8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 26/02/2016
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TECHNICAL NOTE 1 MEASURES OF BUSINESS GROWTH
2 In previous releases of CABEE, all data was presented in accordance with this equation at both a national level, and for selected classifications: industry, main state, institutional sector, type of legal organisation, employment size, and annual turnover size. 3 To ensure additivity, the classification values (e.g. industry code, main state, employment size range, etc.) attributed to each business were held constant over the lifetime of the business in previous editions. Specifically, for each business, the latest available data were used to overwrite any periods of conflicting or missing data. 4 The main issue with this approach is that it is possible for businesses to change their characteristics over time, particularly for employment size and annual turnover size. In fact, this change can be of interest in itself as business growth can be considered in terms of whether a business is increasing with respect to that characteristic, remaining stable, or decreasing in size over time. To address this, recent releases of CABEE have extended the standard equation for employment size and annual turnover size to:
EXAMPLE 5 Consider the following example involving a small business which is active during the 2011-12 and 2012-13 financial years. During this two year period, the business:
6 Under releases where classifications were held constant for each business at their latest available value, this business would have been included in the 5-19 employees category for June 2011, June 2012 and June 2013. This can result in some misunderstanding regarding the size of businesses in earlier time periods. 7 Now, under the new approach, the business would be classified according to its size for the respective year.
8 Using this approach, it is possible to present the change in business numbers (of surviving businesses) for different classifications (of employment size and annual turnover). For example, consider the following partial extract from Table 14 in the first data cube listed on the Downloads tab.
EXPLANATION OF CONTENTS Business Size Range Matrix 9 The primary purpose of the table is to quantify the businesses which grow or contract between financial years. The first five columns provide a cross-classified matrix which shows how many businesses were classified to one business size at the start of the financial year, and a different business size at the end of the financial year. 10 Note that the majority of businesses do not change their size category between years, and the counts of these businesses are represented along the main diagonal of the table. For example, 1,033,290 non-employing businesses at the end of June 2014 remained non-employing at the end of June 2015. Equally, 3,137 businesses in the largest size category at the end of June 2014 remained in the largest size category at the end of June 2015. In the above table, it can be seen that:
Inflow at End of Financial Year 11 The total number of business that moved into a size range from another range. Note that these businesses may have come from larger or smaller size ranges (depending on the range being analysed). Outflow at End of Financial Year 12 This column accounts for the total number of business that moved out of a size range into another range. Note that these businesses may have come from larger or smaller size ranges (depending on the range being analysed). Net Movement of Surviving Businesses 13 The net movement of surviving businesses for each range, i.e. accounting for all businesses that moved into (inflow) and out of (outflow) a particular size range. 14 The net movement of surviving businesses is calculated by taking total inflow at the end of the financial year minus total outflow at the end of the financial year. 15 The above information (particularly the last column) can then be included in the traditional business counts tables. A partial extract from Table 13 in the first data cube listed on the Downloads tab is included below.
16 Including the net movement of surviving businesses column in the employment size ranges table provides more detailed (point in time) information about the movement of businesses within specific business size ranges while maintaining additivity within each business size table. For example, the table above demonstrates that during 2014-15, the 114 change recorded for businesses employing 200 employees or more was partly driven by the 179 net movement of surviving businesses in this employment size range. That is, during 2014-15, there was a positive net movement of 179 existing small or medium businesses which grew to become large businesses. Application within Other Tables 17 While it is possible to develop similar tables and data cubes for the other classifications (industry, main state of operation, institutional sector and type of legal organisation) used in CABEE, ABS investigations have determined that relatively few businesses tend to change these classification values from year to year. Thus, allowing for the classifications to change over time appears to offer limited additional information while increasing the complexity of the tables (including introducing a need to confidentialise data for those rare changes in classification). For these reasons, additional tables for the non-business size range topics have not been created in this release of CABEE. Document Selection These documents will be presented in a new window.
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