VALUE OF GOODS AND SERVICES PRODUCED BY INDUSTRIES
One measure of the importance of an industry is its contribution to the Australian economy. The size of the Australian economy is typically described in terms of GDP, and the structure and performance of the economy in terms of industry gross value added (GVA).
GDP is an estimate of the total market value of goods and services produced in Australia in a given period after deducting the cost of goods and services used up in the process of production (intermediate consumption), but before deducting consumption of fixed capital. This is also described as the unduplicated value of economic production. This measure avoids double counting the goods and services produced at successive stages of production. Accordingly, it is a measure of the value added in production.
Industry GVA is the term used to describe the unduplicated value of goods and services produced by individual industries. This measure removes the distortion caused by variations in the incidence of commodity taxes and subsidies across the output of individual industries. Movements in the chain volume measures of GDP and industry GVA (from which the direct effects of price changes have been removed) are important indicators of economic growth. More information is provided in the National accounts chapter.
Table 13.1 provides details of industry GVA and GDP for 2003-04. Data are presented at a broad industry level, generally equating to the Division level of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 1993 edition (1292.0). In the ANZSIC, individual businesses are assigned an appropriate industry category on the basis of their predominant activities. The table provides estimates of the unduplicated production of goods and services (industry GVA) in 2003-04, along with percentage changes from 2002-03 and average annual rates of growth between 1993-94 and 2003-04.
In 2003-04 the value of Australian production (GDP) was $787 billion (b) (in chain volume terms), an increase of 3.8% from 2002-03. The average annual rate of growth in GDP between 1993-94 and 2003-04 was 3.9%. In 2003-04 the ratio of GDP to the estimated resident population (GDP per person) was $39,120.
13.1 INDUSTRY GROSS VALUE ADDED(a) AND GROSS DOMESTIC PRODUCT, Chain volume measures(b)
Average annual rate
of growth from
1993-94 to 2003-04
|Agriculture, forestry and fishing|
|Electricity, gas and water supply|
|Accommodation, cafes and restaurants|
|Transport and storage|
|Finance and insurance|
|Property and business services(c)|
|Government administration and defence|
|Health and community services|
|Cultural and recreational services|
|Personal and other services|
|Ownership of dwellings|
|Taxes less subsidies on products|
|Gross domestic product|
|(a) At basic prices.|
(b) Reference year is 2002-03.
(c) Excludes ownership of dwellings.
(d) Chain volume measures for 1993-94 are not additive.
Source: Australian System of National Accounts, 2003-04 (5204.0).
Graph 13.2 shows industry GVA shares of GDP (in current prices) in 2003-04. The manufacturing industry contributed the largest share to GDP (10.9% or $88b) in 2003-04. This was followed by the property and business services industry (10.5% of GDP or $86b). The finance and insurance industry was the third most important industry in terms of contribution to GDP, contributing 7.6% or $62b.
Between 1993-94 and 2003-04, the greatest relative increase in industry GVA share of GDP was for the property and business services industry (up 1.8 percentage points). The next largest increases were for the finance and insurance (1.3 percentage points), and construction (0.8 percentage points) industries.
In the same period, the greatest fall in relative shares of GDP was for the manufacturing industry (down 2.0 percentage points). The next largest decreases in relative shares were for the electricity, gas and water supply industry (0.8 percentage points) followed by agriculture, forestry and fishing (0.4 percentage points) and mining, wholesale trade, and education industries, all of which had a decrease in relative share of GDP of 0.3 percentage points.
Graph 13.3 shows the average annual rate of growth in GVA (in chain volume terms) for individual industries between 1993-94 and 2003-04. The communication services industry had the highest average annual rate of growth (7.1%), followed by property and business services (5.6%) and construction industries (5.2%). Average annual growth rates provide an indicator of the broad underlying behaviour of the annual series over several years. These averages, however, smooth annual movements in the series and mask the highest and lowest annual movements.
The average annual growth rates shown were affected by year-on-year changes in levels between 1993-94 and 2003-04. In terms of year-on-year changes, the fastest growing industry in this period, the communication services industry, showed strong and relatively steady increases in GVA from 1993-94 to 1998-99. After this period, the year-on-year increases were much lower. In the twelve months following 2002-03 production of the communication services industry rose by 3%.
The year-on-year changes for the agriculture, forestry and fishing industry varied significantly over time. While the value of production (GVA) of this industry grew by only 2.7% on average each year between 1993-94 and 2003-04, its GVA fell by 17% between 1993-94 and 1994-95 and by 24% in the period 2001-02 to 2002-03, due largely to the effects of drought on agricultural production. Over the 10-year period, 1993-94 to 2003-04, the largest year-on-year growth followed the recent drought with a 27% increase between 2002-03 and 2003-04.
Another industry that had been subjected to quite significant variation in year-on-year changes especially in recent years, is the construction industry. In the period 2001-02 to 2002-03 the value of production (GVA) of the construction industry grew by 16%, with the previous annual period (2000-01 to 2001-02) also recording strong growth (12%). This growth followed a fall of 14% between 1999-2000 and 2000-01, coinciding with the introduction of The New Tax System in July 2000. On average, GVA of this industry grew by 5.2% each year in the period 1993-94 to 2003-04.