8155.0 - Australian Industry, 2015-16 Quality Declaration 
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PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES, 2015-16


INTRODUCTION

As part of the Economic Activity Survey (EAS), the ABS collects detailed information from a rotating program of industries. For 2015-16, the EAS collected additional information from Australian businesses/organisations classified to the Professional, scientific and technical services (PST) division of the Australian and New Zealand Standard Industrial Classification, 2006 edition (ANZSIC) (cat. no. 1292.0).

A data cube 'Professional, scientific and technical services, 2015-16' is available under the Downloads tab and presents detailed industry information for key data items, and summary data by business size and at the state and territory level.


KEY FIGURES, PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES, 2015-16

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

6910 Scientific research services
24 141
1 941
^3 393
-925
2 388
^155
82.8
6921 Architectural services
40 153
2 347
5 853
^1 142
3 942
*299
67.0
6922 Surveying and mapping services
15 853
1 053
3 028
^615
1 872
*262
73.3
6923 Engineering design and engineering consulting services
132 498
12 422
40 476
*3 141
17 889
^1 383
99.4
6924 Other specialised design services
30 479
1 191
4 984
^976
2 384
^173
51.7
6925 Scientific testing and analysis services
18 539
1 272
3 099
*468
1 949
*197
np
6931 Legal services
104 429
5 814
18 991
6 364
13 506
^462
65.8
6932 Accounting services
132 381
7 390
18 798
4 905
13 738
^913
65.1
6940 Advertising services
43 452
3 269
12 196
^1 755
5 602
1 419
81.5
6950 Market research and statistical services
^13 621
806
^2 811
^383
1 329
^191
64.0
6961 Corporate head office management services
22 247
3 720
5 492
np
**877
1 169
np
6962 Management advice and related consulting services
156 358
8 977
27 093
^4 166
14 642
^1 240
65.7
6970 Veterinary services
^23 277
1 037
3 126
^686
1 911
**278
47.5
6991 Professional photographic services
8 855
^184
844
*146
^373
*74
41.7
6999 Other professional, scientific and technical services n.e.c.
9 470
369
^1 299
np
^781
^62
44.7
7000 Computer system design and related services
196 899
17 664
45 921
^4 568
25 189
1 613
95.7
Total professional, scientific and technical services
972 650
69 455
197 404
24 703
108 371
9 889
79.7

^ 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.
** Estimate has a relative standard error greater than 50% and is considered too unreliable for general use.
np not available for publication but included in totals where applicable
(a) Earnings before interest, tax, depreciation and amortisation.
Source: Australian Industry, 2015-16 (cat. no. 8155.0)

SUMMARY OF FINDINGS

The PST industry is a significant contributor to the Australian economy, with employment levels reaching 972,650 people as at end June 2016, making it the fourth largest industry by employment. Furthermore, the industry value added (IVA) has grown to $108.4b in 2015-16, an increase of 51.2% since 2006-07, contributing 10.0% to the IVA of Total selected industries in scope of the EAS (see Endnote). On most measures, the Computer system design and related services industry is the largest ANZSIC class within the PST industry. Other significant classes within the PST industry include Engineering design and engineering consulting services, Management advice and related consulting services, as well as Accounting services and Legal services.

In 2015-16, 79.5% of PST businesses made a profit compared to 80.7% in 2014-15, and ahead of the average of 79.0% for Total selected industries. The profit margin for the PST industry in 2015-16 was 22.2%, down from 23.0% in 2014-15, however still comparatively high to the Total selected industries figure of 10.9%.

Graph Image for Key PST data by ANZSIC class, 2015-16

Footnote(s): (a) Wages and salaries per employee for Scientific testing and analysis services are not available for publication, but have been included in totals where applicable; (b) Total income, EBITDA, and wages and salaries per employee for Corporate head office management services are not available for publication, but have been included in totals where applicable; (c) Total income and EBITDA for Other professional, scientific and technical services n.e.c, are not available for publication, but have been included in totals where applicable; (d) Includes rent, leasing and hiring income; (e) Includes value of capital work done for own use; (f) Includes working proprietors and partners of unincorporated businesses; (g) Includes capitalised wages, salary sacrificed earnings and other remuneration; excludes the drawings of working proprietors; (h) Employee estimates used in this ratio exclude working proprietors and partners of unincorporated businesses.

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




SALES AND SERVICE INCOME

Sales and service income for the PST industry in 2015-16 was $197.4b, an increase of 2.9% from 12 months earlier. Of this sales and service income, 89.7% ($177.0b) was service income, with the remainder (10.3%) coming from sales of goods. Computer system design and related services businesses accounted for 23.3% of sales and service income, largely composed of IT consulting, computer support services, customised software design, and sales of goods such as computer hardware. Engineering design and engineering consulting services contributed 20.5%, followed by Management advice and related consulting services (13.7%), Legal services (9.6%), and Accounting services (9.5%). These five industry classes comprised 76.6% of total sales and service income for the PST industry. The smallest contribution was made by Professional photographic services at 0.4% ($844m) of total sales and service income.

Businesses in the Advertising services industry contributed 6.2% ($12.2b) of total sales and service income, with most income derived from media buying, planning and placement services ($4.4b) followed by advertising agency services ($4.0b). Of the $8.4b generated by these two activities, 36.1% was through digital content and platforms.

The Accounting services industry contributed 9.5% ($18.8b) of total sales and service income, with 73.9% derived from accounting services and 26.1% derived from other activities, the largest being management advice and consulting services (excluding financial and computer consulting) (15.9%). Finer level data on sources of income obtained in the survey are available on request, subject to confidentiality and sampling variability constraints.


EXPENSES

In 2015-16, total expenses for the PST industry were $184.6b, a growth of 4.2% since 2014-15. Selected labour costs were the largest source of expenditure at $76.2b (or 41.3% of total expenses), which included wages and salaries expenses of $69.5b (37.6%). This is followed by other selected expenses ($74.3b or 40.2% of total expenses), of which $20.8b were from consultant, contractor and subcontractor payments for purchased professional services.

Purchases of goods and materials only account for 13.9% ($25.6b) of total expenses in the PST industry, compared to 45.9% for Total selected industries. This is primarily driven by a few classes, including Engineering design and engineering consulting services which contributes $8.8b (34.4%) to total purchases of goods and materials, and Computer system design and related services, which contributes $6.9b (27.1%) and includes computer hardware and 'off the shelf' software that is resold.

Overall, interest expenses comprise a small proportion of total expenses in the PST industry ($4.8b or 2.6%). Corporate head office management services contributes $3.2b (or 66.3%) to the total interest expenses.

Finer level data on expenditure obtained in the survey are available on request, subject to confidentiality and sampling variability constraints.


EMPLOYMENT

At end June 2016, there were 972,650 people employed in the PST industry in Australia, an increase of 1.4% since end June 2015. Computer system design and related services employed the most people in the PST industry (196,899 people or 20.2% of total PST employment), followed by Management advice and related consulting services (156,358 people or 16.1%), and Engineering design and engineering consulting services (132,498 people or 13.6%). It should be noted that employment is taken point in time as at the last pay period in June 2016, and can be affected by seasonal factors.

Of the total PST industry employment, 871,112 were employees and 101,538 were working proprietors and partners of unincorporated businesses. Classes with higher proportions of working proprietors and partners include Professional photographic services (50.3% of total employment for this class), Other specialised design services (24.4%), Legal services (15.4%) and Accounting services (14.2%).

Graph Image for Key PST employment and wage data by ANZSIC class, 2015-16

Footnote(s): (a) Working proprietors and partners of unincorporated businesses, employees, and wages and salaries per employee for Scientific testing and analysis services are not available for publication but have been included in totals where applicable; (b) Working proprietors and partners of unincorporated businesses, employees, and wages and salaries per employee for Corporate head office management services are not available for publication but have been included in totals where applicable; (c) Includes working proprietors and partners of unincorporated businesses; (d) Includes capitalised wages, salary sacrificed earnings and other remuneration; excludes the drawings of working proprietors; (e) Employee estimates used in this ratio exclude working proprietors and partners of unincorporated businesses.

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




WAGES AND SALARIES

Wages and salaries for the PST industry were $69.5b in 2015-16, contributing 12.9% of the wages and salaries for Total selected industries. The average wages and salaries per employee in the PST industry was $79.7k, which compares with an average of $56.2k across Total selected industries. However, there is considerable variation in the wages and salaries per employee across the classes in the PST industry. The highest wages and salaries per employee were in Engineering design and engineering consulting services ($99.4k), Computer system design and related services ($95.7k), and Scientific research services ($82.8k). The lowest wages and salaries per employee are found in Professional photographic services ($41.7k) and Other PST ($44.7k), which includes businesses/organisations engaged in activities such as meteorological, translation and interpretation services. It is also important to note that these estimates are calculated based upon a point of time employee figure, compared with annual wages and salaries expenses. Therefore, average wages and salaries per employee ratios may be influenced by seasonal factors, or a higher proportion of casual or part-time employees in certain industries. The ratio excludes working proprietors and partners of unincorporated businesses.


PROFIT MEASURES

Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $24.7b for the PST industry in 2015-16, falling by 4.2% on 12 months earlier. In 2015-16, Legal services was the largest contributor to EBITDA with $6.4b, followed by Accounting services ($4.9b). Businesses in the Veterinary services field reported an EBITDA level of $686m, and a profit margin of 20.9%. Scientific research services was the only industry to record a negative value for EBITDA (-$925m) in 2015-16. For more information on these different profit measure definitions please see the Glossary.


CAPITAL EXPENDITURE

Total capital expenditure in the PST industry in 2015-16 was $9.9b, with the largest portion (34.6%) of spending directed toward plant, machinery and equipment at $3.4b, including $1.2b of capital expenditure on computers and computer peripherals. In addition, there was $2.8b capital expenditure on computer software in the PST industry, or 28.6% of the total.


BUSINESS SIZE

The PST industry is characterised by the role of working proprietors, partnerships and contracted services which is reflected by the contribution of micro business (0-4 people) and other small businesses (5-19 people). In 2015-16, micro and other small businesses contributed the majority of total employment (52.9%) in the PST industry, in contrast to 44.3% contribution across Total selected industries. In terms of wages and salaries, micro and other small businesses are under-represented accounting for only 34.9% of the $69.5b total in the PST industry. Working proprietors and partners of unincorporated businesses rely on drawings of profits as a source of income.

Graph Image for Key PST data by ANZSIC subdivision by business size, 2015-16

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

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




STATES AND TERRITORIES

New South Wales (NSW) is the largest source of employment, wages and salaries, and sales and service income within the PST industry. NSW employment at end June 2016 was 372,788 people (38.3% of the PST Australian total), wages and salaries were $27.1b (39.1%) and sales and service income was $75.1b (38.1%). Wages relative to employment are above average in Western Australia, Australian Capital Territory, NSW and Northern Territory, while they are below average in Queensland, Victoria, South Australia and Tasmania.

The PST industry comprises two subdivisions; the largest being PST (except computer system design and related services) which accounts for 79.8% of total employment (775,752 people) and 76.7% of sales and service income ($151.5b), with the second Computer system design and related services subdivision making up the difference. There is however, considerable variation of this split between the states and territories. For example in the Northern Territory, PST (except computer system design and related services) accounts for 90.3% of employment (7,526 people), and 87.5% of sales and service income ($1.1b).


QUALITY INDICATORS

An expanded sample of 2,832 businesses/organisations received an extended EAS questionnaire to produce detailed estimates on the economic contribution and financial performance of the PST industry. There was an 86.2% response rate from all businesses that were surveyed and found to be operating during the reference period. Data were imputed for the remaining 13.8% of businesses. For more information please see the Explanatory Notes.


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.