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5676.0 - Business Indicators, Australia, Sep 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 29/11/2004   
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SEPTEMBER KEY FIGURES

Jun Qtr 04 to Sep Qtr 04
Sep Qtr 03 to Sep Qtr 04
%
%

Sales of goods & services (Chain vol. meas.)
Manufacturing
Trend
-0.4
1.7
Seasonally Adjusted
-0.3
1.9
Wholesale trade
Trend
1.1
8.5
Seasonally Adjusted
-0.1
7.6
Inventories (Chain vol. meas.)
Trend
1.1
5.6
Seasonally Adjusted
0.3
4.7
Company profits before income tax
Trend
4.4
5.6
Seasonally Adjusted
18.2
17.2
Company gross operating profits
Trend
3.6
12.8
Seasonally Adjusted
3.6
12.9
Wages and salaries
Seasonally Adjusted
1.2
6.7

Inventories (volume terms), Trend estimates - Quarterly change
Graph: Inventories (volume terms)

Company gross operating profits (current prices), Trend estimates - Quarterly change
Graph: Company gross operating profits


SEPTEMBER KEY POINTS


TREND ESTIMATES

  • The trend estimate (in volume terms) for inventories for the September quarter 2004 increased 1.1% in the September quarter 2004, compared with an increase of 1.3% in the June quarter. The trend estimate (in volume terms) for sales of goods and services in Manufacturing has decreased in the latest quarter while Wholesale trade's sales of goods and services has continued the increases since March quarter 2001. The trend estimate (in current price terms) for company gross operating profits grew by 3.6% this quarter.


SEASONALLY ADJUSTED ESTIMATES
  • The seasonally adjusted estimate (in volume terms) for inventories increased by 0.3% in the September quarter 2004, with Wholesale trade the major contributor. Sales of goods and services in Manufacturing and Wholesale trade decreased by 0.3% and 0.1% respectively.
  • Company gross operating profits increased by 3.6% this quarter, with all industries other than Transport and storage and Other selected industries increasing. Growth in all industries except Wholesale trade, which was flat, has led to a 1.2% increase in wages and salaries.


NOTES

CHANGES IN THIS ISSUE

As happens each year, a seasonal re-analysis has been undertaken based on estimates up to and including the June quarter 2004. As part of this year's re-analysis, aggregation structures for company gross operating profits series were amended to bring the seasonal adjustment methodology more into line with that used for the equivalent National Accounts series. This has resulted in revisions to seasonally adjusted estimates for most time series for company gross operating profits by industry and at the total all industries level. The underlying price indexes used in the compilation of the chain volume measures have been reindexed resulting in minor revisions to the chain volume measures from September quarter 2000 onwards. Further changes in this issue are described on page 3.


COMPARISON BETWEEN COMPANY GROSS OPERATING PROFITS AND GROSS OPERATING SURPLUS

As has been the case in a number of recent quarters, price changes have had a significant impact on the value of inventories held by Australian businesses. An inventories valuation adjustment (IVA) is applied in the calculation of the gross operating surplus of private non-financial corporations (GOS) estimate in the Australian National Accounts. As prices for inventories have risen in the September quarter, growth in GOS will be lower after the application of the IVA. The IVA for the September quarter is approximately $1billion higher than for the June quarter. No adjustment is made to the company gross operating profits (CGOP) estimate in this publication and, as a result, users should exercise caution when comparing the two series. It should also be noted that there are other significant differences between the two series. In particular, changes are made to GOS when annual benchmarks are applied and different seasonal adjustment methods are used in the two series (note that while aggregation structures are now aligned, CGOP is adjusted using the concurrent method while GOS is adjusted using the forward factor method). Given this, while CGOP movements are an appropriate indicator for GOS, it is not the case that the two series will necessarily have equivalent seasonally adjusted movements from quarter to quarter.


REVISIONS IN THIS ISSUE

As is usually the case after the initial release of a quarter's estimates, revisions have been made to the June quarter 2004 estimates as a result of responses received or revised after the publication of the previous issue and the use of concurrent seasonal adjustment methodology. The net effect on June quarter 2004 estimates of these revisions has been to revise the seasonally adjusted chain volume estimates for total inventories by +0.7%, Manufacturing sales of goods and services by -0.8% and wholesale trade sales of goods and services by +2.0%. In addition, changes to the measurements of company gross operating profit and wages and salaries have meant a once off revision to these time series. See Technical Note 17 and 'Changes in this issue' section on page 3 for further details.


INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Mark Wise on Sydney (02) 9268 4241.


CHANGES IN THIS ISSUE


REVISIONS TO WAGES ESTIMATES

This issue contains substantial revisions to the time series for wages and salaries.

Since the December 2002 issue, adjustments had been made to the wages data sourced from the Quarterly Business Indicators Survey to remedy an apparent lack of coherence with other sources of information on wages and salaries. These adjustments to level estimates were made to September 2002 estimates and carried through in subsequent quarters.

Investigations made possible by the recent introduction of seasonally adjusted estimates indicate that the wages data sourced from the Quarterly Business Indicators Survey was, in fact, generally coherent with these other sources such as labour force and average weekly earnings.

Given this, these adjustments have been taken out of the time series. This has resulted in changes to level estimates of wages and salaries but, for the most part, quarterly movements as published in previous issues are unchanged.


REVISIONS TO COMPANY PROFITS AND COMPANY GROSS OPERATING PROFITS SERIES

As foreshadowed in last quarter's issue, this issue contains revisions to the series for company profits before income tax and company gross operating profits. The coverage of both series has been increased to include modelled data for businesses employing less than 20 employees and reported data for quasi-corporate enterprises. For practical purposes, quasi-corporate enterprises are defined as unincorporated businesses with 250 or more employees.

The series have been backcast to March quarter 2001, at which point there is a trend break from the older parts of the series, which contain data for incorporated businesses employing 20 or more employees.

While level estimates have increased, quarterly movements are generally comparable with the previously published series.


INTRODUCTION OF NEW GROSS OPERATING PROFITS SERIES

As also foreshadowed in last quarter's issue, this issue contains two new series. Both series commence from March quarter 2001.

Unincorporated gross operating profits contains estimates for unincorporated businesses, other than quasi-corporate enterprises.


Business gross operating profits contains estimates for all businesses. It is the sum of company gross operating profits and unincorporated gross operating profits. This series allows comparison with sales of goods and services, wages and salaries and inventories estimates, which are on the same scope.

In conjunction with this, the gross operating profits to sales ratio contained in Table 23 has been revised to include all businesses, rather than companies employing more than 20 employees.


ANALYSIS BY INDUSTRY


FEATURED SERIES

The following graphs and commentary refer to seasonally adjusted and trend estimates of: sales of goods and services ('Sales') and inventories ('Inv.') in volume terms; and wages and salaries ('Wages') and company gross operating profits ('CGOP') in current price terms.


TOTAL ALL INDUSTRIES

The trend estimate for total company gross operating profits has being growing since September quarter 2001, with growth of over 3% in each of the past three quarters. The seasonally adjusted estimate has grown strongly in the latest two quarters. Both the trend and seasonally adjusted estimates for wages and salaries increased by 1% in the latest quarter, continuing the increases experienced in each quarter since each series began in March quarter 2001.

Graph: Total All Industries - CGOP and Wages


The trend estimate for total inventories increased by 1% in the latest quarter. This continued the build up since the beginning of 2003, with Wholesale trade being the main driver. The seasonally adjusted estimate increased slightly in the latest quarter following sustained growth since March quarter 2003.

Graph: Total All Industries - Inventories



MINING

The trend estimate for company gross operating profits has increased strongly - by between 6% and 10% - in each of the latest three quarters after decreasing significantly in the previous four quarters. The seasonally adjusted estimate has increased very strongly in latest two quarters. The trend estimate for wages and salaries has also increased strongly in the latest three quarters, continuing the increases since the series began in March quarter 2001. The seasonally adjusted estimate has increased by between 1% and 4% in the latest three quarters.

Graph: Mining - CGOP and Wages


The trend estimate for sales of goods and services has decreased by 1% after being flat in the previous quarter. The seasonally adjusted estimate has decreased for the second successive quarter. The trend estimate for inventories has decreased in the latest three quarters following a strong build up in the previous three quarters. The seasonally adjusted estimate fell by 4% this quarter.

Graph: Mining - Inventories and Sales



MANUFACTURING

The trend estimate for company gross operating profits has increased by more than 4% in each of the latest four quarters. The seasonally adjusted estimate increased by 4% this quarter. The trend estimate for wages and salaries increased steadily in the latest quarter, continuing the increases since the series began in March quarter 2001. The seasonally adjusted estimate increased by 1% this quarter.

Graph: Manufacturing - CGOP and Wages


The trend estimate for sales of goods and services has decreased this quarter after being flat last quarter. The seasonally adjusted estimate has fallen for the second successive quarter. The trend estimate for inventories fell by 1% in each of the past two quarters, with the seasonally adjusted estimate also falling by 1% this quarter.

Graph: Manufacturing - Inventories and Sales



CONSTRUCTION

The trend estimate for company gross operating profits has increased by between 2% and 5% in each of the latest four quarters. The seasonally adjusted estimate remained relatively flat in the current quarter following a strong increase in the previous quarter. The trend estimate for wages and salaries has slowly decreased in the latest three quarters following steady growth in the previous eight quarters. The seasonally adjusted estimate remained flat this quarter.

Graph: Construction - CGOP and Wages


The trend estimate for sales of goods and services has decreased in the latest five quarters following sustained growth in the previous eight quarters The seasonally adjusted estimate decreased by 2% this quarter.

Graph: Construction - Sales



WHOLESALE TRADE

The trend estimate for company gross operating profits has increased by a small amount in each of the past five quarters. The seasonally adjusted estimate rose by 1% this quarter after a 2% fall last quarter. The trend estimate for wages and salaries has also had relatively weak growth in recent quarters, with this quarter's seasonally adjusted estimate being flat.

Graph: Wholesale Trade - CGOP and Wages


While trend estimates for sales of goods and services have continued to increase, growth rates have fallen over the past three quarters. This quarter's seasonally adjusted estimate was flat. Trend estimates for inventories have been growing at between 2% and 4% in each of the past seven quarters, with this quarter's 2% seasonally adjusted increase being the lowest since September quarter 2003.

Graph: Wholesale Trade - Inventories and Sales



RETAIL TRADE

The trend estimate for company gross operating profits has increased strongly in the latest two quarters, with a 28% seasonally adjusted increase this quarter. While, like CGOP, trend estimates for wages and salaries have been increasing for some time, the growth in the past two quarters has been relatively weak. The seasonally adjusted estimate grew by 2% this quarter.

Graph: Retail Trade - CGOP and Wages


Trend estimates for sales of goods and services have been growing for the past eight quarters, with this quarter's 2% increase being the largest over that period. The seasonally adjusted estimate grew by 3% this quarter. Trend estimates of inventories have increased over the last three quarters, with a 2% seasonally adjusted increase this quarter.

Graph: Retail Trade - Inventories and Sales



TRANSPORT AND STORAGE

After increasing strongly in each quarter of 2003-04, the trend estimate for company gross operating profits increased by just 1% this quarter. The seasonally adjusted estimate fell by 19%. Trend estimates for wages and salaries have increased by between 2% and 3% in each of the past four quarters following an extended period of weaker growth. The seasonally adjusted estimate increased by 2% this quarter.

Graph: Transport and Storage - CGOP and Wages


Trend estimates for sales of goods and services have been growing for five quarters, although the rate of growth has fallen recently with weak seasonally adjusted growth in the last two quarters.

Graph: Transport and Storage - Sales



PROPERTY AND BUSINESS SERVICES

The trend estimate for company gross operating profits continued to grow slowly, with growth in each of the past four quarters being at or below 2%. The seasonally adjusted estimate also increased, by 2%, this quarter. Growth in the trend estimate for wages and salaries has generally been slightly higher than for CGOP in recent quarters, with the seasonally adjusted estimate increasing by 4% this quarter.

Graph: Property and Business Services - CGOP and Wages


Trend estimates of sales of goods and services have been growing modestly over the past six quarters, with growth in each of these quarters being less than 2%. This quarter's 2% seasonally adjusted increase was the largest since September quarter 2003.

Graph: Property and Business Services - Sales

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