BUSINESS PERFORMANCE


BUSINESS PERFORMANCE

Business performance assessment

All businesses were provided with a list of business performance measures and asked to indicate the extent to which they focussed on these measures when assessing overall business performance during the year ended 30 June 2007.

Business performance assessment(a)(b)(c), by extent of focus, by type of measure - 2006-07
		Extent of focus
		Not at all	A small extent	A moderate extent	A major extent
		%	%	%	%
Type of measure
	Financial (e.g. profits, sales growth, returns on investments)	13.6	16.8	31.3	38.3
	Cost (e.g. budget, cost per unit of output, inventory cost)	18.0	19.1	34.5	28.4
	Operational (e.g. asset utilisation, on-time delivery)	25.7	21.1	31.1	22.2
	Quality (e.g. customer satisfaction, defect rates)	15.0	12.0	29.1	44.1
	Innovation (e.g. process innovations, new value added products)	33.4	27.0	26.9	12.8
	Human resources (e.g. job satisfaction, skills development)	23.1	23.3	35.3	18.4
(a) Proportions are of all businesses.
(b) Businesses were asked to indicate to what extent the business focussed on the listed measures when assessing performance.
(c) The sum of component items for each measure may not equal 100% due to rounding and/or provision of multiple responses, refer to Explanatory Notes 17-19.

Surprisingly, 14% of businesses reported not focussing on Financial measures at all, and 18% of businesses reported not focusing on Cost measures at all when assessing business performance. For businesses with 0-4 persons employed, the proportions for these two measures were 18% and 23% respectively.

The most commonly reported measure focussed on to a major extent was Quality (44%). Over 60% of businesses with 200 or more persons employed reported focussing on Quality measures to a major extent when assessing the performance of the business.

The Health Care and Social Assistance industry reported the highest proportion of businesses which focussed on Quality measures to a major extent (49%).

Just over 40% of businesses with 0-4 persons employed reported not focussing on Innovation measures to any extent.

More than half of the businesses within the Transport, Postal and Warehousing industry reported not focussing on Innovation measures at all, followed by Health Care and Social Assistance, at 42%. By contrast, 20% of businesses within the Manufacturing industry reported focussing on Innovation measures to a major extent when assessing their businesses performance.


Changes in business performance and activities

Businesses were provided with a list of measures and performance indicators and were asked to self-assess whether any of these had decreased, stayed the same, or increased compared to the previous year. An additional option of not applicable was also provided.

Changes in business performance and activities, compared to previous year(a)(b)(c) - 2006-07
		Decreased	Stayed the same	Increased	Not applicable
		%	%	%	%
Performance measures and activities
	Income from sales of goods or services	23.2	21.6	44.5	10.8
	Profitability	25.3	30.2	33.1	11.4
	Productivity	10.5	40.7	30.9	17.9
	Range of products or services offered	4.7	52.0	25.9	17.5
	Export markets targeted	1.9	8.1	3.2	86.8
	Contracting out work/activities or outsourcing	4.0	19.0	9.9	67.1
	Amount of structured/formal training for employees(d)	3.1	40.0	14.5	42.5
	Expenditure on Information Technology (IT)	4.9	34.2	22.8	38.2
(a) Proportions are of all businesses.
(b) Businesses were asked to indicate if there had been a change in any of the items listed compared to the previous year. No attempt was made to cross check this self-assessment with other information.
(c) The sum of component items for each type of performance measure or activity may not equal 100.0% due to rounding and/or provision of multiple responses, refer to Explanatory Notes 17-19.
(d) Includes attendance at external training, workshops and seminars.

Around a quarter of businesses reported a decrease in Profitability over all employment size ranges. Businesses with 200 or more persons employed reported a much larger increase in their Profitability (64%) than businesses with 0-4 persons employed (28%).

Over half of all businesses (52%), reported their Range of products or services offered remained the same since last year.

Overall, 44% of businesses reported an increase in Income from the sale of goods and services since last year, ranging from 37% for businesses with 0-4 persons employed to 78% with 200 or more persons employed. In comparison, 23% of businesses reported Income from the sale of goods and services decreased since last year. This proportion decreased with each successive employment size range, from 25% for businesses with 0-4 persons to 14% for businesses with 200 or more persons employed.

Half of innovation-active businesses employing 0-4 persons increased their Income from sales goods or services since last year, compared to 31% of non innovation-active businesses with 0-4 persons employed. Similarly, Productivity increased for 46% of innovation-active businesses with 0-4 persons employed, compared to 18% of non innovation-active businesses employing 0-4 persons.

At the industry level, businesses within Wholesale Trade were the most likely to report an increase in
Income from the sales of goods and services (54%), Profitability (44%) and Range of products (42%). By contrast, businesses within the Construction industry were the most likely to report a decrease in their
Income from the sales of goods and services (30%), Profitability (34%) and Productivity (17%).