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8221.0 - Manufacturing Industry, Australia, 2000-01  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 28/10/2002   
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ABS

Australian Bureau of Statistics

Acquisition of dwellings, other buildings and structures

Capital expenditure incurred acquiring dwellings, other buildings and structures, including roads, factories, warehouses, offices, bridges, etc.

Acquisition of other assets (including land and intangible assets)

Capital expenditure incurred acquiring other assets (including land and intangible assets). Intangible asset purchases may include items such as patents, licences and goodwill. Also included is computer software capitalised, including installation costs, the purchase or development of large data bases and software developed in-house (but excluded is software maintenance expenditure). Note that if the cost of software and hardware cannot be separated, the total cost is included in acquisition of plant, machinery and equipment.

Acquisition of plant, machinery and equipment

Capital expenditure incurred acquiring plant, machinery and other equipment. Note that this category includes the acquisition of motor vehicles.

Amount exported by this business or its agent

This represents the sales value of goods produced by the management unit (or for it on commission) that are exported (or are intended for export) outside Australia by the business or by its agent.

ASIC

Australian Standard Industrial Classification

ANZSIC

Australian and New Zealand Standard Industrial Classification

billion

One thousand million.

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

Work done by the employees or proprietors of a management unit 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.

Change in inventories

The value of total closing inventories minus total opening inventories.

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 business (i.e. management unit) reports the commission fee as service income and the wages and salaries and any other expenses incurred.

If the client is also a manufacturing business 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 business, the commission fee paid and the value of any other intermediate inputs related to the commission transaction. If the client is not a manufacturing business, no data are reported by the client as they are excluded from the manufacturing collection.

Employer contributions into superannuation including salary sacrifice

Included in this item are all employer contributions to superannuation funds (including the employer productivity contribution) and provisions for employer contributions to superannuation funds. Employee contributions are excluded.

Employment at end of June

The number of working proprietors and partners, plus all employees during the last pay period ending in June each year. Non-salaried directors, self-employed persons such as consultants and contractors, persons paid by commission only and volunteers are excluded.

Management units 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.

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 stablishment 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.

Exports as a proportion of sales of goods produced (table 6)

For an individual management unit, this represents the percentage of sales of goods produced by the business (or for it on commission) which are exported (or are intended for export) outside Australia by the business or by its agent. In table 6, the ratio is calculated by dividing the value of goods exported by the value of sales of goods produced by all businesses (i.e. management units) not just the aggregated value for those units which exported. (The data in table 6 exclude those manufacturing management units which operated during 2000-01 but were not operating at 30 June 2001.)

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
plusIntellectual property royalty expenses
lessIntellectual property royalty income
lessComputer software expenses not capitalised by the business
lessSelected indirect taxes (for manufacturing industries, the main types are fringe benefits tax, payroll tax, land rates and land taxes)
equalsIGP

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 GDP. See the entry for IGP for an explanation of the differences between IVA and IGP.

The derivation of IVA is as follows:

Sales and service income (new standards)
plusFunding by federal, state or local governments
for operational costs
plusOwn account capital work
plusClosing inventories
lessOpening inventories
lessIntermediate input expenses (for details, see the entry for operating expenses)
equalsIVA

However, it should be noted that IVA is not a measure of OPBT. Wage and salary expenses 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 management units 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 (for details, see the entry for operating expenses)
plusOpening inventories
lessClosing inventories

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 proprietorship, 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.

Management units that do not export

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

Management units with exports of more than 50% of sales

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

Management units with exports up to and including 50% of sales

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

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).

Net capital expenditure

The value of total capital expenditure less proceeds received from the disposal of assets.

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, goods and services tax (GST) 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 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)
  • commission payments to other businesses and self employed persons for work done or sales made on a commission basis without a retainer.

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

Selected labour costs are:
  • 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 OPBT. 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.

Own account capital work

Work done by the employees or proprietors of a management unit 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 iterary, 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 purchases of goods for resale. 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 2000-01 collection, a business may have reported data for the year ended 31 December 2000.

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 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. Management units 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.

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.

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

Sales and service income per person employed

Sales and service income of manufacturing management units which operated during the year ended 30 June divided by employment at the end of June in the same year.

Sales of goods produced (table 6)

Sales of goods produced by this management unit.

Total capital expenditure

The total capital expenditure on the acquisition of plant, machinery and equipment, dwellings, other buildings and structures, and of other assets (including land and intangible assets). Also included is capitalised work done for own use.

Total disposal of assets

Proceeds received from the disposal of plant, machinery, equipment, land, dwellings, other buildings and structures, and intangible assets.

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.

Note (a): The tables in Appendix 3 show selected data items, including turnover, for manufacturing establishments and management units for 1999-2000. Appendix 3 is designed to provide a bridge between the previous establishment based series and the new manufacturing management unit based series.

Note (b): Turnover data for manufacturing establishments includes transfers to other establishments of the same business. They 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): The turnover data for manufacturing management units shown in the tables in Appendix 3, by definition, exclude transfers out.

Wages and salaries

The gross wages and salaries (including capitalised wages and salaries) of all employees of the business (i.e. 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 annual 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 related to 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. Management units 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.

Wages and salaries to sales and service income ratio

The wages and salaries paid by manufacturing management units which operated during the year ended 30 June as a proportion of the sales and service income of manufacturing management units which operated during the same year.

Workers' compensation premiums/costs

As reported by providers.



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