Low entry rates see business numbers topple


Decrease in new registrations sees number of actively trading businesses in Australia fall by 1 percent in 2008/09

Low entry rates see business numbers topple
Low entry rate see business numbers topple
October 21, 2010

A decrease in new registrations has seen the number of actively trading businesses in Australia fall by 1 percent in 2008/09, according to figures released today by the ABS.

While new business entry rates declined, the business exit rate remained steady during the same period, at 15.4 percent for both the 2007/08 and 2008/09 financial years.

In June 2009, Australia had more than 2 million businesses.

The greatest number of Australian businesses were in the construction industry (17 percent), followed by professional, scientific and technical services (11 percent).

Rental, hiring and real estate services accounted for 10 percent of all Australian businesses.

Small business made up the vast majority of operations; almost two million businesses employed less than 20 staff while almost two million businesses had an annual turnover of less than $2 million.

Of those businesses that survived from June 2008 to June 2009, most businesses retained relatively steady staffing levels.

Similarly, annual turnover remained relatively steady for most businesses. Of the few that fluctuated, similar numbers grew to those that shrank.

STATE PERFORMANCE

As revealed in Counts of Australian Businesses, including Entries and Exits, all States recorded a decline in the number of businesses in the year to June 2009.

The Australian Capital Territory (-2.3 percent) Tasmania (-1.7 percent) and New South Wales (-1.4 percent) recorded the lowest net growth.

Of the larger States, New South Wales continued to record the lowest net growth (-1.2 percent in 2007-08 and -1.4 percent in 2008-09) and Western Australia recorded the highest net growth (1.3 oercent in 2007-08 and -0.6 percent in 2008-09).

The Northern Territory (16.4 percent), Queensland (15.5 percent) and Western Australia (15.2 percent) continued to experience the highest entry rates, with the lowest entry rate being Tasmania (11.5 percent).

Meanwhile, exit rates were highest for the Northern Territory (17 percent), the Australian Capital Territory (16.8 percent) and Queensland (16.3 percent).

INDUSTRY

At June 2009, the distribution of the Australian business population by industry was similar to the distribution recorded in June 2008.

According to the ABS, construction had the greatest number of businesses with 342,436 (16.7 percent of the total).

This was followed by professional, scientific and technical services and rental, hiring and real estate services with 232,559 and 216,853 respectively (or 11.3 percent and 10.6 percent), and agriculture, forestry and fishing with 203,643 (9.9 percent).

During 2008-09, public administration and safety had the highest entry rate (19.4 percent), followed by administrative and support services (18.9 percent), accommodation and food services (16.8 percent) and Information media and telecommunications (also at 16.8 percent).

The survival rates at June 2009 for businesses operating in June 2007 were highest for health care and social assistance (81.2 percent) and agriculture, forestry and fishing (80.9 percent), followed by rental, hiring and real estate services (78.9 percent).

Survival rates over the same period were lowest for businesses operating in public administration and safety (65.3 percent), followed by administrative and support services (67.4 percent) and accommodation and food services (67.9 percent).

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