8155.0 - Australian Industry, 2016-17 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 25/05/2018   
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ADMINISTRATIVE AND SUPPORT SERVICES, 2016-17

INTRODUCTION

As part of the Economic Activity Survey (EAS), the ABS collects detailed information for targeted industries. For 2016-17, the EAS collected additional information from Australian businesses/organisations classified to the Administrative and support services division of the Australian and New Zealand Standard Industrial Classification, 2006 edition (ANZSIC) (cat. no. 1292.0). This included the following subdivisions:
  • Subdivision 72: Administrative services
  • Subdivision 73: Building cleaning, pest control and other support services

This page complements the 'Administrative and support services' data cube available under the Downloads tab, which presents detailed industry information for key data items, and summary data by business size and at the state and territory level. All data are reported in current prices. Historical figures mentioned in the text can be found in the ‘Australian industry by subdivision’ data cube.

The following table provides key figures for the financial and economic performance of the businesses/organisations classified to the Administrative and support services division by ANZSIC Class for 2016-17.


ADMINISTRATIVE AND SUPPORT SERVICES, KEY FIGURES, 2016-17

ANZSIC Class
Employment at
end June
Wages and
salaries
Sales and
service
income
EBITDA(a)
Industry
value
added
Capital
expenditure
Wages and
salaries
per
employee

no.
$m
$m
$m
$m
$m
$'000

7211 Employment placement and recruitment services
159 003
8 715
14 167
*1 159
11 298
*465
55.2
7212 Labour supply services
339 094
16 778
24 423
^1 157
20 589
*419
49.7
7220 Travel agency and tour arrangement services
40 745
2 259
6 047
826
3 527
221
58.2
7291 Office administrative services
95 383
6 628
12 756
-357
7 468
^757
71
7292 Document preparation services
2 400
100
247
*31
152
^14
np
7293 Credit reporting and debt collection services
7 624
539
^2 023
^473
^1 122
^119
np
7294 Call centre operation
13 443
574
1 318
*146
821
*36
np
7299 Other administrative services n.e.c.
^32 639
1 496
7 585
^1 247
3 082
*222
49.1
7311 Building and other industrial cleaning services
149 793
3 757
11 328
^1 551
6 018
^263
29.5
7312 Building pest control services
9 554
413
1 250
^239
739
^111
np
7313 Gardening services
21 249
^653
^2 360
^561
^1 368
*274
48.3
7320 Packaging services
9 884
392
2 073
^199
668
*96
np

Total Administrative and support services
880 812
42 304
85 578
7 230
56 853
^2 996
50.4

^ Estimate has a relative standard error of 10% to less than 25% and should be used with caution
* Estimate has a relative standard error of 25% to 50% and should be used with caution
np not available for publication but included in totals where applicable.
(a) Earnings before interest, tax, depreciation and amortisation.
Source: Australian Industry, 2016-17 (cat. no. 8155.0)


SUMMARY OF FINDINGS
  • Overall the Administrative and support services division experienced moderate growth across key estimates in 2016-17, with an increase of 4.7% to $56.9b in industry value added (IVA) and 4.1% to $85.6b in sales and service income. Income from services made up the bulk of the industry's sales and service income in 2016-17 with 93.9% ($80.4b) being generated from this source.
  • The Administrative and support services division is dominated by the Administrative services subdivision which made up 84.5% of IVA and 80.1% of sales and service income in 2016-17.
  • At the class level the Administrative and support services division is dominated by businesses classified to Employment placement and recruitment services and Labour supply services. Higher employment levels and changing labour market dynamics have led to greater demand for their services but also increased competition in this sector.
  • The Building and other industrial cleaning services class also benefitted from the sustained growth of the Australian economy. Businesses were looking to outsource non-core activities and time-poor households were seeking support for domestic services. Thus businesses and individuals utilised services, particularly cleaning, within this industry.


Graph Image for Administrative and support services, Key data by ANZSIC subdivision, 2006-07 to 2016-17

Footnote(s): (a) Includes working proprietors and partners of unincorporated businesses.;(b) Includes income from rent, leasing and hiring and royalties.;(c) Includes capitalised wages, salary sacrificed earnings and remuneration in the form of share based payments and stock options; excludes the drawings of working proprietors.

Source(s): Australian Industry (cat. no. 8155.0)




SUBDIVISION 72 ADMINISTRATIVE SERVICES

The Labour supply services class dominates the results for the Administrative services subdivision. In 2016-17 it was the largest class across key data items, except for profitability measures (OPBT and EBITDA), with the Employment placement and recruitment class the next key contributor. The Employment services group, which comprises these two classes, is essential for filling labour gaps in the market at short notice. Continued low unemployment levels and stronger labour market conditions have led to greater demand for their services and has increased competition in this sector.

Also in scope of the Administrative services subdivision are travel agencies and businesses undertaking a range of routine office administrative functions on behalf of other businesses as well as call centre operations, credit reporting and debt collection.

Employment

There were 690,331 people employed in the Administrative services subdivision in June 2017, an increase of 3.7% compared to June 2016. Of this number, the Labour supply services class employed 339,094 (49.1%), followed by the Employment placement and recruitment services class, employing 159,003 people (23.0%). The level of Labour supply services employment reflects the use of temporary employment in the wider economy. Employment is taken at a point in time in June and can be affected by seasonal factors, whereas wages and salaries are in respect of the entire financial year.

The next three largest employing classes within this subdivision were Office administrative services (95,383 people or 13.8% of subdivision employment), Travel agency and tour arrangements services (40,745 people or 5.9%) and Other administrative services n.e.c. (32,639 people or 4.7%). Office administrative services businesses provide billing, record-keeping, payroll processing and reception services, while Other administrative services n.e.c. businesses are mainly engaged in providing event management, ticketing, booking and promotion services.

Income

Total sales and service income for the Administrative services subdivision was $68.6b in 2016-17, an increase of 4.0% from 2015-16. The Labour supply services class was the largest contributor to sales and service income, accounting for 35.6% ($24.4b) of the total for the subdivision, followed by Employment placement and recruitment services with 20.7% ($14.2b).

The next largest income earning classes in this subdivision were Office administrative services ($12.8b) followed by Other Administrative Services n.e.c. ($7.6b) and Travel Agency and Tour Arrangement Services ($6.0b). The remaining three classes together accounted for only 5.2% of sales and service income for the subdivision.

Income from services accounted for 94.6% ($64.9b) of sales and service income in 2016-17. This included income from a range of services reflecting the main activity of each of the industry classes, such as labour supply, employment placement and recruitment services in addition to travel agency and tour arrangements, office administration and other administrative services.

Expenses

Total expenses for the Administrative services subdivision were $68.2b, a rise of 4.4% from 2015-16. Selected labour costs accounted for 59.9% ($40.8b) of this amount, reflecting the dominance of the labour-intensive class Labour supply services. The second largest contributor to total expenses was other selected expenses ($20.3b or 29.8%) which included payments to consultants, contractors and subcontractors and rent, lease and hiring expenses.

Wages and salaries

Wages and salaries for the Administrative services subdivision were $37.1b in 2016-17, a rise of 3.3%. Of this amount, the Labour supply services and Employment placement and recruitment services classes together accounted for 68.7% ($25.5b), reflecting the labour-intensive nature of these industries.

In addition to having the highest employment level in Administrative services, the Labour supply services class had the largest proportion of total expenses attributable to wages and salaries of any class in the division, accounting for 70.4% ($16.8b) of total expenses for this class ($23.8b). Employees of labour hire firms are largely physically located within other businesses which incur the majority of accommodation and other expenses, leaving wages and salaries as the main expense incurred by the labour hire firms. Employment placement and recruitment services businesses also had a high proportion of wages and salaries, representing 60.1% of its total expenses.

Profit measures

Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $4.7b in 2016-17 for the Administrative services subdivision, representing a rise of 20.7% over 2015-16. Operating profit before tax (OPBT) was $4.5b in 2016-17, a decline of 2.2%. This was driven by a 37.6% decline in other income compared to 2015-16.

The three biggest class contributors to EBITDA and OPBT in 2016-17 were Other administrative services n.e.c., Employment placement and recruitment services and Labour supply services, collectively accounting for 76.1% of EBITDA and 82.3% of OPBT for the subdivision. Office administrative services reported a loss under both EBITDA (-$357m) and OPBT (-$602m).

Graph Image for Administrative services, Key data by ANZSIC class, 2016-17

Footnote(s): (a) Includes working proprietors and partners of unincorporated businesses.;(b) Includes capitalised wages, salary sacrificed earnings and other remuneration; excludes the drawings of working proprietors;(c) Includes income from rent, leasing and hiring and royalties;(d) Operating profit before tax for Call centre operation and Document preparation services are not available for publication but have been included in totals where applicable, unless otherwise stated.;(d) Includes value of capital work done for own use.;(f) Employee estimates used in this ratio exclude working proprietors and partners of unincorporated businesses. Ratios for Call centre operation, Credit reporting and debt collection services and Document preparation services are not available for publication but have been included in totals where applicable unless otherwise stated.

Source(s): Australian Industry (cat. no. 8155.0)




SUBDIVISION 73 BUILDING CLEANING, PEST CONTROL AND OTHER SUPPORT SERVICES

By almost all measures Building and other industrial cleaning services is the largest class in the Building cleaning, pest control and other support services subdivision, accounting for about two thirds of most key data items.

Employment

There were 190,481 people employed in the Building cleaning, pest control and other support services subdivision in June 2017, an increase of 2.8% compared to June 2016. The largest contributor to employment was the Building and other industrial cleaning services class with 149,793 people or 78.6% of total employment, followed by Gardening services, employing 21,249 people (11.2%).

Income

Sales and service income for the Building cleaning, pest control and other support services subdivision was $17.0b, a rise of 4.8% from 2015-16. Of this amount, the Building and other industrial cleaning services class accounted for the largest share at 66.6% ($11.3b), followed by Gardening services with 13.9% ($2.4b) and Packaging services with 12.2% ($2.1b).

Income from services made up the bulk of sales and service income at $15.5b (91.2% of total sales and service income). This included income from a range of services reflecting the main activity of each of the industry classes i.e. building, cleaning, gardening, packaging and pest control services.

Expenses

Total expenses for the Building cleaning, pest control and other support services subdivision also rose in 2016-17, increasing 5.2% to $14.9b. The Building and other industrial cleaning services class contributed two thirds of this amount ($9.9b), while Packaging services and Gardening services each accounted for about 13%. The three largest expense items for this subdivision were selected labour costs (39.2% or $5.8b), other selected expenses (36.3% or $5.4b), which included payments to contractors, and purchases of goods and materials (21.7% or $3.2b).

Wages and salaries

Wages and salaries for the Building cleaning, pest control and other support services subdivision were $5.2b in 2016-17, a rise of 2.6% over 2015-16. Consistent with employment, the Building and other industrial cleaning services class contributed 72.0% of this amount ($3.8b), while Gardening services accounted for 12.5% ($653m).

Wages and salaries accounted for 35.0% of total expenses in the Building cleaning, pest control and other support services subdivision. This was low in comparison to the Administrative services subdivision (54.4%) but still high in respect to Total selected industries (19.0%) and within expectations for a service based industry.

Profit measures

Due to the low barriers to entry in the Building cleaning, pest control and other support services subdivision as highlighted by the Fair Work Ombudsman, increasing competition is evident. These factors can result in tighter margins. This contributed to the declining OPBT (-9.3%) and EBITDA (-2.6%) in 2016-17. The top two contributing classes to both measures were Building and other industrial cleaning services (over 60% of both OPBT and EBITDA) and Gardening services (over 20%).

Graph Image for Building cleaning, pest control and other support services, Key data by ANZSIC class, 2016-17

Footnote(s): (a) Includes working proprietors and partners of unincorporated businesses; (b) Includes capitalised wages, salary sacrificed earnings and other remuneration; excludes the drawings of working proprietors; (c) Includes income from rent, leasing and hiring and royalties; (d) Includes value of capital work done for own use; (e) Employee estimates used in this ratio exclude working proprietors and partners of unincorporated businesses. Ratios for Packaging services and Building pest control services are not available for publication.

Source(s): Australian Industry (cat. no. 8155.0)




FURTHER ANALYSIS

The following sections discuss estimates that are only suitable for analysis at the division and subdivision level.

Business size

The Administrative and support services division as a whole is characterised by the contribution of large businesses (employing 200 or more people) with 42.4% (373,312) of all people working in this division in 2016-17 being employed by large businesses. This was influenced by the Administrative services subdivision where large businesses accounted for 47.0% of total employment.

Large businesses also accounted for 46.9% of wages and salaries in Administrative and support services, 37.1% of sales and service income, but only 15.1% of OPBT in 2016-17. Medium businesses (employing 20-199 people) also accounted for only 16.2% of OPBT. Micro businesses (employing 0-4 people) in this industry reported much higher profit margins (21.9%) compared to small businesses (employing 5-19 people) which reported 9.3%, medium businesses (4.2%) and large businesses (3.1%).

The Building cleaning, pest control and other support services subdivision, however, had the largest concentration of employees in micro businesses (0-4 employees) with 35.1% employed in this category in 2016-17.

Wages and salaries per employee in the Administrative services subdivision ($54,500) were much higher than in Building cleaning, pest control and other support services ($32,800), as there are lower barriers of entry in the Building cleaning, pest control and other support services subdivision and therefore more competition.

Graph Image for Administrative and support services, Key data by subdivision and business size, 2016-17

Footnote(s): (a) Includes working proprietors and partners of unincorporated businesses; (b) Includes capitalised wages, salary sacrificed earnings and other remuneration; excludes the drawings of working proprietors; (c) Includes income from rent, leasing and hiring and royalties.

Source(s): Australian Industry (cat. no. 8155.0)




Capital expenditure

The Administrative and support services division is not a capital intensive industry as it relies upon services derived from human capital to generate income. Total capital expenditure in Administrative and support services in 2016-17 was $3.0b, a rise of 0.9% from 2015-16. The largest contributor to this amount was other capital expenditure (including land and intangibles) (44.7%), mainly reflecting expenditure on computer software.

States and territories

Victoria, Queensland, South Australia and Tasmania all experienced positive growth in Administrative and support services in 2016-17 for employment, wages and salaries, and sales and service income, while the remaining states and territories declined in one or more of these three measures.

New South Wales (NSW) was the largest source of employment, wages and salaries, and sales and service income within Administrative and support services. NSW employment at end June 2017 was 306,223 people (34.8% of the Australian total), wages and salaries for 2016-17 were $15.3b (36.2%) and sales and service income was $32.0b (37.4%).

Victoria was the next largest, contributing 27.1% to the Australia total for sales and services income, followed by Queensland at 18.2% and then Western Australia at 8.6%.


QUALITY INDICATORS

An expanded sample of 1,528 businesses/organisations classified to ANZSIC Division N Administrative and support services were selected to receive an extended EAS questionnaire. Of those businesses surveyed and found to be operating during the 2016-17 financial year, 86.6% responded. Data were imputed for the remaining 13.4% of businesses, accounting for 11.1% of total income for Administrative and support services. For more information please see the Explanatory Notes and the Data Quality technical note.

The Administrative and support services component of the EAS was fully integrated, which means that other data cubes in this release which contain estimates relating to the Administrative and support services division are consistent with the 'Administrative and support services' data cube. Finer level estimates produced from collection source data can be requested, subject to confidentiality and sampling variability constraints.


ENDNOTE

Total selected industries in scope of the EAS exclude Financial and insurance services and most of the General government sector. For more information on scope and coverage see the Explanatory Notes. For more information on the data item definitions see the Glossary.