INDUSTRY ANALYSIS
An analysis of performance by industry follows.
Agriculture, forestry and fishing
In 2005-06, this industry consisted of 249,200 operating businesses. They contributed 3% to total income, total expenses and industry value added of the Total selected industries.
A $3.8b (7%) increase in total income was exceeded by a $5.1b (9%) increase in total expenses, resulting in a 33% fall in OPBT and a decline in EBITDA of 7%. IVA remained relatively unchanged.
Interest coverage declined to 2.6 times (from 3.3 in 2004-05), reflecting a 17% increase in interest expenses. This continued the decline in the ratio over the previous three years.
This industry's average values of sales and service income, total income and total expenses are all lower than for all other industries except Personal and other services. Average OPBT and average IVA in Agriculture, forestry and fishing are the lowest of all industries shown.
Agriculture, forestry and fishing is the industry least dominated by large (employing) businesses, which accounted for only 10% of wages and salaries, and 5% of total income and IVA in 2005-06. By contrast, the contributions of small (employing) businesses to these aggregates were, respectively, 59%, 51% and 55%, the highest for each variable for any of the Total selected industries.
Mining
Favourable commodity prices and strong overseas demand combined to substantially improve the performance of Mining in 2005-06. An increase of $23.6b (30%) in total income exceeded an increase of $11.3b (20%) in total expenses. This resulted in a $12.5b (59%) increase in OPBT, a $15.1b (58%) increase EBITDA, and a $19.3b (47%) increase in IVA. Net capital expenditure also increased, by 45% (or $6.5b). Mining recorded the highest percentage increases of all the Total selected industries in these aggregates, as it did for employment (up 21%) and wages and salaries (up 27%).
Depreciation and amortisation is a significant element of the cost structure of Mining, representing 13% of its total expenses in 2005-06, the second highest proportion (after Communication services) of all the Total selected industries.
Manufacturing
Manufacturing OPBT decreased by $0.3b (or 1%), resulting from a $18.9b (5%) increase in total income, a $17.9b (6%) increase in total expenses, and a decrease of $1.3b in the value of the change in inventories. EBITDA rose marginally.
GFCF and net capital expenditure in Manufacturing both rose by $3b, or 22% and 20% respectively, in 2005-06.
The Manufacturing industry accounted for 17% of total income and 18% of sales and service income of the Total selected industries in 2005-06, and was the largest contributor to these aggregates.
Average OPBT in Manufacturing fell by 3% during 2005-06.
Electricity, gas and water supply
Total income in Electricity, gas and water supply increased by $5b (10%) in 2005-06, and total expenses by $3.7b (9%). Although this produced a $1.3b (20%) increase in OPBT, it translated to a fall of $655m (5%) in EBITDA after a $2.1b (117%) increase in other income was excluded.
The Electricity, gas and water supply industry has 10% of its total expenses represented by interest expenses, which is the highest proportion of any of the Total selected industries (the proportion is 3% overall). Selected labour costs also represented 10% of total expenses for this industry, the second lowest proportion (after Wholesale trade) of any industry.
Capital work done by businesses for their own use accounted for 36% of this industry's capital expenditure, the second highest proportion of any industry. Capital expenditure increased by 20% (or $1.9b) during the year, to $11.5b. A similar movement ($1.7b, or 19%) occurred in GFCF, and the industry's investment rate (value added) rose to 55.4%, the highest rate of any industry in 2005-06.
Large (employing) businesses in Electricity, gas and water supply dominate IVA, total income, OPBT, wages and salaries and employment, contributing between 74% and 86% in 2005-06. This industry is the most heavily dominated by large (employing) businesses. In contrast, non-employing businesses contributed 2% or less in 2005-06 to all financial variables and IVA.
Construction
In 2005-06, total income and total expenses in Construction both increased by 14%. EBITDA rose by 20%, OPBT by 15% and IVA by 16%, continuing the strong growth evident since 2001-02.
Apart from Agriculture, forestry and fishing, Construction was the industry most heavily dominated by small (employing) businesses in 2005-06. They contributed 32% of the OPBT in this industry, compared to 25% at the Total selected industries level, between 41% and 46% of all other financial variables shown, 42% of IVA, and 36% of employment at the end of June.
Wholesale trade
Total income, total expenses and IVA of the Wholesale trade industry each increased by 7%. EBITDA increased by 5% and OPBT by 4%, though this growth is less strong in recent years. GFCF increased by 25%.
At 8%, the proportion of selected labour costs to total expenses in Wholesale trade in 2005-06 was the lowest of all industries shown. The proportion for the Total selected industries was 18%.
Retail trade
Total income and total expenses in the Retail trade industry both increased by 2% in 2005-06. EBITDA rose by 7%, OPBT by 9%, and IVA increased by 6%.
Capital expenditure increased by 13%, and by 22% net of disposals.
Apart from Agriculture, forestry and fishing, Retail trade is the industry with the lowest wages and salaries costs per person employed ($23,800) in 2005-06. This is consistent with the prevalence of part time and casual employment in this industry.
Accommodation, cafes and restaurants
Increases of 7% were recorded in both total income and total expenses of Accommodation, cafes and restaurants in 2005-06.
EBITDA increased by 3%, whereas OPBT decreased by 1% due to increases in interest expenses (14%) and depreciation and amortisation (8%)
IVA of Accommodation, cafes and restaurants increased by $1.2b, or 6%. The industry's investment rate (value added) decreased to its lowest level (10.2%) in the five years of this series. Profit margin decreased from 5.9% to 5.5%.
Transport and storage
EBITDA in Transport and Storage increased by 5% (to $14.6b) in 2005-06. OPBT increased by 8% and profit margin was virtually unchanged.
The Transport and storage industry increased its net capital expenditure by 17% in 2005-06.
Funding from government for operational costs represented 4% of total income for Transport and storage, reflecting payments to passenger transport operators.
Communication services
OPBT in Communication services decreased by 22% ($1.6b) in 2005-06, the result of a larger increase ($5.1b) in total expenses than the increase ($3.7b) in total income. Due to a large increase in depreciation and amortisation affecting OPBT, the decrease (8%) in EBITDA was more subdued. Wages and salaries increased by 16% ($1.2b) and IVA decreased by 1%.
After substantial increases in the previous year, capital expenditure maintained a similar level and GFCF decreased (by 3%). More than half (69%) of the value of capital expenditure in Communication services consisted of capital work done for own use, the highest proportion of any industry shown.
Communication services, together with Electricity gas and water supply, are the industries in which large (employing) businesses predominate. Large businesses in Communication services generated 76% of total income, 83% of IVA and 81% of OPBT in 2005-06, and provided 70% of employment.
Communication services is the industry for which depreciation and amortisation represents the highest proportion of total expenses, at 14% in 2005-06 (compared to 4% for the Total selected industries).
Property and business services
The Property and business services industry had the largest number of operating businesses in 2005-06: 718,400, 6% more than the previous year. The industry also accounted for 18% of Total selected industries' employment and paid 22% of wages and salaries.
Total income of Property and business services increased by 20%, or $53.1b. A 13% ($23.5b) increase in income from services, together with increases of 33% ($12.2b) in rent, leasing and hiring income and 26% ($5.5b) in sales of goods, contributed to a substantial improvement in the industry's operational performance in 2005-06. EBITDA rose by 44%, OPBT by 52% and IVA by 19%.
In 2005-06, the Property and business services industry accounted for 15% of total income, 13% of total expenses, 29% of OPBT and 21% of IVA of the Total selected industries.
Rent, leasing and hiring income earned by Property and business services was $49.0b and represented 15% of the industry's total income, the highest proportion of any industry shown. It also represented 80% of all rent, leasing and hiring income earned in 2005-06 by the Total selected industries.
Non-employing businesses accounted for 29% of the total income of Property and business services, the second highest proportion (after Agriculture, forestry and fishing) of any industry in 2005-06.
Education (private)
Total income of the (private) Education industry increased by 7% in 2005-06, and total expenses increased by 9%.
Selected labour costs represented 61% of total expenses for the (private) Education industry in 2005-06. As well, the $7.4b received as funding from government for operational costs amounted to 41% of this industry's total income. Both proportions are the highest of any industry shown. The industry's selected labour costs increased by 15%.
This industry exhibits the highest value for the ratio of wages and salaries to sales and service income of all industries presented. This is consistent with the labour intensive nature of the industry. At 0.96 in 2005-06, this value is more than double that of the next-ranking industry by this measure, Health and community services (private).
(Private) Education is the industry in which medium (employing) businesses are most dominant in terms of total income and IVA, contributing 49% and 52% respectively of the 2005-06 estimates for this industry.
Health and community services (private)
The (private) Health and community services industry recorded an increase of 6% in the number of operating businesses during 2005-06. Total income and total expenses both increased by 9%, EBITDA by 18%, OPBT by 7%, IVA by 11%, and capital expenditure by 27%.
The cost structure of the (private) Health and community services industry is distinctive in that selected labour costs and cost of sales are very similar, each constituting between 45% and 47% of total expenses for all five years presented.
Of the industries included in these statistics, (private) Health and community services is by far the largest recipient of funding from government for operational costs. In 2005-06 it received $10.5b, or 32% of all such funding paid to the Total selected industries. This represented 16% of the total income of the industry, compared to 17% in 2004-05.
Cultural and recreational services
The number of operating businesses in the Cultural and recreational services industry rose by 7% in 2005-06.
EBITDA increased by 3% and OPBT by 11%. IVA increased by 4% and capital expenditure by 14%.
The relative importance of medium (employing) businesses in Cultural and recreational services has increased in 2005-06. In previous years, small (employing) and medium (employing) businesses generally made similar contributions to the major income and expense aggregates (apart from wages and salaries). For 2005-06, however, medium (employing) businesses contributed more to sales and service income, total income and total expenses than do small (employing) businesses.
Personal and other services
The number of operating businesses in the Personal and other services industry increased by 6% in 2005-06. Increases were recorded in total income (10%), total expenses (11%), IVA (7%) and OPBT (1%).
Personal and other services is heavily dominated by small (employing) businesses, ranking third by this measure (after Agriculture, forestry and fishing and Construction) in terms of most variables presented. In 2005-06 such businesses contributed 25% of the OPBT in this industry, and between 36% and 42% to all other financial variables shown. Of this industry's OPBT in 2005-06, 47% was generated by non-employing businesses.
Print Page
Print All