1301.0 - Year Book Australia, 2002

Contents >> Service Industries >> Overview

The service industries sector is the largest component of the Australian economy in terms of number of businesses, employment and gross value added.

Of the estimated 1,239,400 private sector businesses in Australia in 1999-2000, some 812,200 or about two-thirds were in the service industries. For small businesses (those with less than 20 employees), the proportions are similar, service industries accounting for 66% of just over 1.2 million small businesses in Australia (table 21.1).

21.1 NUMBER OF BUSINESSES - 1999-2000

Industry	Units	Small businesses	Other businesses	Total

Goods producing industries	’000	401.4	25.8	427.2
Service industries	’000	780.5	31.7	812.2
Total all industries	’000	1,181.9	57.5	1,239.4
Businesses in service industries as a percentage of all businesses	%	66.0	58.6	65.5

Source: Small Business in Australia Update, 1999-00 (1321.0.55.001); ABS data available on request.

Although the service industry sector accounted for two-thirds of the gross value for all industries, the goods producing industries sector showed the greatest increase in output in chain volume terms (measuring 'real' output unaffected by price change), with an increase of 21% compared to 16% in the service industries sector over the period from 1994-95 to 1999-2000 (table 21.2). This resulted in a decrease in the service industries' share of total output, from 67.2% in 1994-95 to 62.8% in 1999-2000.

21.2 GROSS VALUE ADDED(a), Chain Volume Measures(b) by Industry

	1994-95	1999-00	Increase
	$m	$m	%

Goods producing industries -
- Agriculture	12,582	19,005	51.1
- Mining	21,442	26,183	22.1
- Manufacturing	66,644	75,560	13.4
- Electricity, gas and water	10,399	11,314	8.8
- Construction	26,077	34,434	32.1
- Total	137,144	166,496	21.4
Service industries -
- Wholesale trade	26,229	33,942	29.4
- Retail trade	26,565	32,737	23.2
- Accommodation, cafes and restaurants	10,348	12,692	22.7
- Transport and storage	28,382	34,510	21.6
- Communication services	11,560	19,549	69.1
- Finance and insurance	27,637	41,451	50.0
- Property and business services	51,819	72,938	40.8
- Government administration and defence	23,130	22,702	-1.9
- Education	24,671	26,294	6.6
- Health and community services	30,508	32,771	7.4
- Cultural and recreational services	9,024	10,097	11.9
- Personal and other services	11,288	13,225	17.2
- Total	281,161	*352,908	15.9
Total all industries(c)	418,305	519,404	24.2

	%	%
Service industries as a percentage of all industries	67.2	62.8	. .

(a) At basic prices, which include subsidies, but are before any taxes on products. (b) Reference year for chain volume measures is 1998-99. (c) Excludes ownership of dwellings.
* Revised 21 March 2002 Source: Australian System of National Accounts, 1999-00 (5204.0).

The largest contributor to the service industry sector in 1999-2000 was the property and business services industry, which accounted for 22% of the gross value added of the service industries sector and 14% of the gross value added of all industries. The next largest within the service industries sector was finance and insurance services, which accounted for 13% of the gross value added of the sector.

In the five year period 1994-95 to 1999-2000, goods producing industries' gross value added increased, on average, by 17% per year in real terms. In contrast, the gross value added of the services industries increased by an annual rate of 6%.

Strong growth was recorded in both the goods producing and service industries sectors, with the communication services industry recording the largest percentage increase in output in the five year period, an increase of 69% in real terms, the equivalent of an annual growth rate of 11%. The next highest growth rate was recorded in the goods producing industries by the agriculture industry, with a 51% increase in output over the five year period, an annual growth rate of nearly 9%. The lowest growth in real terms in the period 1994-95 to 1999-2000 was in the service industries sector, where government administration and defence recorded a 1.9% decrease, and education and health, and community services, both recorded a 7% increase.

As table 21.3 shows, in terms of employment the service industries sector is dominant, accounting for 73% of total employment for all industries in 1999-2000. Total employment in the service industries sector in 1999-2000 was 6,497,800 persons.

21.3 EMPLOYED PERSONS, By Industry

	1994-95(a)	1999-2000(a)	Increase
	’000 persons	’000 persons	%

Goods producing industries -
- Agriculture	403.3	437.5	8.5
- Mining	86.1	78.2	-9.2
- Manufacturing	1,115.3	1,113.1	-0.2
- Electricity, gas and water	86.8	64.5	-25.6
- Construction	589.8	695.4	17.9
- Total	2,281.3	2,388.7	4.7
Service industries -
- Wholesale trade	493.6	494.9	0.3
- Retail trade	1,187.0	1,324.6	11.6
- Accommodation, cafes and restaurants	377.2	432.8	14.7
- Transport and storage	381.4	407.3	6.8
- Communication services	148.4	169.3	14.1
- Finance and insurance	312.9	327.5	4.7
- Property and business services	749.8	988.7	31.9
- Government administration and defence	357.3	345.8	-3.2
- Education	555.6	609.3	9.7
- Health and community services	720.2	828.1	15.0
- Cultural and recreational services	189.2	217.1	14.7
- Personal and other services	303.7	352.3	16.0
- Total	5,776.2	6,497.8	12.5

Total all industries	8,057.4	8,886.5	10.3

	%	%
Service industries as a percentage of all industries	71.7	73.1	. .

(a) Annual average.
Source: Labour Force, Australia (6203.0).

In the five year period from 1994-95, employment in the service industries increased by 721,600 persons or 13%, representing an annual growth rate of 2%. In the same period the goods producing industries recorded an increase in employment of 107,400 persons. This represented an increase of 5%, an average annual growth rate of just under 0.9%.

Within the service industries, the major employing industry was retail trade with employment in 1999-2000 of 1,324,600 persons, accounting for 15% of all employment and 20% of employment in the service industries sector. Other large employing service industries were property and business services (988,700 persons), health and community services (828,100 persons), and education (609,300 persons). The industries showing the greatest employment growth in the five year period since 1994-95 were property and business services, with a 32% increase from 749,800 persons to 988,700 persons, personal and other services with an increase of 16% in the period, and health and community services with an increase of 15%. In contrast, employment in the government administration and defence sector fell by 3% over this period.