are generally higher. Detailed estimates of relative standard errors can be made available on request.

25 The imprecision due to sampling variability, which is measured by the standard error, should not be confused with inaccuracies that may occur because of inadequacies in available sources from which the population frame was compiled, imperfections in reporting by providers, errors made in collection such as in recording and coding data, and errors made in processing data. Inaccuracies of this kind are referred to collectively as non-sampling error and they may occur in any enumeration, whether it be a census or a sample. Every effort is made to reduce non-sampling error to a minimum by the careful design of forms and the use of efficient and effective operating procedures and systems.


ACKNOWLEDGMENT

26 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


RELATED PUBLICATIONS

27 More detailed manufacturing industry statistics will be released in the publication Manufacturing Industry, Australia, 2000-01 (Cat. no. 8221.0), which will be released in September 2002. State publications (Cat. nos 8221.1-8221.6 inclusive) will not be produced for the 2000-01 survey - see the Appendix for more information. Manufacturing Industry, Australia, 2000-01 (Cat. no. 8221.0) will contain details of employment, wages and salaries, sales and service income and IVA classified by ANZSIC class, as well as ANZSIC subdivision data classified by employment size and data relating to exporting activity. It will also contain details classified by ANZSIC subdivision of the components of IVA, on the acquisition and disposal of assets, and for selected labour costs. Manufacturing, Australia, 2002 (Cat. no. 8225.0), a compendium publication, is to be released in December 2002. In general, preliminary 2000-01 data for all variables and table formats can now be made available on a consultancy basis.

28 The ABS produces industry estimates for a range of selected industries (including Manufacturing) and these results are available in Australian Industry (Cat. no. 8155.0). State and Territory estimates of these data have recently been produced in Experimental Estimates, Australian Industry, a State Perspective (Cat. no. 8156.0). These data are considered experimental at this stage while the methodology used to produce them is reviewed and improved. The estimates are available at the ANZSIC industry subdivision level for total operating income, total operating expenses, operating profit before tax (OPBT) and labour costs.


ROUNDING

29 Where figures have been rounded, discrepancies may occur between totals and the sums of the component items. However, estimates of change shown in the Main Features have been calculated using unrounded estimates and may be different from, but are more accurate than, movements obtained from the rounded estimates.


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