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Business Indicators, Australia methodology

Reference period
March 2020
Released
2/06/2020

Explanatory notes

Introduction

1 This publication contains estimates of sales of goods and services, wages and salaries (from the December quarter 2001 issue), company profits, and the book value of inventories for selected industries in Australia. The series have been compiled from data collected by the Australian Bureau of Statistics (ABS) in its Quarterly Business Indicators Survey. The survey, which was fully implemented in the March quarter 2001, collects data from private sector businesses.

Scope and coverage

2 The Quarterly Business Indicators Survey, like most ABS economic collections, takes its frame from Employing and Non-Employing Units on the ABS Business Register which is primarily based on ABN registrations to the Australian Business Register, which is managed by the Australian Taxation Office (ATO). The frame is updated quarterly to take account of new businesses and changes in the characteristics of businesses, such as industry and size.

3 Businesses are removed from the frame when their ABN has been cancelled by the ATO. This may occur when the business requests for its ABN to be cancelled or otherwise does not remit either Income Tax Withholding, or Goods and Services Tax, for the previous five quarters.

4 The statistics in this publication exclude micro non-employing businesses. Though there are a substantial number of these businesses, it is expected that they would not contribute significantly to the estimates, although the impact would vary from industry to industry.

5 Inventories data are not collected from businesses with fewer than 20 employees, as smaller businesses generally have difficulty in providing accurate quarterly information on the level of their inventories. Estimates for these businesses are derived by applying sales information to an estimated inventories to sales ratio.

6 Profits data are not collected from employing businesses with less than 20 employees. Estimates for these businesses are derived by applying sales information to an estimated profits to sales ratio.

7 The industries and the data items collected, classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0), included in this publication are:

IndustriesSales of goods and servicesWages and salariesProfitsInventories
Mining (Division B)
Y
Y
Y
Y
Manufacturing (Division C)
Y
Y
Y
Y
Electricity, Gas, Water and Waste Services (Division D)    
 Electricity Supply (26)
Y
Y
Y
Y
 Gas Supply (27)
Y
Y
Y
Y
 Water Supply, Sewerage and Drainage Services (28)
Y
Y
Y
N
 Waste Collection, Treatment and Disposal Services (29)
Y
Y
Y
N
Construction (Division E)
Y
Y
Y
N
Wholesale Trade (Division F)
Y
Y
Y
Y
Retail Trade (Division G)
Y
Y
Y
Y
Accommodation and Foods Services (Division H)
Y
Y
Y
Y
Transport, Postal and Warehousing (Division I)
Y
Y
Y
N
Information Media and Telecommunications (Division J)
Y
Y
Y
N
Finance and Insurance Services (Division K)    
 Depository Financial Intermediation (622)
N
Y
N
N
 Non-Depository Financing (623)
Y
Y
Y
N
 Financial Asset Investing (624)
Y
Y
Y
N
 Health and General Insurance (632)
N
Y
N
N
 Auxiliary Finance and Insurance Services (64)
Y
Y
Y
N
Rental, Hiring and Real Estate Services (Division L)
Y
Y
Y
N
Professional, Scientific and Technical Services (Division M)
Y
Y
Y
N
Administrative and Support Services (Division N)
Y
Y
Y
N
Education and Training (Division P)
N
Y
N
N
Health Care and Social Assistance (Division Q)
N
Y
N
N
Arts and Recreational Services (Division R)
Y
Y
Y
N
Other Services (Division S)
Y
Y
Y
N

Statistical unit

8 In the Quarterly Business Indicators Survey the statistical unit used to represent businesses, and for which statistics are reported, is the Australian Business Number (ABN) unit, in most cases. The ABN unit is the business unit which has registered for an ABN, and thus appears on the ATO administered Australian Business Register. This unit is suitable for ABS statistical needs when the business is simple in structure.

9 For more significant and diverse businesses where the ABN unit is not suitable for ABS statistical needs, the statistical unit used is the Type of Activity Unit (TAU). A TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment data for similar economic activities. When a minimum set of data items is available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the Australian and New Zealand Standard Industrial Classification (ANZSIC)). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry subdivision and the TAU is classified to the predominant ANZSIC subdivision. The businesses that contribute to the statistics in this publication are classified:

Classifications

10 The Australian and New Zealand Standard Industrial Classification has been developed for use in both countries for the production and analysis of industry statistics. For more information, users are referred to Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0).

11 In order to classify data by industry, each statistical unit (as defined above) is classified to the Australian and New Zealand Standard Industrial Classification industry in which it mainly operates.

Survey methodology

12 The survey is conducted by web form on a quarterly basis. It is based on a random sample of approximately 16,000 units which is stratified by industry, state/territory and number of employees.

13 Respondents are asked to provide data on the same basis as their own management accounts. Where a selected unit does not respond in a given survey period, a value is estimated. If data are subsequently provided, the estimated value is replaced with the reported data. Aggregates are calculated from all data using the ‘number raised’ estimation technique. Data are edited at both individual unit level and aggregate level.

Timing of survey cycle

14 Surveys are conducted in respect of each quarter and returns are completed during the eight or nine week period after the end of the quarter to which survey data relate e.g. December quarter survey returns are completed during January and February.

Sample revision

15 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.

16 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.

Seasonal adjustment

17 The quarterly original estimates in this publication are affected in varying degrees by seasonal influences. The seasonal adjustment process estimates and removes the effects of normal seasonal variations from the original estimates so that the effects of other influences can be more clearly recognised.

18 In the seasonal adjustment process, account has been taken of normal seasonal factors (e.g. increase in retail sales due to the Christmas period) to produce the seasonally adjusted estimates. Particular care should be taken in interpreting quarterly movements in the seasonally adjusted estimates because seasonal adjustment does not remove the effect of irregular or non-seasonal influences (e.g. change in interest rates) and reflects the sampling and other errors to which the original estimates are subject.

19 In this publication, usually seasonally adjusted estimates are produced by the concurrent seasonal adjustment method which takes account of the latest available original estimates. This method improves the estimation of seasonal factors, and therefore, the seasonally adjusted and trend estimates for the current and previous quarters. As a result of this improvement, revisions to the seasonally adjusted and trend estimates will be observed for recent periods. A more detailed seasonal review of is conducted annually. From March quarter 2020 for selected series, seasonal factors will be calculated using data up to and including December quarter 2019, then projected from March quarter 2020 onwards. This approach, known as the forward factor method, ensures that the seasonal factors are not distorted for industries affected by COVID-19 impacts. Switching to the forward factor method may result in revisions in seasonal data for future quarters when the concurrent seasonal adjustment method is reinstated.

20 The revision properties of the seasonally adjusted and trend estimates can be improved by the use of autoregressive integrated moving average (ARIMA) modelling. ARIMA modelling relies on the characteristics of the series being analysed to project future period data. The projected values are temporary, intermediate values, that are only used internally to improve the estimation of the seasonal factors. The projected data do not affect the original estimates and are discarded at the end of the seasonal adjustment process. The Quarterly Business Indicators Survey uses ARIMA modelling where appropriate for individual time series. The ARIMA model is assessed as part of the annual reanalysis and following the 2019 annual reanalysis, the majority of the Quarterly Business Indicators Survey eligible series use an ARIMA model. For more information on the details of ARIMA modelling see Feature article: Use of ARIMA modelling to reduce revisions in the October 2004 issue of Australian Economic Indicators (cat. no. 1350.0).

Trend estimates

21 The trend series attempts to measure underlying behaviour in business activity. In the short term, this measurement will be significantly affected by changes to regular patterns in spending that will occur during coronavirus (COVID-19), as certain businesses are restricted from trading for example. If the trend estimates in this publication were to be calculated without fully accounting for this irregular event, they would likely provide a misleading view of underlying business activity. It may be some time before the underlying trend in business activity can be accurately estimated. The Business Indicators trend series have therefore been suspended and will be reinstated when more certainty emerges in the underlying trend in business activity.

22 The trend estimates are derived by applying a 7-term Henderson moving average to the seasonally adjusted estimates. The 7-term Henderson moving average is symmetric, but as the end of a time series is approached, asymmetric forms of the moving average are applied. The asymmetric moving average has been tailored to suit the particular characteristics of individual series and enable trend estimates for recent quarters to be produced. Estimates of the trend will be improved at the current end of the time series as additional observations become available. This improvement is due to the combined effect of the concurrent seasonal adjustment methodology and the application of different asymmetric moving averages for the most recent three quarters. As a result of the improvement, revisions to the trend estimates will generally be observed for the most recent three quarters. ABS research shows that about 75% of the total revision to the trend estimate at the current end is due to the use of different asymmetric moving averages when the original estimate is available for the next quarter. There may also be revisions because of changes in the original estimates. As a result of these revisions, the seasonally adjusted and trend estimates will also be revised. For further information, see Information Paper: A Guide to Interpreting Time Series - Monitoring Trends (cat. no. 1349.0).

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 2017-18). The current price values may be thought of 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 the quarterly estimates for a financial year sum to the corresponding annual estimate.

24 With each release of the September 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 September quarter 2019 issue of this publication, the chain volume measures for 2018-19 will have 2017-18 (the previous financial year) as their base year rather than 2016-17, and the reference year is 2017-18. 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 year.

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 inventories and sales data, this means that the chain volume estimates for industry groups will not add to the total 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).

Comparability with national accounts and other ABS estimates

26 The data collected in the Quarterly Business Indicators Survey are used in the compilation of the quarterly estimates of the Australian National Accounts. Inventories data are used to compile estimates of the increase in book value of non-farm inventories. Estimates of sales of goods and services are used to help derive quarterly chain volume measures of gross value added for selected industries. Company gross operating profits data are used to compile estimates of gross operating surplus of private non-financial corporations. From March quarter 2002, estimates of wages and salaries are being used to compile estimates for compensation of private sector employees. For further details see Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).

27 However, the statistics in this publication will differ from corresponding statistics in the quarterly Australian National Accounts for the following reasons:

  • The national accounts estimates are benchmarked to annual supply and use tables which are based on annual Economy Wide Survey and taxation data.
  • The national accounts estimates include estimates for businesses classified to industries not in scope of the Quarterly Business Indicators Survey.
  • The national accounts estimates for gross operating surplus of private non-financial corporations are after deduction of the inventory valuation adjustment which measures the portion of income attributable to holding gains or losses resulting from inventory valuation practices.
  • In many cases, the processes used to seasonally adjust national accounts estimates are different to those used for the seasonally adjusted estimates in this publication.


28 The estimates for sales of goods and services by Retail trade in this publication will differ from turnover estimates included in Retail Trade, Australia (cat. no. 8501.0). The latter publication presents monthly estimates of the value of turnover of retail businesses, and is sourced from the Retail Business Survey. Estimates for sales of goods and services in this publication exclude the Goods and Services Tax, while turnover collected in the Retail Business Survey includes the Goods and Services Tax. In addition, the Retail Business Survey includes some businesses classified to ANZSIC divisions other than the Retail trade division, and includes retail establishments associated with management units that are not classified to the Retail trade division. The use of different samples in the Retail Business Survey and Quarterly Business Indicators Survey will also contribute to differences.

Australian International Financial Reporting Standards

29 The new Australian equivalents to International Financial Reporting Standards (AIFRS) began to be progressively implemented in Australia from 1 January 2005. As a result, a number of items in the financial accounts of Australian businesses have been affected by changed definitions which have in turn impacted upon both Income Statements and Balance Sheets. A range of ABS economic collections source data from financial accounts of businesses and use those data to derive economic statistics. There have been no changes in the associated economic definitions.

30 After monitoring data items since March quarter 2005 it has been concluded that most affected published data series have been impacted by data breaks, but that the magnitude of such breaks cannot be determined without imposing disproportionate load upon data providers to ABS surveys and other administratively collected data. ABS will continue to monitor developments and report any significant identified impacts or changes in methodology as a result of AIFRS.

General acknowledgement

31 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated; without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.

32 The results of these statistics are based, in part, on ABR data supplied by the Registrar to the ABS under A New Tax System (Australian Business Number) Act 1999 and tax data supplied by the ATO to the ABS under the Taxation Administration Act 1953. These require that such data is only used for the purpose of carrying out functions of the ABS. No individual information collected under the Census and Statistics Act 1905 is provided back to the Registrar or the ATO for administrative or regulatory purposes. Any discussion of data limitations or weaknesses is in the context of using the data for statistical purposes, and is not related to the ability of the data to support the ABR or ATO’s core operational requirements. Legislative requirements to ensure privacy and secrecy of this data have been followed. Only people authorised under the Australian Bureau of Statistics Act 1975 have been allowed to view data about any particular firm in conducting these analyses. In accordance with the Census and Statistics Act 1905, results have been confidentialised used to ensure that they are not likely to enable identification of a particular person or organisation.

Data available on request

34 If the information you require is not available as a standard product or service, then ABS Consultancy Services can help you with customised services to suit your needs. Inquiries should be made to the National Information and Referral Service on 1300 135 070. The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.

Technical note - data quality

Reliability of the estimates

1 Estimates provided in this publication are subject to non-sampling and sampling error. The most common way of quantifying sampling error is to calculate the standard error for the published estimate. This is discussed in paragraphs 6 to 9 below.

2 Estimates that have an estimated relative standard error between 10% and 25% are annotated with the symbol '^'. These estimates should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with an RSE between 25% and 50% are annotated with the symbol '*', indicating that the estimate should be used with caution as it is subject to sampling variability too high for most practical purposes. Estimates with an RSE greater than 50% are annotated with the symbol '**' indicating that the sampling variability causes the estimates to be considered too unreliable for general use. These annotations have only been applied to estimates from the March quarter 2009.

3 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, treatment of non-response, inaccurate reporting by respondents, errors in the application of survey procedures, incorrect recording of answers, and errors in data entry and processing. Inventories data for businesses with less than 20 employees are derived and could therefore be subject to error (although this error is estimated to be less than the sampling and non-sampling error resulting from directly collecting these data).

4 Estimates for the latest quarter presented in this publication are considered preliminary and revised estimates will be released with the next issue. As discussed in paragraphs 20 and 21 of the Explanatory Notes, seasonally adjusted and trend estimates are also subject to revision as more data are revised and more data becomes available.

5 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.

Standard errors

6 The estimates in this publication are based on a sample drawn from units in the surveyed population. Because the entire population is not surveyed, the published estimates are subject to sampling error. In calculating the standard error for the statistics in this publication, the ABS would prefer to produce a smoothed standard error for the major published aggregates as this approach takes account of the variability in standard error estimates for quarterly statistics. This estimated standard error would then be used as an indication of the sampling error for the current published series. Standard errors are based upon the data in the currently published quarter.

Level estimates

7 To illustrate, let us say that the published level estimate for company profits before income tax is $8,900m and the calculated standard error in this case is $200m. The standard error is then used to interpret the level estimate of $8,900m. For instance, the standard error of $200m indicates that:

  • There are approximately two chances in three that the real value falls within the range $8,700m to $9,100m ($8,900m ± $200m).
  • There are approximately nineteen chances in twenty that the real value falls within the ranges $8,500m and $9,300m ($8,900m ± $400m).
  • The true value in this case is the result we would obtain if we could enumerate the total population.


8 The following table shows the standard errors for national and state quarterly level estimates based upon the data in the current quarter.

 Company gross operating profitsCompany profits before income taxSales of goods and servicesInventoriesWages and salaries
 $m$m$m$m$m
Mining
202
367
418
474
90
Manufacturing
288
275
1 376
1 049
247
Electricity, gas, water and waste services
152
85
227
28
30
Construction
335
303
3 261
na
675
Wholesale trade
333
327
2 282
1 493
249
Retail trade
151
148
1 931
1 135
223
Accommodation and food services
112
101
755
78
198
Transport, postal and warehousing
180
135
1 103
na
187
Information media and telecommunications
59
61
347
na
105
Financial and insurance services
268
305
516
na
367
Rental, hiring and real estate services
232
257
935
na
162
Professional, scientific and technical services
531
540
1 790
na
729
Administrative and support services
346
346
855
na
455
Education and Training
na
na
na
na
203
Health Care and Social Assistance
na
na
na
na
419
Arts and recreation services
52
47
255
na
49
Other services
159
132
742
na
254
Total
987
1 063
5 324
2 229
1 370
New South Wales
na
na
3 366
na
910
Victoria
na
na
3 019
na
687
Queensland
na
na
2 011
na
636
South Australia
na
na
1 234
na
264
Western Australia
na
na
1 980
na
478
Tasmania
na
na
431
na
118
Northern Territory
na
na
254
na
62
Australian Capital Territory
na
na
551
na
222
Australia
987
1 063
5 324
2 229
1 370
na not available
 

Movement estimates

9 The following example illustrates how to use the standard error to interpret a movement estimate. Let us say that one quarter the published level estimate for inventories is $90,000m, and the next quarter the published level estimate is $92,000m. In this example the calculated standard error for the movement estimate is $850m. The standard error is then used to interpret the published movement estimate of +$2,000m. For instance, the standard error of $850m indicates that:

  • There are approximately two chances in three that the real movement over the two quarter period falls within the range $1,150m to $2,850m ($2,000m ± $850m).
  • There are approximately nineteen chances in twenty that the real movement falls within the range $300m to $3,700m ($2,000m ± $1,700m)


10 The following table shows the standard errors for national quarterly movement estimates based upon the data in the current quarter.

 Company gross operating profitsCompany profits before income taxSales of goods and servicesInventoriesWages and salaries
 
$m
$m
$m
$m
$m
Mining
189
348
221
179
44
Manufacturing
189
200
670
447
98
Electricity, gas, water and waste services
137
62
196
18
17
Construction
367
370
2 945
na
496
Wholesale trade
305
313
1 657
821
131
Retail trade
172
155
998
519
122
Accommodation and food services
103
98
534
74
99
Transport, postal and warehousing
135
120
733
na
143
Information media and telecommunications
52
53
217
na
64
Financial and insurance services
206
333
366
na
179
Rental, hiring and real estate services
195
283
618
na
120
Professional, scientific and technical services
488
462
1 088
na
303
Administrative and support services
321
276
600
na
284
Education and Training
na
na
na
na
91
Health Care and Social Assistance
na
na
na
na
244
Arts and recreation services
31
33
132
na
31
Other services
194
164
559
na
105
Total
991
1 052
4 193
1 003
734
na not available
 

Adjustments to estimates

11 Adjustments are included in the estimates to allow for lags in processing new businesses to the Australian Business Register. The following table shows the adjustments made to the current quarter's original estimates in current price terms:

 March Quarter 2020
 
%
Company gross operating profits
0.5
Company profits before income tax
0.6
Sales of goods and services
0.9
Inventories
0.5
Wages and salaries
1.2

12 As previously discussed, the estimates presented in this publication are partial indicators used in the compilation of the quarterly national accounts. The movements in the Business Indicators estimates will not always be the same as the movements in the comparable national accounts series but they should be reasonably consistent after taking account of differences in concepts, scope and methodology described in paragraph 26 of the Explanatory Notes. If after taking account of these differences, there are concerns about data quality and coherence, the national accounts area provides feedback to the survey area. This process may result in adjustments being applied to the Business Indicators estimates prior to release in this publication. The objective use of the national accounts framework to provide data coherence across all ABS economic statistics ensures that a common understanding of recent economic developments is presented.

Sales of goods and services time series

13 This publication includes estimates of sales of goods and services, by industry, and by state/territory, but estimates of national total sales of goods and services are not published. Total sales of goods and services is not an adequate indicator of the performance of the Australian economy as it includes duplication; for example, goods sold by retailers may also be included in goods sold by wholesalers in the same period. However this publication does include total sales of goods and services, by state/territory, as it is considered that there may be interest in this item as a measure of relative activity. This data should be used with caution given the potential for the data to include duplication across industries.

​​​​​​​Profits time series

14 Estimates of gross operating profits are compiled by deducting estimates of items that do not involve the production of goods and services from estimates of profits before income tax. These items include: depreciation, net interest paid, net foreign exchange gains/losses and unrealised gains/losses on the revaluation of assets. These items are considered out of scope of the national accounts item gross operating surplus.

15 As indicated in paragraph 6 of the Explanatory Notes, income items (other than sales of goods and services), expense items (other than labour costs) and profits are only collected for businesses employing 20 or more persons in the Quarterly Business Indicators Survey (QBIS).

Wages time series

16 The Introduction of the Quarterly Business Indicators Survey from March quarter 2001 included the collection of private sector wages and salaries by industry.

​​​​​​​Privatised marketing authorities

17 Three significant privatised marketing authorities came into scope of the estimates in this publication from the September quarter 1999. The introduction of these units resulted in a break in series for estimates for inventories and sales of goods and services between the June and September quarters 1999 and comparison of the series over time should be undertaken with care.

18 The methodology used by the ABS has ensured that the trend series has not been distorted by the introduction of these units, although there is a trend break evident between the June and September quarters 1999. For this reason, the trend estimates of movement have not been released for the Wholesale trade inventories, Total inventories and Wholesale trade sales series in respect of the September quarter 1999.

Privatisation of Telstra corporation

19 Telstra Corporation was effectively privatised on 20 November 2006. For the purposes of ABS statistics this change from public sector to private sector was effective from March quarter 2007. This has impacted on some data series presented in this publication, particularly the March quarter 2007 movements. The data items affected are sales of goods and services, wages and salaries, company gross operating profits and the related profits series in the Manufacturing and Information media and telecommunications industry. The introduction of Telstra has resulted in a break in series for some series in this publication between the December quarter 2006 and March quarter 2007. The movement trend estimates, in percentage terms, have therefore not been released for the March quarter 2007.

Trend break

20 In the June quarter 2010 release, trend break corrections were applied to Mining and Total company gross operating profits, company profits before income tax, business gross operating profits and Mining sales. These corrections were necessary due to very large mining commodity contract price rises that occurred on 1st April 2010. Trend break corrections were also applied to Manufacturing and Western Australian Sales of goods and services due to the movement of a major manufacturing business from the private to public sector. When a trend break occurs in a time series it is important that the trend movement estimate be treated with caution, hence the suppression of the quarterly and annual movement estimates for June 2010.

21 In the December quarter 2017 release, trend break corrections were applied to the December quarter 2016 estimates for Mining and Total company gross operating profits, company profits before income tax and business gross operating profits. These corrections were due to a large increase in the price of mining commodities.

22 In the March quarter 2020, the trend estimates were suspended due to the impacts of coronavirus (COVID-19). The trend series attempts to measure underlying behaviour in business activity. In the short term, this measurement will be significantly affected by changes to regular patterns in spending that will occur during this time, as certain businesses are restricted from trading for example. If the trend estimates in this publication were to be calculated without fully accounting for this irregular event, they would likely provide a misleading view of underlying business activity.

Glossary

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A company

The definition of company has been expanded to include quasi-corporations as well as incorporated private sector business enterprises. For the purpose of the survey, branches of overseas companies operating in Australia are included but overseas branches of Australian companies are excluded.

Business gross operating profit

The sum of unincorporated gross operating profit and company gross operating profit.

Company gross operating profits

Selected items are excluded from company profits before income tax to provide a measure of underlying company profits. These items include interest income and expenses; depreciation and amortisation; and selected items which do not involve the production of goods and services such as net foreign exchange gains/losses, gains/losses arising from the sale of non-current assets, and net unrealised gains/losses from the revaluation of current or non-current assets.

Company profits before income tax

Net operating profit or loss before income tax and extraordinary items and is net of capital profits or losses arising from the sale of businesses' own capital goods and dividends received.

Inventories

All inventories of materials etc., work in progress and finished goods owned by the business, whether held at locations of the business or elsewhere. Inventories are recorded at book value at the end of the quarter.

Quasi-corporations

Large and easily identified unincorporated enterprises such as partnerships of companies or unit trusts of companies.

Sales of goods and services

This item includes sales of goods by the business and income from services provided such as commission income, repair and service income and fees, management fees, rent leasing and hiring income, delivery and installation charges, income from consulting services, sponsorship income and membership/subscription fees. State/territory income from sales of goods and services is reported by businesses for the sales of goods and services from each state/territory in which the business operates.

Unincorporated businesses

Businesses not in the corporate sector as defined under the glossary term 'a company'.

Unincorporated gross operating profit

Same definition as company gross operating profit except it includes only unincorporated businesses.

Wages and salaries

Gross earnings before taxation and other deductions. Includes provisions for employee entitlements.

Quality declaration

Institutional environment

For information on the institutional environment of the Australian Bureau of Statistics (ABS), including the legislative obligations of the ABS, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.

Relevance

The Business Indicators publication contains estimates of sales of goods and services, wages and salaries, company profits, and the book value of inventories for private businesses in selected industries in Australia. The series have been compiled from data collected by the Australian Bureau of Statistics (ABS) in its Quarterly Business Indicators Survey.

The data collected are also used in the compilation of the quarterly estimates of the Australian National Accounts (cat. no. 5206.0) as well as in the formulation of public and private sector decision making.

The publication produces quarterly movement (percentage change from previous quarter) and level estimates for sales of goods and services, wages and salaries, company profits, and the book value of inventories. These are presented through original, seasonally adjusted and trend series, at the industry and state level. A limited number of ratios are also published at the industry level.

The scope of the survey encompasses all private employing and non-employing businesses on the ABS business register which is primarily based on ABN registrations to the Australian Business Register which is managed by the Australian Tax Office. Micro non-employing businesses are not included as it is expected that they would not contribute significantly to estimates.

The survey also excludes public sector businesses (i.e. all departments, authorities and other organisations owned and controlled by Commonwealth, State and Local Government) and the following industries which come under the scope of other ABS publications: Agriculture, Forestry and Fishing; General Government; Life Insurance; Superannuation Funds; and Private households employing staff.

The industries from which the data items are collected have been classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0).

Timeliness

The Business Indicators publication is compiled using data from three consecutive months (e.g. January, February, and March) with the release of this information generally occurring on the first Monday of the third month following the end of the reference quarter (e.g. data for the June quarter will be released on the first Monday in September).

Accuracy

The ABS is focused on, and committed to accuracy in all the data it releases. However, like most collections conducted by the ABS the Quarterly Business Indicators Survey is subject to both sampling and non-sampling errors.

The survey is based on a random sample of approximately 16,000 units which is stratified by industry, state/territory and number of employees. All large private sector businesses and other statistically significant units, such as joint venture partners, are included in the sample. However, since the entire population of in-scope private businesses in Australia (approximately 1,000,000 units) is not surveyed, the published estimates are subject to some degree of sampling error, which can be quantified by calculating the relative standard error (RSE) of the estimates.

Annotations are used to identify all published estimates that have an estimated RSE of greater than 10%, and usage recommendations for such estimates can be found in paragraph 2 of the Technical Note (Data Quality) of this publication.

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. 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.

Revisions to previous quarter's data can take place from time to time. This includes replacement of previously imputed data, which is a normal occurrence. Revisions can arise due to a change in the reference year for chain volume estimates, resulting in changes to levels but not growth rates for all periods. A change in the base year can also result in revisions, small in most cases, to growth rates for the last year.

Measures are also in place to account for the four month lag between frame creation and the end of the reference period (i.e. the time between selecting businesses to be surveyed and actually surveying them). Business provisions constitute upward adjustments to the estimates to allow for lags in processing new businesses onto the Australian Business Register and thereby onto the frame.

Coherence

Most data in the Business Indicators publication are directly comparable across different collection cycles. Changes were made to the publication in the September quarter 2009 including the replacement of the ANZSIC 1993 classification with the ANZSIC 2006, the inclusion of non-employing businesses in the scope of the survey, and the complete enumeration of Unincorporated Joint Ventures (UJV’s). The impact of both of these rounds of changes were measured by conducting parallel but overlapping surveys to link estimates from the old and new survey designs and create revised historic series by backcasting the new estimates.

The change of the Telstra Corporation from the public sector to the private sector in November 2006 impacted on the estimates from March quarter 2007. Caution should be taken when comparing data across this period. For more information please see Information Paper: Future Treatment of Telstra in ABS Statistics (cat. no. 8102.0).

The data presented in the Business Indicators publications are also broadly comparable with other statistics produced by the ABS. In particular, data collected are used in the compilation of the quarterly estimates of the Australian National Accounts (cat. no. 5206.0). For further details see Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).

However, there are some differences between the statistics in this publication and the corresponding statistics in the quarterly Australian National Accounts which are outlined in paragraph 27 of this publication’s Explanatory Notes.

The estimates for sales of goods and services by the Retail trade industry in this publication will also differ from turnover estimates presented in Retail Trade, Australia (cat. no. 8501.0) which reports monthly estimates of the value of turnover of retail businesses. The two surveys differ in their inclusion of the Goods and Services Tax as well as their classification of certain businesses and their sample. These differences are further outlined in paragraph 28 of the Explanatory Notes.

Interpretability

The major series estimates for this collection are available in original, seasonally adjusted and trend series. An explanation of seasonal and trend measures with regards to the Business Indicators publication can be found in paragraphs 17 to 22 of the Explanatory Notes.

The Explanatory Notes and the Technical Note (Data Quality) are also good sources for information about the structure, scope, methodology and different measures used in the survey. More detail on the changes that were made to the publication in 2009 can be found in Information Paper: Changes to Business Indicators Statistics (cat. no. 5676.0.55.002).

An explanation of how Business Indicators estimates contribute to the Australian National Accounts can be found in Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).

Accessibility

Business Indicators (cat. no. 5676.0) is available from the ABS website as an electronic version of the Summary data and Explanatory Notes, and as downloadable Excel data files for time series data.

If the information you require is not available as a standard product or service, then ABS Consultancy Services can help you with customised services to suit your needs. Inquiries should be made to the National Information and Referral Service on 1300 135 070. The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.

Abbreviations

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ABNAustralian Business Number
ABSAustralian Bureau of Statistics
ANZSICAustralian and New Zealand Standard Industrial Classification
CGOPcompany gross operating profits
GOSgross operating surplus
PAYGWpay-as-you-go withholding
QBISQuarterly Business Indicators Survey
SISCAStandard Institutional Sector Classification of Australia
TAUtype of activity unit