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5368.0 - International Trade in Goods and Services, Australia, Feb 2006  
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FEATURE ARTICLE: NEW METHODOLOGY FOR DERIVING COUNTS OF AUSTRALIAN EXPORTERS


INTRODUCTION

The ABS has released a series of articles on the number and characteristics of Australian exporters, covering the 2001-02 to 2003-04 reference periods. The information presented in these articles was compiled as a by-product of producing statistics on Australia's merchandise trade and international trade in services.


The introduction of the Customs Integrated Cargo System (ICS) in October 2004, with its requirement for Australian-based businesses exporting goods to lodge their Australian Business Number (ABN) with their export shipments, has enhanced the quality of information about exporters and provided the ABS with an opportunity to review existing compilation methods and outputs.


This review has confirmed that the quality of the information available to produce counts and characteristics of exporters has improved but data post the introduction of ICS are not entirely comparable with data from earlier periods.


This information paper sets out:

      1. why there is a break in series for exporter counts and characteristics
      2. the number of exporters
      3. the tables to be included in future articles and other data available on request
      4. the timing of future releases
      5. the concepts and compilation issues underlying the collection of exporter statistics
      6. abbreviations.


1. WHY THERE IS A BREAK IN SERIES FOR EXPORTER COUNTS AND CHARACTERISTICS

Prior to the introduction of ICS the Customs system was not designed to collect ABN. While ABN could be entered into a field, it had to have specific text in front of it for the system to recognise it as an ABN. This method was not as reliable as that introduced with ICS and previous counts of exporters included an estimate for a significant proportion of exporters who did not quote their ABN.


Prior to ICS, export transactions without an ABN generally included the name of the exporter but did not have any other unique business identifier. For transactions with the largest value of exports, the exporter's name was matched against the Australian Business Register (ABR) to, where possible, identify an ABN. However, it was not practical to do this clerical matching for all export transactions without an ABN and a statistical sampling method was used to estimate the number of exporters for the remaining transactions without an ABN. This method estimated the number of additional exporters by:

  • selecting a random sample of exporter names;
  • clerically matching the names against the ABR to identify an ABN where possible;
  • comparing the newly identified ABNs against the existing file of exporter ABNs; and removing those that matched;
  • weighting the remaining newly identified ABNs to represent the number of exporters of transactions without an ABN.

In 2003-04 there were 200,000 export transactions without an ABN and it was estimated that these transactions represented 5,798 additional exporters (or 20% of all goods exporters above the $10,000 value threshold that was applied).


In 2004-05 there were 58,000 export transactions without an ABN. Approximately 50,000 of these transactions occurred prior to the introduction of ICS. Post ICS, exporters without an ABN apply to Customs for an unique identifier, the Customs Client Identifier (CCID). Exporters without an ABN requiring a CCID include businesses not based in Australia and individual persons.


The combination of ABN and CCID provides a good basis for determining a more accurate count of exporters without having to rely on the statistical sampling methodology. This results in a break in the count of exporters series because the statistical sampling method involved a bias, which cannot be quantified, in addition to a sampling error. The actual value of exports impacted by the problems described above would not be large, but the impact on counts could be more significant. As ICS was introduced during 2004-05 it is not possible to produce an accurate count of exporters for this financial year.


These problems only relate to counts of goods exporters for the financial year in which ICS was introduced. The problems do not impact on counts of exporters for international trade in services.



2. NUMBER OF EXPORTERS

Exporters of Goods

In calendar year 2005 there were 40,797 exporters of merchandise goods. Of these, 37,766 businesses (93%) reported an ABN and 3,031 (7%) lodged their export shipments by CCID. It is estimated that 993 of these businesses were also exporters of services.


As detailed in part 1 above, the calendar year 2005 count of goods exporters is obtained directly from information provided by exporters and their agents on export documentation and has no sampling error. The 2003-04 financial year estimate of all goods exporters was 43,452 but this had a relative standard error of 1% which means that there was a 95% probability that the "true" count of exporters fell within the range 42,583 and 44,320. In addition, the methodology for the 2003-4 estimate included a bias that could not be quantified. For these reasons the 2003-04 estimate and earlier estimates are not directly comparable to subsequent estimates.


Estimates for the largest size category (exports of goods worth $100m or more) for 2003-04 did not involve sampling error and can be compared. In 2003-04 there were 192 of these largest exporters and they exported 68% of the value of all goods. In 2005 there were 205 of these exporters and they exported 74% of the value of all goods.


In 2005, 29% of all exporters had exports of goods worth less than $10,000 and the total value of the goods they exported was less than 1% of the total value of all goods exported.

TABLE 1: GOODS EXPORTERS BY VALUE OF EACH BUSINESS' EXPORTS, 2005

Number of Exporters
2005
Contribution to total number
2005
Value of Exports
2005
Contribution to total value
2005
Goods exporters by value of each business' exports
no.
%
$m
%

$100m or more
205
0.5
103 071
74.2
$1m and less than $100m
3 876
9.5
32 085
23.1
$100,000 and less than $1m
9 180
22.5
3 081
2.2
$10,000 and less than $100,000
15 574
38.2
573
0.4
less than $10,000
11 962
29.3
52
-
Total goods exporters
40 797
100.0
138 862
100.0

- nil or rounded to zero (including null cells)


Exporters of Services

The methodology for compiling counts of exporters of services remains unchanged from previous periods. Businesses providing insurance, financial, government or travel services are not included in these estimates unless they are in scope of the Survey of International Trade in Services for other service exporting activities.


In 2004-05 there were 2,092 exporters of services, a decrease of 47 (2%) on 2003-04. In 2004-05, 21 exporters of services had exports worth $100m or more accounting for 20% of Australia's services exports. While 1,337 businesses had services exports worth less than $1m (or 64% of all services exporters) they accounted for less than 1% of the value of services exports, with average exports of $207,000 per business.

TABLE 2: SERVICES EXPORTERS BY VALUE OF EACH BUSINESS' EXPORTS, 2004-05

Number of exporters
Value of exports
Contribution to total value
2002-03
2003-04
2004-05
2002-03
2003-04
2004-05
2004-05
Services exporters by value of business' exports
no.
no.
no.
$m
$m
$m
%

$100m or more
20
16
21
7 291
6 515
7 443
20.4
$1m and less than $100m
712
743
734
6 714
7 538
7 175
19.7
Less than $1m
1 574
1 380
1 337
577
303
277
0.8
Other services exporters(a)
. .
. .
. .
19 309
20 816
21 592
59.2
Total services exporters
2 306
2 139
2 092
33 891
35 172
36 487
100.0

. . not applicable
(a) Includes travel, insurance, financial and government services


For more information on the concepts and compilation issues underlying the collection of exporter statistics refer to part 5.



3. TABLES TO BE INCLUDED IN FUTURE ARTICLES AND OTHER DATA AVAILABLE ON REQUEST

It is anticipated that a range of tables will be released annually, free of charge on the ABS website. The tables include:


Number of exporters of goods and services and value of exports by:

  • value of each business' exports

Number of exporters of goods and value of exports by:
  • number of Customs transactions by value of each business' exports
  • industry of the exporter
  • size of the business by industry of the exporter
  • main state of the exporter by state of location of the exporter

Value of exports by:
  • industry of the exporter by the industry of origin of commodity
  • industry of the exporter by the state of origin of commodity

Number of exporters of services and value of exports by:
  • type of service

It will also be possible to undertake a limited range of additional analyses on goods exporters as a fee for service consultancy. This analysis could include:
  • data on the country of final destination of exports
  • a further breakdown of small exporters by state of location of the exporter.


4. FUTURE RELEASES

Additional information for 2005 and information for 2005-06 presented according to the tables described in part 3 will be released on the ABS website in October 2006.



5. CONCEPTS AND COMPILATION ISSUES UNDERLYING THE COLLECTION OF EXPORTER STATISTICS

Details of the main concepts and limitations associated with counts and characteristics of exporters have been presented in previous articles and are summarised here. While the information available after the full implementation of ICS more effectively identifies unique exporters, the caveats described below still apply to counts and characteristics of exporters of goods and services.


What is an exporter?

An exporter is defined as the owner of the exported good or the provider of the exported service. Using balance of payments principles, if an export takes place, it must involve a resident selling something to a non-resident i.e. it involves a change of ownership from an Australian resident to a non-resident. International trade in services statistics are compiled on balance of payments principles and only cover transactions between Australian residents and non-residents.


Information on exporters of goods are compiled from merchandise trade statistics and are usually, but not always, consistent with balance of payments principles. In a small number of cases a non-resident may own the goods at the time of departure. As there would have been a transaction between an Australian resident and a non-resident prior to the goods physically leaving Australia, it is assumed, for the purpose of these statistics, that all owners of goods at the time of their export goods are Australian residents and are therefore included in the counts of exporters.


There are a number of situations that impact on the interpretation of the count and characteristics of exporters including:


a. exports of goods excludes export consignments with a value of less than $2,000. Prior to July 2002 exports of goods excluded individual transaction lines (within an export consignment) with a value of less than $500


b. Australian businesses that sell goods or services to other Australian businesses which undertake the exporting function are excluded, for example:

  • many agricultural products are exported from Australia by wholesalers (such as commodity marketing boards) rather than by the producer
  • a principal consultant may export a consultancy service which comprises the work of a number of Australian sub-consultants
  • a business may export a product which is assembled from components made by a number of Australian businesses.

Some analysts include the individual businesses providing commodities, components, other goods or services for export in their definition of 'exporters' or at least consider them to be involved in export-related activity. However, unless the businesses actually own the goods or provide the service at the time of export, they are not included in the ABS count of exporters.


c. Service exporters include businesses which provide services from their Australian base to consumers offshore, i.e. supply modes 1 and 4 in the classification used by the World Trade Organisation. However, smaller and/or occasional exporters are unlikely to come to ABS notice and are therefore not included in the estimates. The number of excluded businesses may be significant, but the value of their exports is not thought to be appreciable in the totality of service exports. The ABS continues to try to identify these businesses and incorporate them into its estimates.


d. Service exporters exclude businesses that only supply goods or services to foreign tourists or students in Australia (supply mode 2), such as hotels, restaurants, retail, tourist facilities, transport, theatres, educational institutions, etc. In concept these businesses should be included in counts of exporters. However, estimates of these services are compiled from information obtained from the consumers of these services rather than from the businesses providing the services.


e. Goods and services exporters exclude Australian-owned businesses located overseas supplying goods or services in or from the country in which they are located (supply mode 3 and usually called foreign affiliates trade), because their trade does not directly contribute to Australia's exports of goods and services.


Apart from the exclusions mentioned above, businesses which export goods or services in a particular year are counted as exporters regardless of the value or frequency of their exports. The main count of exporters presented in previous articles excluded those exporters with a value of goods exported less than $10,000. In future articles all exporters will be included but, where appropriate, tables will be presented showing number of exporters by a range of export values and number of goods exporters by number of export transactions. This information could be analysed when considering issues, like the identification of businesses with an export focus.


Characteristics information obtained from the ABR

To help clients interpret data on the number of exporters, the ABN is used to obtain selected information on businesses from the ABR. The information obtained includes:

  • industry of the business based on the Australian and New Zealand Standard Industry Classification (ANZSIC)
  • main state of the business
  • states in which the business is located
  • number of payees and Goods and Services Tax (GST) turnover range. These indicators are used in determining the size of the business.

The following issues should be considered when interpreting information from the ABR about exporters:
  • information may have been valid when a business initially registered to the ABR but may not have been subsequently updated following changes, like establishing a location in another state;
  • a business may have more than one ABN and the ABN quoted on export documentation may be the ABN of a part of the business not actually producing the exports. As a result, characteristics obtained from the ABR (eg. the main state or the industry of the business) could relate to a head office; or
  • a business located in a particular state may export goods produced in different states.

The characteristics listed above can not be obtained for exporting businesses without an ABN. Each affected table will indicate how these businesses have been treated.


The ABS is developing a business longitudinal database that will provide a better basis for analysing information about the characteristics of businesses. It is anticipated that for the small and medium sized businesses, the business longitudinal database will provide the opportunity to compare the characteristics of exporting and non-exporting businesses engaged in similar activities. Further information on the business longitudinal database can be obtained from Graeme Thomas by emailing graeme.thomas@abs.gov.au or by phoning (02) 6252 7327.


Business Size

Exporter counts are presented by business size. The ABS discussed the size classification to be used for counts of businesses in the information paper, A Statistical View of Counts of Businesses in Australia, 2005 (cat. no. 8161.0). The size classification recommended in that information paper only used number of payees. Despite this, additional criteria have been added for the purpose of the exporter data to cover businesses with large value domestic and/or export sales but relatively few employees. The non-standard definition has been retained to maintain consistency with previous articles and because it caters for exporters that do not have an ABN or have more complex structures, e.g. the ABN reported on the export documentation may not be same as the ABN used for employment purposes.


The criteria are:

  • small businesses - having fewer than 20 payees and estimated annual GST turnover range less than $1m and exports of less than $1m during the reference period
  • large businesses - having 200 or more payees or estimated annual GST turnover range of $20m or more or exports of $20m or more during the reference period
  • medium businesses - all businesses other than those defined as small or large.

This definition is consistent with the size variables applied to exporters in all previous exporter articles.


Characteristics obtained from export documentation

For goods exporters, the following information, in addition to the value of exports, can be obtained or derived from export documentation:

  • state of origin of commodity
  • industry of origin of commodity.

This information is available for transactions with or without an ABN.


The state of origin of commodity recorded on export documentation can be used to identify the state from which the exported goods were sourced. State of origin is the state in which the final stage of production or manufacture occurs. Determining a single state of origin is difficult when there may be several stages in the manufacturing process, each of which may take place in a different state. For example, fruit may be grown in one state, canned in another, and exported from another.


The industry of origin of commodity is derived by linking each statistical code in the Australian Harmonised Export Commodity Classification (AHECC) to an ANZSIC industry based on the primary activities of the industries with which they are most commonly associated. These are the industries most likely to have produced the exported goods. Industry of origin of commodity is a different concept from the industry of businesses recorded on the ABR. While each AHECC statistical code is allocated to one primary industry of origin, commodities can be produced and/or exported by businesses classified to a number of industries.



6. ABBREVIATIONS

ABN Australian Business Number

ABR Australian Business Register

AHECC Australian Harmonised Export Commodity Classification

ANZSIC Australian and New Zealand Standard Industrial Classification

CCID Customs Client Identifier

GST Goods and Services Tax

ICS Customs Integrated Cargo System


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