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14 This survey cycle facilitates the formation of estimates of expenditure for financial years (12 months ending 30 June). For example, as the table above shows, the first estimate for 2001-2002 was available from the December 2000 survey as a longer term expectation (E2). It was subsequently revised in the March 2001 survey (again as a longer term expectation) and in the June 2001 survey as the sum of two expectations (E1 + E2). In the September and subsequent surveys the estimate is derived as the sum of actual expenditure (for that part of the year completed) and expected expenditure (for the remainder of the year). The final (or seventh) estimate from the June quarter 2002 survey, will be derived by summing the actual expenditure for each of the four quarters.
EXPLANATION OF TIMING OF ESTIMATES
15 The graphs on page 4 and tables 4 and 5 of this publication contain 7 estimates of expenditure for each financial year.
16 The survey frames and samples are revised each quarter to ensure that they remain representative of the survey population. The timing for creating each quarter's survey frame is consistent with that of other ABS business surveys. This provides for greater consistency when comparing data across surveys.
17 Additionally, with these revisions to the sample, some of the units from the sampled sector are rotated out of the survey and are replaced by others, to spread the reporting workload equitably.
18 Adjustments are included in the estimates to allow for lags in processing new businesses to the ABS Business Register, and the omission of some businesses from the register. The majority of businesses affected and to which adjustments apply are small in size. As an indication of the size of these adjustments, in September quarter 2001 they represented about 2.6% of the total estimate of new capital expenditure.
19 The survey uses the management unit as the statistical unit. The management unit is the highest-level accounting unit within a business, having regard to industry homogeneity, for which accounts are maintained. In nearly all cases it coincides with the legal entity owning the business (i.e. company, etc.). In the case of large diversified businesses, however, there may be more than one management unit, each coinciding with a ‘division’ or ‘line of business’. A division or line of business is recognised where separate and comprehensive accounts are compiled for it.
CLASSIFICATION BY INDUSTRY
20 The Australian and New Zealand Standard Industrial Classification (ANZSIC) has been developed for use in both countries for the production and analysis of industry statistics. It replaces the Australian Standard Industrial Classification (ASIC) and the New Zealand Standard Industrial Classification (NZSIC).
21 For more information, users are referred to Australian and New Zealand Standard Industrial Classification (ANZSIC), 1993 (Cat. no. 1292.0).
22 In order to classify new capital expenditure by industry, each statistical unit (as defined above) is classified to the Australian and New Zealand Standard Industrial Classification (ANZSIC) industry in which it mainly operates.
CHAIN VOLUME MEASURES
23 The chain volume measures appearing in this publication are annually reweighted chain Laspeyres indexes referenced to current price values in the chosen reference year (currently 1999-2000). The current price values may be thought as being the product of a price and quantity. The value in chain volume terms can be derived by linking together movements in volumes, calculated using the average prices of the previous financial year and applying compound movements to the current price estimates of the reference year. Each year's quarter-to-quarter growth rates in the chain volume series are based on the prices of the previous financial year, except for those quarters of the latest incomplete year which are based upon the second most recent financial year. Quarterly chain volume estimates are benchmarked to annual chain volume estimates, so that quarterly estimates for a financial year sum to the corresponding annual estimate.
24 With each release of the June quarter issue of this publication, a new base year is introduced and the reference year is advanced one year to coincide with it. This means that with the release of the June quarter 2002 issue of this publication, the chain volume measures for 2001-2002 will have 2000-2001 (the previous financial year) as their base year rather than 1999-2000, and the reference year will be 2000-2001. A change in the reference year changes levels but not growth rates for all periods. A change in the base year can result in revisions, small in most cases, to growth rates for the last few years.
25 Chain volume measures are not generally additive. In other words, component chain volume measures do not, in general, sum to a total in the way original current price components do. For capital expenditure data, this means that the original chain volume estimates for industry groups will not add to total capital expenditure for Australia. In order to minimise the impact of this, the ABS uses the latest base year as the reference year. By adopting this approach, additivity does exist for the quarters following the reference year and non-additivity is relatively small for the quarters in the reference year and those immediately preceding it. For further information on chain volume measures refer to the Information Paper: Introduction of Chain Volume Measures in the Australian National Accounts (Cat. no. 5248.0).
DERIVATION AND USEFULNESS OF REALISATION RATIOS
26 Once actual expenditure for a financial year is known, it is useful to investigate the relationship between each of the prior 6 estimates of expenditure for that financial year and the actual expenditure (see paragraphs 13-15 above for an explanation of the derivation of the 7 estimates). The resultant realisation ratios (subsequent actual expenditure divided by expected expenditure) then indicate how much expenditure was actually incurred against the amount expected to be incurred at the various times of reporting. Realisation ratios can also be formed separately for 3 or 6 month expectations as well as the 12 month E2 estimates or combinations of estimates containing at least some expectation components (e.g. 6 months actual and 6 months expected expenditure).
27 Realisation ratios provide an important tool in understanding and interpreting expectation statistics for future periods. The application of realisation ratios enables the adjustment of expectation data for known under (or over) realisation patterns in the past and hence provides a valid basis for comparison with other expectation data and actual expenditure estimates. Once this has been done the predictions can be more validly compared with each other and with previously derived estimates of actual expenditure for earlier years. For example, if one wished to make a prediction about actual expenditure for 2001-2002 based on the June 2001 survey results and compare this with 2000-2001 expenditure, it is necessary to apply the relevant realisation factors to the expectation to put both estimates on the same basis.
28 There are many ways in which realisation ratios can be applied to make predictions of actual expenditure for a future period. A range of realisation ratios for both type of asset and industry estimates is provided in tables 4 and 5.
29 In using realisation ratios to adjust expectations data, attention should be paid to the range of values that has occurred in the past. A wide range of values is indicative of volatility in the realisation patterns and hence greater caution should be exercised regarding the predictive value of the expectation, even after adjustment by application of realisation ratios. This is particularly the case with the early 12 month expectations for the following financial year collected in the December and March surveys.
RELIABILITY OF THE ESTIMATES
30 Estimates provided in this publication are subject to non-sampling and sampling errors. Details of sampling errors are on pages 20 and 21 of this publication.
31 Non-sampling errors may arise as a result of errors in the reporting, recording or processing of the data and can occur even if there is a complete enumeration of the population. These errors can be introduced through inadequacies in the questionnaire, non-response, inaccurate reporting by respondents, errors in the application of survey procedures, incorrect recording of answers, and errors in data entry and processing.
32 It is difficult to measure the size of non-sampling errors. However, every effort is made in the design of the survey and development of survey procedures to minimise their effects.
33 The quarterly actual new capital expenditure series in this publication are affected to some extent by seasonal influences and it is useful to recognise and take account of this element of variation.
34 Seasonal adjustment is a means of removing the estimated effects of normal seasonal variations for the series so that the effects of other influences can be more clearly recognised.
35 Seasonal adjustment does not remove from the series the effect of irregular or non-seasonal influences (e.g. a change in interest rates) and reflect the sampling and other errors to which the original figures are subject. Particular care should be taken in interpreting quarterly movements in the adjusted figures in this publication, especially for detailed industry estimates. It should be noted that the seasonally adjusted figures necessarily reflect the sampling and other errors to which the original figures are subject.
36 At least once each year the seasonally adjusted series are revised to take account of the latest available data. The most recent reanalysis takes into account data collected up to and including the March quarter 2001 survey. Data for periods after March 2001 are seasonally adjusted on the basis of extrapolation of historical patterns. The nature of the seasonal adjustment process is such that the magnitude of some revisions resulting from reanalysis may be quite significant, especially for data for more recent quarters.
37 The trend estimates are derived by applying a 7-term Henderson moving average to the seasonally adjusted series. The 7-term Henderson average (like all Henderson averages) is symmetric, but as the end of a time series is approached, asymmetric forms of the average are applied. Unlike the weights of the standard 7-term Henderson moving average, the weights employed here have been tailored to suit the particular characteristics of individual series. While the asymmetric weights enable trend estimates for recent quarters to be produced, it does result in revisions to the estimates for the most recent three quarters as additional observations become available. There may also be revisions because of changes in the original data and as a result of the re-estimation of the seasonal factors.
38 For further information, see Information Paper: A Guide to Interpreting Time Series - Monitoring Trends, an Overview (Cat. no. 1348.0) or contact the Assistant Director, Time Series Analysis on Canberra 02 6242 6345.
DESCRIPTION OF TERMS
39 A description of the terms used in this publication is given below:
40 New capital expenditure refers to the acquisition of new tangible assets either on own account or under a finance lease and includes major improvements, alterations and additions. In general, this is expenditure charged to fixed tangible assets accounts excluding expenditure on second hand assets unless these are imported for the first time.
41 Some estimates are dissected by type of asset:
42 A list of all members of the target population for a survey. The frame for this survey is a list of all businesses in the ANZSIC divisions, subdivisions and groups listed in paragraph 2. This is extracted from the ABS Business Register, which is a list of all employing Australian businesses, as described in paragraph 5.
COMPARISON WITH OTHER ABS STATISTICS
43 The statistics for new capital expenditure shown in this publication differ from estimates of private gross fixed capital expenditure shown in the Australian National Accounts for the following reasons:
44 For a more detailed explanation of the concepts and methods used in compiling the National Accounts estimates see Australian National Accounts: Concepts, Sources and Methods (Cat. no. 5216.0).
45 Users may also wish to refer the following publications:
Australian Business Expectations (Cat. no. 5250.0)
Australian National Accounts: National Income, Expenditure and Product (Cat. no. 5206.0)
Australian National Accounts: Concepts, Sources and Methods (Cat no. 5216.0)
Building Activity, Australia (Cat. no. 8752.0)
Business Operations and Industry Performance, Australia (Cat. no. 8140.0)
Company Profits, Australia (Cat. no. 5651.0)
Directory of Capital Expenditure Data Sources and Related Statistics (Cat. no. 5653.0)
Engineering Construction Activity, Australia (Cat. no. 8762.0)
Information Paper: Experimental Estimates: Australian Industry, A State Perspective, Australia 1998-99 (Cat. no. 8156.0)
Information Paper: Improvements to Australian Bureau of Statistics Business Indicators (Cat. no. 5677.0)
Information Paper: Australian National Accounts, Introduction of Chain Volume and Price Indexes (Cat. no. 5248.0)
Inventories and Sales, Selected Industries, Australia (Cat. no. 5629.0)
Private New Capital Expenditure, State Estimates (Cat. no. 5646.0).
46 Current publications produced by the ABS are listed in the Catalogue of Publications and Products, Australia (Cat. no. 1101.0). The ABS also issues, on Tuesdays and Fridays, a Release Advice (Cat. no. 1105.0) which lists publications to be released in the next few days. The Catalogue and Release Advice are available from any ABS office.
ABS DATA AVAILABLE ON REQUEST
47 In addition to the data contained in this publication, more detailed industry information may be made available on request, the cost for such a service being dependent upon the amount of data requested. For example, data are generally available at the ANZSIC group (3 digit) level.
SYMBOLS AND OTHER USAGES
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