Australian Bureau of Statistics
1367.2 - State and Regional Indicators, Victoria, Mar 2008
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 15/05/2008
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FEATURE ARTICLE: WORKPLACE GROWTH IN VICTORIA 2000—2007
The scope of the population covered by the WorkCover dataset comprises all Victorian WorkCover insured workplaces that employ workers and have annual remuneration greater than $7,500 and all workplaces (regardless of remuneration) which employ trainees or apprentices. As the VWA dataset collects information on the industry (ANZSIC 93) classification, location (postcode) and annual remuneration expense of workplaces, it was considered to be a suitable data source for producing estimates of workplace and remuneration growth at both a regional and industry level.
The records exclude a number of workplaces such as Commonwealth employers and Commonwealth government trading enterprises, which are insured through Comcare. Sole traders, self employed and contractors are usually not included in the VWA records as they do not have employees. The data also excludes the 38 “self insurers” (as at 30 June 2007). Self insurers are organisations approved by the VWA to manage and be liable for their own workers' compensation claims and are therefore not included in the VWA collection. The 38 self insurers (for the 2006-07 financial year) were large corporations, representing approximately 8% of total remuneration(footnote 1) for all Victorian workplaces, making their omission alone significant.
Despite these limitations, as workers' compensation is a compulsory requirement the VWA data continues to be seen as a valuable source for measuring workplace growth. Findings from previous ABS studies verified that data items relating to workplace counts and remuneration were reliable. For these reasons, the ABS decided to continue using this data to produce experimental time series estimates of regional workplace growth.
It is important to acknowledge that there is no connection between the growth in the number of workplaces in a region and the region's economic performance. For example, an increase in the number of workplaces could be associated with a decrease in the region’s contribution to Gross State Product if the new workplaces were making a net loss. Similarly, areas such as Melbourne may contain a large number of head office corporations, while regional areas may be dominated by agricultural workplaces. Simple comparisons in the number of workplaces between such disparate regions need to take these factors into consideration.
It is also worth noting that the analysis of real total workplace remuneration(footnote 2) does not attempt to provide detailed industry or regional remuneration analysis. WorkCover total workplace remuneration growth can vary for reasons other than business closures or expansion, and can reflect businesses becoming self-insured (or being acquired by another business that self-insures) and hence excluded from the VWA data collection. The total workplace remuneration analysis included in this article aims to provide users with an additional regional economic indicator that complements the estimates of workplace growth.
Hereafter, 'real total workplace remuneration' shall be referred to simply as 'real remuneration'.
Unit record files obtained from VWA contained data for all workplaces registered with WorkCover on 30 June for the years 2000 to 2007. The records were then checked for consistency and errors. These checks included the accuracy of coding to correct Victorian postcodes, identification of blank or missing values and other anomalies in the data, which amounted to less than one percent of all records. Records that included Victorian postcodes or localities that could not be concorded to a Local Government Area (LGA) were only included in the Victorian level analysis. As a result, the number of workplaces in Balance of Victoria (BoV) and Melbourne Major Statistical Region (MSR) will not sum to the Victorian total.
The VWA collects workplace locality information by postcode only, and therefore a concordance was applied to allow geographical analysis at the MSR, Statistical Division (SD) and LGA levels. In the absence of a business concordance, a population concordance was used. This introduces the assumption that distribution of human population and workplaces within any given LGA are the same, which can lead to possible sources of error. For example, a Local Government Area (LGA) boundary may cut across two postcodes dividing household residences from a commercial business park. In this situation a population based concordance will incorrectly attribute all workplaces to the LGA that contains the household residences.
The results obtained from the WorkCover dataset, for both workplace counts and workplace total remuneration, were validated for the financial year 2003-04 through data comparisons with other data sources of similar scope and coverage. These data sources included the ABS Business Register Business Counts (cat no. 8161.0.55.001), ABS State Accounts (cat. no. 5220.0) and ABS Regional Wage and Salary Earner Statistics (cat. no. 5673.0.55.003). While differences were found between data from the various sources, they were consistent with the known scope and coverage exclusions and definitional differences that exist between the compared data sources.
The estimates made available in this article include:
The information and experimental results presented in this article largely summarise the findings from the ABS Victoria's report 'Victorian WorkCover Workplace Growth Trend Analysis 2000-06' which has been updated using 2006-07 data.
State and Major Statistical Region
The total number of WorkCover workplaces across Victoria at 30 June 2007 was 216,519, an increase of 5,017 or 2.4% from June 2000. Over the same period Victoria's total real workplace remuneration grew by 25.1% with the fastest annual growth rate of 5.7% occurring in the 2003-04 financial year. This growth can be attributed to several factors such as an increase in the overall number of individuals employed and in the number of hours worked as well as an incremental growth in real wages.
In Melbourne MSR, there were 157,468 workplaces at 30 June 2007, or 72.7% of the total number of Victorian workplaces. Workplace numbers in Melbourne MSR increased by 2,594 or 1.7% between June 2000 and June 2007. Between 1999-00 and 2006-07, real remuneration for Melbourne MSR increased by 25.0% with the strongest annual growth rate of 5.5% recorded in the 2003-04 financial year.
At 30 June 2007, Balance of Victoria (BoV) contained 58,910 workplaces or 27.2% of the state's total workplaces, increasing its share by 0.5% since 30 June 2000. Over the 7 years, BoV recorded a stronger workplace growth rate than Melbourne MSR, increasing by 4.5% or 2,523 workplaces. During the same period, real remuneration growth in BoV was higher than Melbourne MSR, increasing by 26.5%. As with Melbourne MSR, the strongest annual real remuneration growth for BoV also occurred in 2003-04 where it increased by 6.2% from the previous financial year.
The majority of the SDs outside Melbourne experienced an increase in workplaces between 30 June 2000 and 30 June 2007. Over this period, Barwon recorded the largest increase in workplaces outside Melbourne, increasing by 857 workplaces or 9.6%, followed by Loddon (with 663 workplaces or 10.9%) and Gippsland (with 480 workplaces or 7.9%). Of these three SDs, Loddon was the only SD to record positive workplace growth in each year while Barwon and Gippsland each recorded small decreases in 2000-01 of 0.1% and 0.8% respectively. Mallee and Wimmera were the only two SDs to experience a net decline in workplaces over the 7 year period, decreasing by 398 workplaces (7.7%) and 218 workplaces (7.6%) respectively.
Growth rates across Victoria by SD are summarised in the graph below.
Over the 7 years to 30 June 2007, the fastest real remuneration growth, outside Melbourne SD, was experienced in Loddon which increased by 33.7% while Wimmera (17.0%) recorded the slowest growth. Across Victoria, the fastest annual real remuneration growth across any financial year occurred in Gippsland (8.7%) during 2002-03. However in 2000-01, Gippsland recorded a decline of 3.5% in real remuneration which was the slowest annual growth rate of any SD over the 7 year period.
LOCAL GOVERNMENT AREA
Workplace growth varied considerably across LGAs over the 7 year period analysed. The following graphs present workplace growth by LGA, grouped by their respective SDs. These estimates give an indication of where high and low growth in workplaces have occurred within each SD.
WORKPLACE GROWTH BY INDUSTRY
Between 30 June 2000 and 30 June 2007, 11 of the 17 industry divisions experienced workplace growth across Victoria. Communication Services experienced the fastest overall growth rate during this period increasing by 59.3% followed by Construction (24.0%) and Accommodation, Cafes and Restaurants (11.4%). Electricity, Gas and Water recorded the largest decline in workplaces between 30 June 2000 and 30 June 2007, decreasing by 16.8%. This was followed by Agriculture, Forestry and Fishing which declined by 9.5% and Manufacturing which declined by 9.2%. Over the same period, real remuneration for the Communication Services industry, Construction industry and Accommodation, Cafes and Restaurants increased by 20.8%, 57.2% and 23.7% respectively, while Agriculture, Forestry and Fishing and Manufacturing increased by 8.9% and 0.6% respectively.
Within Melbourne MSR, the number of Communication Services industry workplaces grew by 58.8% or 164 workplaces while real remuneration for this industry increased by 10.4% over the 7 year period. Over the same period, the Construction industry recorded the largest net growth in workplaces (3,488 workplaces) within Melbourne MSR and the second fastest workplace and real remuneration growth rates of 20.3% and 55.7% respectively.
For BoV, the Communication Services industry recorded the fastest workplace growth rate of 60.7% (or 67 workplaces). The Construction industry recorded the largest increase in workplace numbers (2,071 workplaces or 35.4%) as well as one of the fastest growth rates in real remuneration (64.6%) between 1999-00 and 2006-07.
The following graph details ANZSIC 93 Division (industry) workplace growth over the 7 year period ending 30 June 2007.
Although the VWA WorkCover data was found to be comparable to ABS data sources at the state-level, it was not possible to validate the sub-state level estimates included in this article. For this reason the results published in this article have been flagged as experimental and users need to take care when using these estimates in analysing regional workplace growth.
1 For a complete list of self insurers see www.workcover.vic.gov.au. <back
2 Real total workplace remuneration was calculated by dividing the nominal total workplace remuneration by the ABS Wage Price Index (WPI): Total hourly rates of pay including bonuses, Victoria. The deflation of nominal total workplace remuneration by the WPI attempts to minimize the effect of price change over time and allows the derivation of changes in total workplace remuneration attributable to changes in the quantity of work performed. <back
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This page last updated 14 August 2008