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Tracking the numbers – How fast is our export community growing?

26 October, 2005

Australia is on a mission - a mission to double the number of exporters. So how are we tracking?

Tim Harcourt
Chief Economist - Australian Trade Commission

In 2000-01, the base year of the target, the Australian Bureau of Statistics (ABS) provded an estimate of approximately 25,000 exporters. Therefore, to double the number of exporters, a target of 50,000 should be reached by 2006-07.

According to the new figures from the ABS, the number of exporters grew in 2001-02 to 31,450. That is, there has been an increase of around 6450 exporters over the year.

So on the basis of these experimental numbers, though its early days, Australia is well on its way has to the magical 50,000.

However is should be emphasised that the numbers are experimental and concentrate on exporters who sell good and services to customers off shore. They do not include Australian based firms that sell goods and services to foreigners within Australia. The ABS definitions and exclusions are explained in more detail below.

So how did the ABS devise the new measurement? The ABS used the new changes to the tax system to compile the data by combining ABN entries with data sourced from Customs, the Tax office and the Australian Business Register. The ABS also used the survey of International Trade in Services.

So who were Australia’s exporters in 2001-02? The ABS estimates that there were 30,240 goods exporters and 2250 service exporters (to avoid double counting you exclude the 1040 businesses that export both goods and services to get a total of 31,450). However, it is important to remember five key points about measurement.

Firstly, the ABS has excluded businesses that had exports of less than $10,000 for the reference period – to exclude all minor transactions (otherwise everything from BHP Billiton’s exports to your brother-in-laws duty free would be included).

Secondly, businesses, which provide services from their Australian base to services customers off shore, are included in the count. That is, significant ‘outbound’ service businesses are included (although the ABS advises that itsmeasurement does not pick up small or occasional service exporters who may be large in number but minimal in terms of their impact on services export revenue).

Thirdly, ‘in-bound’ service businesses, or companies who provided services foreigners in Australia are not included in the above count of exporters. This count by the ABS excludes a large number of businesses that sell services to international tourists and students while they are in Australia such as hotels, retailers, educational institutions,hairdressers, theatres, tourist attractions and taxis. The ABS estimates there could be several hundred thousand businesses fitting this category, and acknowledges that they do make a major contribution to the Australian economy.

Fourthly, Australian-owned businesses that are located offshore and supplying goods and services to the country in which they are operating are excluded from the estimates – as their trade does not directly contribute to Australian exports.

Finally, when looking at the industry of an exporter, it is important to remember that the owner of a good when it is exported may not be the producer of that good (or even be in the same industry). For instance, goods that are produced by Australia’s farmers are usually exported by businesses in the wholesale industry, such as marketing boards, and will be counted as part of the wholesale industry rather than agriculture. So, many businesses that are supplying goods and services to other businesses that undertake the export function are actually excluded from this count.

So what did the ABS find?

The ABS looked at both exporters of goods and exporters of services. The 30,240 businesses that exported goods produced over $121 billion in export revenue during 2001-02. The 2250 businesses that exported services (excluding those businesses which provided services to tourists and students in Australia) contributed service export revenue of $16.4 billion.

The ABS also provided a breakdown of goods exporters in terms of size, industry and state.

In terms of size, Australia’s goods exports were dominated by a relatively small number of exporters. There were 209 businesses, all with goods exports of $100 million or more in 2001-02, which accounted for the lion’s share of export revenue in Australia (around $84 billion or 69% of total goods export revenue over the period). By contrast, there were around 16,600 businesses (or 55% of all goods exporters) with exports valued between $10,000 and $100,000. This group provided a mere 0.5% of total goods export revenue. This finding is consistent with Austrade research, which showed large businesses being major contributors to revenue but with SMEs being the main growth sector of the exporter community.

Industry is broken down in terms of both exporter numbers and export revenue. In terms of industry by exporter numbers, there were 7556 manufacturing exporters, 7969 wholesale trade exporters, 2178 retail exporters and 1956 exporters in property and business services.

In terms of industry by export revenue, the most significant exporting industries (in terms of businesses which owned goods at the time of export) were manufacturing (38%), mining (31%), and wholesale trade (21%). These industries accounted for around $108 billion of the $121 billion worth of goods exported from Australia during this period.

What about the contribution of Australia’s agricultural exporters? The ABS shows that the producers of the exports are not often the owners of the exports when they go through customs. This can have a large effect on the results. In terms of commodity industry of origin, the ABS shows that whilst 87% of the mining industry’s exports were exported by that industry, only 13% of the agriculture, forestry and fishing industries’ exports were exported by those industries (78% was exported by wholesalers).

And no ABS publication would be complete without a state-by-state breakdown. WA took the honours by contributing 26% of Australia’s goods export revenue followed by Queensland on 19%, and NSW and Victoria (both on 18% with a concentration in manufacturing).

So what happens next? The ABS will monitor the customs entries and provide an estimate annually. Austrade will also work further with the ABS on how to measure the exporters excluded in the count (such as those in inbound services and tourism). This will enable policy makers and Austrade to have a regular count of the number of exporters to see how close we are getting to our goal of doubling the number of exporters by 2006/07.

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