Following a one-year hiatus (and several delays) while they refined the counting methodology, the ABS has (finally) released updated Business Counts. The counts apply to the 2009 financial year (i.e.: they aim to represent the numbers of businesses operating at 30 June 2009), and they have incorporated several changes and improvements in the counting and reporting methods.

The major change is the adoption of the 2006 version of the Australia and New Zealand Standard Industrial Classifications (ANZSIC). Some of the categories in this version are identical to the previous version (from 1993), others are very similar, while some are entirely new including three additional categories.

A related change has allowed for previously uncounted businesses to be included in the data. In older publications of this data, if a business did not fit into one of the 17 ANZSIC (1993) categories, or had not yet been classified, that business was entirely excluded from the counts. The latest release has addressed this issue by providing a ‘Not Stated/Unknown’ category, and these counts are included in the totals. Although this category is relatively small, its inclusion improves the accuracy of the headline total counts.

While this is obviously good news on the data quality front, it has the unfortunate consequence that any comparison between the new data and older counts must be taken with at least a grain of salt.

The following excerpts from the documentation accompanying the data’s release provide some overview information about the changes in the commercial landscape in Australia since the previous data releases.

“There were 2,051,085 actively trading businesses in Australia as at June 2009. The growth rate in the number of businesses declined slightly from 2007-08 (-0.1%) to 2008-09 (-1.0%).

In comparison, GDP (in chain volume terms) over the corresponding periods grew by 3.7% and 1.2% respectively, while Australia's population grew by 1.7% and 2.1% over the same periods.”

(SOURCE: 8165.0 Counts of Australian Businesses, including Entries and Exits, June 2007 to June 2009, Page 5)

According to the ABS report, the negative growth rate in businesses despite positive economic growth was driven largely by a slowdown in the rate of new business entries into the market slowed. Consistent with the general perception of a two- or three-speed economy, the net rate of business growth (or decline) varied between States:

“In the year to June 2009, all States recorded a decline in the number of businesses, with the Australian Capital Territory (-2.3%) Tasmania (-1.7%) and New South Wales (-1.4%) recording the lowest net growth. Of the larger States (New South Wales, Victoria, Queensland, South Australia and Western Australia), New South Wales continued to record the lowest net growth (-1.2% in 2007-08 and -1.4% in 2008-09) and Western Australia recorded the highest net growth (1.3% in 2007-08 and -0.6% in 2008-09).”

(SOURCE: 8165.0 Counts of Australian Businesses, including Entries and Exits, June 2007 to June 2009, Page 6)