8669.0 - Computing Services Industry, Australia, 1998-99  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/08/2000   
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SUMMARY OF FINDINGS

INTRODUCTION

This publication presents results, in respect of the 1998–99 financial year, from an Australian Bureau of Statistics (ABS) survey of businesses in the computer services industry. Businesses involved in the computer services industry are classified to Group 783 (Computer Services) of the Australian and New Zealand Standard Industrial Classification (ANZSIC). This Group comprises four classes: 7831 Data Processing Services, which includes businesses mainly engaged in providing data processing services; 7832 Information Storage and Retrieval Services, which includes businesses mainly providing storage of data other than library and bibliographic services; 7833 Computer Maintenance Services, which includes businesses mainly providing computer maintenance and repair services; and 7834 Computer Consultancy Services, which includes businesses mainly providing consultancy, analysis and programming services.

The computer services industry is one of a number of information technology related industries. For more information on these broader information technology industries see Information Technology, Australia, 1998–99 (Cat. no. 8126.0)


SIZE OF INDUSTRY

At the end of June 1999, there were 14,731 businesses in the computer services industry. This represented a 52% increase since June 1996 and an annualised growth rate of 15% over the three years.


SOURCES OF INCOME

These businesses generated $10,474 million in income during 1998–99, which was a 30% increase since 1995–96.


EXPENDITURE

The total expenditure of businesses in the computer services industry during 1998–99 was $9,654 million. Labour costs was the highest single expense ($4,065 million) representing 42% of total expenses. In addition to labour costs, $1,396 million (15% of total expenses) was paid to contractors and consultants for computing and communications services.


EMPLOYMENT

At the end of June 1999, there were 74,395 persons working for businesses in the computer services industry, which was a 35% increase since June 1996.


PROFITABILITY

In 1998–99, the operating profit before tax for the industry was $836 million, which represented an operating profit margin of 8.2%. This operating profit margin was significantly higher than the 5.7% recorded in 1995–96, but still lower than the 9.5% recorded in 1992–93.

1 KEY FIGURES
1992-93
1995-96
1998-99
Percentage growth from 1995-96 to 1998-99
Annualised percentage growth from 1995-96 to 1998-99
Businesses at end June
no.
4,894
9,679
14,731
52.2
15.0
Employment at end June
no.
30,056
55,046
74,395
35.2
10.6
Income
Income from the provision of computer services and the sale and licensing of packaged software
$m
3,251.2
6,504.7
9,409.2
44.7
13.1
Income from the provision of telecommunications services
$m
95.5
147.9
312.3
111.2
28.3
Income from the sale of computer and communication hardware, parts and consumables
$m
488.8
1,047.8
525.1
-49.9
-20.6
Other income
$m
264.7
387.9
227.4
-41.4
-16.3
Total
$m
4,100.2
8,088.3
10,474.0
29.5
9.0
Expenses
Labour costs
$m
1,293.6
2,726.8
4,065.0
49.1
14.2
Payments to contractors and consultants for computing and communications services
$m
294.6
892.0
1,396.4
56.5
16.1
Other expenses
$m
2,160.9
4,022.7
4,193.0
4.2
1.4
Total
$m
3,749.1
7,641.5
9,654.4
26.3
8.1
Operating profit before tax
$m
364.9
455.1
835.6
83.6
22.5
Operating profit margin
%
9.5
5.7
8.2
43.2
12.7
Copyright ã Australian Bureau of Statistics, 2000


EXPLANATORY NOTES


INTRODUCTION

1 This publication presents results, in respect of 1998–99, from an Australian Bureau of Statistics (ABS) survey of 2,244 businesses in the computer services industry.


SCOPE

2 The scope of the survey was all employing businesses recorded on the ABS Business Register and classified to Group 783, Computer Services, of the Australian and New Zealand Standard Industrial Classification (ANZSIC). This group comprises four classes: 7831 Data Processing Services, which includes businesses mainly engaged in providing data processing services; 7832 Information Storage and Retrieval Services, which includes businesses mainly providing storage of data other than library and bibliographic services; 7833 Computer Maintenance Services, which includes businesses mainly providing computer maintenance and repair services; and 7834 Computer Consultancy Services, which includes businesses mainly providing consultancy, analysis and programming services.


IMPROVEMENTS TO COVERAGE

3 Data in this publication have been adjusted to allow for lags in processing new businesses to the ABS business register, and the omission of some businesses from the business register. The majority of businesses affected and to which the adjustments apply are small in size.

4 Adjustments have been made to include new businesses in the estimates in the periods in which they commenced operations, rather than when they were processed to the business register. Adjustments of this type will continue to be applied in future periods.

5 Further adjustments have been made for businesses which had been in existence for several years, but, for various reasons, were not previously added to the ABS register. The ABS is remedying these omissions.

6 For more information on these adjustments, please refer to the ABS publication Information Paper: Improvements to ABS Economic Statistics, 1997 (Cat. no. 1357.0).


STATISTICAL UNIT

7 The unit for which statistics were reported in the survey was the management unit. The management unit is the highest-level accounting unit within a business or organisation, having regard to the required level of industry homogeneity, for which a set of accounts is maintained. In most cases it coincides with the legal entity owning the business (i.e. company, partnership, trust, etc.). However, in the case of large diversified businesses, there may be more than one management unit, with 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.


REFERENCE PERIOD

8 Data contained in the tables in this publication relate to all computer services businesses which operated in Australia at any time during the year ended June 1999. Counts of businesses include only those businesses that were operating at 30 June 1999.


RELIABILITY OF THE DATA

9 The estimates in this publication are subject to sampling and non-sampling error.

10 The estimates in this publication are based on information obtained from a sample of businesses in the surveyed population. Consequently, the estimates in this publication are subject to sampling variability, that is, they may differ from the figures that would have been obtained if all units had been included in the survey. One measure of the likely difference is given by the standard error (SE), which indicates the extent to which an estimate might have varied by chance because only a sample of units was included.

11 There are about two chances in three that a sample estimate will differ by less than one SE from the figure that would have been obtained if a census had been conducted, and approximately 19 chances in 20 that the difference will be less than two SEs.

12 Sampling variability can be measured by the relative standard error (RSE) which is obtained by expressing the SE as a percentage of the estimate to which it refers. The RSE is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to sampling, and this avoids the need to refer also to the size of the estimate.

13 The following table contains estimates of RSEs for a selection of the statistics presented in this publication.

RELATIVE STANDARD ERRORS FOR TABLE 1, Key Figures
1992-93
1995-96
1998-99
%
%
%
Businesses at end June
2
2
2
Employment at end June
2
2
2
Income
Income from the provision of computer services and the sale and licensing of packaged software
2
3
2
Income from the provision of telecommunications services
2
4
3
Income from the sale of computer and communication hardware, parts and consumables
2
9
12
Other income
3
5
4
Total
1
4
2
Expenses
Labour costs
1
3
2
Payments to contractors and consultants for computing and communications services
8
8
3
Other expenses
1
4
3
Total
1
4
2
Operating profit before tax
4
11
6
Operating profit margin
3
10
6

Copyright ã Australian Bureau of Statistics, 2000


14 As an example of the above, an estimate of total income for the computer services industry is $10,474.0 million and the RSE is 2%, giving a SE of $209.5 million. Therefore, there would be two chances in three that, if all units had been included in the survey, a figure in the range of $10,264.5 million to $10,683.5 million would have been obtained, and 19 chances in 20 (i.e. a confidence interval of 95%) that the figure would have been within the range of $10,055.0 million to $10,893.0 million.


15 Errors other than those due to sampling may occur because of deficiencies in the register of units from which the sample was selected, non-response, and imperfections in reporting by respondents. Inaccuracies of this kind are referred to as non-sampling errors and they may occur in any collection, whether it be a census or a sample. Every effort has been made to reduce non-sampling error to a minimum by careful design and testing of questionnaires, efficient operating procedures and systems, and appropriate methodology.


ACKNOWLEDGMENT

16 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.