Business demography statistics
Business demography statistics provide an annual snapshot (as at February) of the structure and characteristics of New Zealand businesses. The series covers economically significant individual, private sector and public sector enterprises that are engaged in the production of goods and services in New Zealand.
This is the second year of publication of an improved set of business demography statistics based on the Longitudinal Business Frame (LBF). This release includes both the structural (counts of businesses by industry, size, region, etc) and the dynamic (births, deaths, survival rates, etc) business demography statistics. The data is released on a provisional basis and includes a revised time series back to 2000. It is expected that the largest revisions will occur in the most recent reference periods. This is mainly due to the lags associated with the processing of administrative data. Analysis of the 2008 data should be carried out with caution.
This publication is the first release of business demography statistics on the basis of the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006. Previously, the 1996 version of ANZSIC was used. For more details, see the Introducing ANZSIC 2006 web page. All figures in this Hot Off The Press are based on the 2006 version of ANZSIC. The tables released with this publication include both the 1996 and 2006 versions of ANZSIC. This dual publication of the two versions of ANZSIC will be repeated for the 2009 and 2010 releases of business demography statistics, while the 2011 release will be based only on ANZSIC 2006. The ANZSIC 2006 classification has been back cast to 2000 to provide users with a consistent time series. For more details on how ANZSIC 2006 was used in the business demography series, read the technical notes of this release.
Total number of enterprises and geographic units
At February 2008, the number of enterprises on Statistics New Zealand's Longitudinal Business Frame was 471,100. The number of business locations (geographic units) corresponding to these enterprises was 507,790. These businesses engaged a total of 1.969 million employees.
When comparing February 2008 with February 2007, the number of enterprises in New Zealand increased by 1.5 percent (up 6,760). Almost all industries were showing growth. The industry with the largest increase was rental, hiring and real estate services (up 4,070), followed by financial and insurance services (up 1,830) and construction (up 1,670). The largest decrease was in agriculture, forestry and fishing (down 4,100 enterprises).
The number of business locations increased in all regional council areas between February 2007 and February 2008. The number of employees engaged grew to 38,900 (up 2.0 percent) in February 2008 compared with February 2007.
Industry statistics
Rental, hiring and real estate services
The rental, hiring and real estate services industry had the largest number of enterprises (95,500), representing 20 percent of all enterprises in New Zealand, at February 2008. This industry also had the largest increase in the number of enterprises, up 4,070 or 4.5 percent, between February 2007 and 2008. Most of this growth (96 percent) was from non-employing enterprises. There were approximately 30,600 employees engaged in the rental, hiring, and real estate services industry at February 2008, compared with 30,000 at February 2007 (up 700 or 2.2 percent).
Agriculture, forestry and fishing
There were 74,030 enterprises predominantly engaged in the agriculture, forestry and fishing industry at February 2008, a decrease of 4,100 (5.2 percent) compared with February 2007. Most of this decrease (85 percent) was from non-employing enterprises. Note that the data for the agriculture industry needs to be interpreted with caution due to influences from the sources and processes used to maintain the LBF. The technical notes accompanying this release provide more detail.
The agriculture, forestry and fishing industry engaged approximately 110,100 employees at February 2008, almost the same as in February 2007. Of these employees, 73 percent were engaged in the ANZSIC agriculture subdivision level.
Financial and insurance services
There were 26,310 enterprises predominantly engaged in the financial and insurance services industry at February 2008, an increase of 1,830 (7.5 percent) compared with February 2007. About 96 percent of this increase was from non-employing enterprises.
The financial and insurance services industry engaged approximately 57,200 employees at February 2008 with a small increase of 500 (0.9 percent) from the previous year.
Construction
There were 53,590 enterprises predominantly engaged in the construction industry at February 2008, an increase of 1,670 (3.2 percent) compared with February 2007. About 46 percent of this increase was from non-employing enterprises.
The construction industry engaged approximately 132,000 employees at February 2008, up 5,200 (4.1 percent) from the previous year. This employment increase was contributed largely by residential and non-residential building construction (57 percent) while construction services accounted for 37 percent of this increase.
Professional, scientific and technical services
There were 48,430 enterprises predominantly engaged in the professional, scientific and technical services industry at February 2008, an increase of 1,630 (3.5 percent) compared with February 2007. About 59 percent of this increase was from non-employing enterprises.
The professional, scientific and technical services industry engaged approximately 126,300 employees at February 2008, up 6,400 (5.3 percent) from the previous year. About 76 percent of this rise in employment numbers was from professional, scientific and technical services, while computer system design and related services contributed 24 percent.
Manufacturing
There were 22,030 enterprises predominantly engaged in the manufacturing industry at February 2008, nearly the same as in February 2007. Of these enterprises, 17 percent were involved in machinery and equipment manufacturing, while 15 percent were involved in fabricated metal product manufacturing.
The manufacturing industry was the largest employer at February 2008 with approximately 252,200 employees. Between February 2007 and 2008, the number of employees in the manufacturing industry decreased by 3,200 (1.3 percent). Two-thirds of manufacturing industries at the ANZSIC subdivision level recorded a decrease in employment. The main contributor to this decrease was food product manufacturing, followed by wood product manufacturing.
Regional statistics
Auckland region
At February 2008, almost one-third (31 percent) of all business locations (geographic units) in New Zealand were in the Auckland region. One-third of all employees (33 percent) were engaged by these business locations.
There were 159,400 business locations in the Auckland region at February 2008, up 2.0 percent from February 2007. The majority of industries at the ANZSIC division level recorded increases. The industries with the largest increases were rental, hiring and real estate services (up 1,040 or 3.3 percent), followed by financial and insurance services (up 750 or 6.6 percent) and professional, scientific and technical services (up 730 or 3.3 percent).
At February 2008, there were approximately 644,900 employees associated with businesses located in the Auckland region, up 2.4 percent from February 2007. The industries with the largest increases in employee numbers were professional, scientific and technical services (up 3,700 or 6.4 percent), retail trade (up 1,800 or 2.7 percent) and transport, postal and warehousing (up 1,700 or 5.4 percent). The largest reduction of employees occurred in the manufacturing industry (down 1,300 or 1.6 percent).
Remainder of North Island
Excluding the Auckland region, there were 222,100 business locations in the remaining regions of the North Island at February 2008. This was an increase of 1.0 percent when compared with February 2007. These business locations engaged approximately 829,800 employees at February 2008, a 1.5 percent increase from February 2007.
Regions showing significant increases in the number of business locations were Wellington (up 790), Waikato (up 620) and Bay of Plenty (up 300). In Wellington the industry with the highest increase in employment was health care and social assistance (up 1,200 or 5.7 percent) while in Waikato it was professional, scientific and technical services (up 1,000 or 11.0 percent).
South Island
There were 126,050 business locations in the South Island at February 2008. This was an increase of 1,890 (1.5 percent) from February 2007. These business locations engaged approximately 494,000 employees, an increase of 11,200 (2.3 percent) when compared with February 2007.
At February 2008, over half of all business locations (64,210) and employees (approximately 262,700) in the South Island were located in the Canterbury region. Compared with February 2007, Canterbury recorded increases of 960 business locations and approximately 6,300 employees in February 2008. That region contributed more than half towards the overall growth in business locations (51 percent) and number of employees (56 percent) in the South Island.
The increase of business locations in Canterbury was mainly in the rental, hiring and real estate services industry, while the increase in the number of employees was spread over many industries.
Business size
At February 2008, most enterprises in New Zealand (97 percent) had fewer than 20 employees. However, these enterprises accounted for only 31 percent of all employees. Conversely, enterprises with 100 or more employees made up 0.5 percent of the total number of enterprises in New Zealand but employed 47 percent of the total number of employees.
At February 2008, 68 percent (319,500) of all enterprises were non-employing enterprises, which is the same percentage as in February 2007. In terms of industrial activity, 28 percent of these enterprises were predominantly involved in rental, hiring and real estate services, 17 percent in agriculture, forestry and fishing, and 11 percent in professional, scientific and technical services.
During the year to February 2008, the strongest growth in employment came from businesses with 100 or more employees (up 26,000 employees or 2.9 percent), followed by firms with 20–49 employees (up 4,000 employees or 1.5 percent).
Births and deaths of enterprises
Births and deaths are presented on an annual basis, as at February. For a birth or death to be counted in a reference period, it must have occurred at some stage during the year (start of March to the end of February), and not have a changed status by the February reference point. For example, an enterprise which ceased operation at some stage during the year, and then recommenced operation before February, will not be counted as a death. In the following graphs for births and deaths, the term 'February' (eg February 2008) is used to describe this annual reference period for measuring births and deaths.
In the February 2008 reference period, 56,460 new enterprises started operation (births). These new enterprises accounted for 12 percent of the total number of enterprises (471,100) in New Zealand at February 2008. In the February 2008 reference period it is estimated that 52,690 enterprises ceased operation (although this a preliminary estimate and should be treated with caution). There was an overall increase of 1.5 percent in the total number of enterprises from February 2007 to February 2008.
Over the period 2001 to 2008, the number of enterprise births each year has varied from 42,760 to 70,180. Note that the 2004 figure of 70,180 is influenced by a methodology change and needs to be interpreted with caution (see the technical notes). The number of enterprise deaths has varied from 37,860 to 52,690 over the period 2001 to 2008. In every year from 2002, the number of births exceeds deaths and consequently there has been steady growth in the total number of enterprises each year to 2008.
The number of births each year can be expressed as a birth rate (percentage) by dividing the number of births by the total population of enterprises. Over the period 2001 to 2008, the annual birth rate of new businesses varied between 11 and 17 percent. Note that the high value in 2004 (17 percent) coincides with a change in methodology (see the technical notes). The annual death rate varied between 10 and 12 percent. The resulting business turnover rate (sum of the birth rate and death rate) ranged from 22 percent to 26 percent.
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Breakdown of births and deaths
Births can be analysed further and classified as:
- surviving births (births that survive at least one reference period in the business demography population)
- short-lived births (births that do not survive one period in the business demography population, either due to death or dormancy)
- pure births (births that have a recent birth date. The birth dates of all geographic units and the enterprise are less than two years from the February reference period).
Analysis of births over the periods 2001 to 2008 suggests around four in five births survive at least one reference period (surviving births). Of the 62,370 births in the February 2007 reference period, 51,580 survived until February 2008, representing 83 percent of total births.
Births by industry
In the February 2008 reference period, the rental, hiring and real estate services industry had the largest number of births (24 percent of total births), followed by professional, scientific and technical services (14 percent) and construction (13 percent). From 2001 to 2008 the rental, hiring and real estate industry has had the highest number of births in each year.
In the February 2008 reference period, the mining industry had the lowest number of births, followed by electricity, gas, water and waste services, and then public administration and safety. These three industries consistently had the lowest number of births over the period 2001 to 2008.
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Deaths by industry
In the February 2008 reference period, the rental, hiring and real estate services industry had the largest number of deaths (23 percent of total deaths), followed by agriculture, forestry and fishing (13 percent), professional, scientific and technical services (13 percent) and construction (12 percent). Industries with low death numbers included mining; and electricity, gas, water and waste services.
Births by employee size group
In the February 2008 reference period, the majority of births were non-employing enterprises (86 percent). Twelve percent of the births were in the 1 to 5 employees category. All other employee size categories had small numbers of births. This is a consistent trend over the period 2001 to 2008. In total, the new enterprises for 2008 had 29,470 employees, which is approximately 1.5 percent of the total number of paid employees for all enterprises.
Deaths by employee size group
In the February 2008 reference period, the majority of enterprise deaths were non- employing businesses (92 percent). A further 7 percent were in the 1 to 5 employees category. In total the ceased businesses had 18,520 paid employees (approximately 1 percent of the total number of paid employees).
Surviving births
The longitudinal nature of the LBF (source data for business demography statistics) allows enterprise births in any reference period to be tracked over subsequent years. Survival rate statistics can be used to analyse the rate of survival of new births, by both industry and business size. Survival rates are calculated as the percentage of births in each reference period that survive into future reference periods in the business demography population (surviving births divided by total births for a particular reference period). To be considered a survivor the birthed enterprise must exist in the specified succeeding reference period, as well as every reference period in between.
Survival rates of enterprises birthed in 2001
This analysis concentrates on enterprises birthed in 2001. Similar trends are observed for enterprises birthed from 2002 to 2006.
In the February 2001 reference period there were 42,760 new enterprise births. Of these, 80 percent survived the first year, 67 percent survived the second, 58 percent survived the third, 51 percent survived the fourth, 45 percent survived the fifth, 40 percent survived the sixth, and 37 percent survived the seventh (2008).
Non-employing enterprises had a significantly lower proportion (33 percent) of new births surviving the seven years to 2008 compared with businesses that had paid employees (53 percent for the 1 to 5 employees category and higher proportions for larger employee size groups).
Industries with higher survival rates over the seven-year period included mining (57 percent), health care and social assistance (52 percent), financial and insurance services (48 percent), and agriculture, forestry and fishing (47 percent). Lower survival rates were observed for the administrative and support services industry and the information media and telecommunications industry (29 percent for both).
For technical information contact:
Geoff Mead, Auckland 09 920 9100
or Mathew Page, Christchurch 03 964 8700
Email: info@stats.govt.nz
Next release ...
New Zealand Business Demography Statistics: At February 2009 will be released in November 2009.