Australian exporters by the numbers, 2014-15

29 Jun 2016

Tags

  • Mark Thirlwell
  • Australian Economy
  • International Trade

The Australian Bureau of Statistics (ABS) has released the latest edition of its Characteristics of Australian Exporters, which provides exporter counts for 2014-15, including an improved estimate of the total number of exporters, along with a breakdown of exporter numbers by export market and industry. Strikingly, the new data show that Australia added more than four thousand new exporters in 2014-15, pushing the total well over 51,000.

One important change in this year’s release is that the ABS has altered the methodology it uses to estimate the number of goods exporters1. The good news is that this change means that the same statistical unit is now used to collect data on exporters of goods and of services, which increases the accuracy of the estimate of total exporters2. The not so good news is that this change introduces a break into the time series for the number of goods exporters (after changes in 2013 it was already the case that estimates of counts of services exporters for 2013-14 and 2014-15 were not directly comparable with earlier estimates). Still, according to the ABS, the trend of goods exporter numbers, as opposed to the level, should not be significantly altered by the new count.

The headline number from the current release is that in 2014-15 there were 51,228 exporters of goods and/or services. That represented an increase of 4,160 (or nine per cent) from 2013-14. Within that total, the number of goods exporters increased by 3,947 (nine per cent) to 48,681 while the number of services exporters increased by 260 (eight per cent) to 3,5573.

By sector, the number of goods exporters is dominated by wholesale trade (12,912 exporters or about 27 per cent of all goods exporters), manufacturing (9,306 exporters, 19 per cent), and retail trade (4,261 exporters, nine per cent).

Change in goods exporter numbers for top 15 markets, 2014-15

The most important services sectors include telecommunications, computer and information services and other business services4.

For our purposes we like to categorise exporters into three categories based on the size of their exports:

  • Micro-exporters, which we define as those with exports of less than $250,000;
  • Small and medium-sized exporters (SMEx), which have exports between $250,000 and $50 million; and
  • Mega-exporters, which have exports of more than $50 million)

As we’ve noted before, Australia’s export profile is dominated by micro-exporters in terms of the number of exporters and by mega-exporters in terms of the value of overall exports (a stylised pattern that is broadly replicated across a range of other economies). For example, in 2014-15 more than 79 per cent of all goods exporters (that is, more than 38,600 exporters) were micro-exporters. But this group accounted for just 0.6 per cent of the value of total goods exports that year. At the other end of the size spectrum there were just 425 mega-exporters, less than one per cent of the total number of exporters. This small group accounted for more than 87 per cent of all export values. In the middle, SMEx made up almost 20 per cent of export numbers (more than 9,600 exporters) and accounted for almost 12 per cent of exports by value.

Exporter distribution by size in 2014-15

Unfortunately, the published ABS data does not allow us to break down services exporters into our separate micro- and SMEx categories, but the combined group accounted for almost 97 per cent of exporter numbers in 2014-15 and around 25 per cent of total export value. In the same year, there were 110 mega-exporters of services, or about three per cent of the total, together accounting for roughly 75 per cent of export dollars earned5.

Data on exporter numbers also offers us an alternative way to rank the relative importance of export markets. The usual way we do this is by using the value of exports sold, but the data in Characteristics means that we can also rank countries by the number of exporters selling to them6.

Two different ways to rank export markets

On this alternative basis, New Zealand was Australia’s most important export market in 2014-15, the destination for more than 18,000 exporters, or more than one in three of all goods exporters. Other countries that move up the rankings on this basis include the United States (destination for more than 10,000 exporters or more than 20 per cent of the total), Singapore, Hong Kong, the United Kingdom and PNG.

The most striking news in this week’s ABS release was that jump of more than 4,000 in the overall number of exporters to bring the total to over 51,000. While the lack of consistent data on services exporters means we can’t track the trend in total exporter numbers over time, we can splice together the back data on goods exporters with the new numbers. That shows that the last two years have now each seen a substantial increase in the number of (goods) exporters, with an increase of almost 4,000 goods exporters in 2014-15 following an increase of around 2,000 in the previous year. That marks a significant break with past experience: for the seven years between 2006-7 and 2012-13, the exporter count was relatively flat (although the relatively stable total numbers did disguise a large amount of churn, particularly among micro-exporters).

Australia: Number of goods exporters

When we saw last year’s jump in exporter numbers, I suggested that this might have been, at least in part, the product of an improvement in Australia’s relative international competitiveness (by the end of 2013-14 the real exchange rate had fallen almost 10 per cent from its mid-2012 peak), or that it might be the start of the much-anticipated enabling impact of e-commerce on exporter numbers. Now, 2014-15 has seen an even larger jump in exporter numbers. That would seem be consistent with the improvement in competitiveness story, as the shift in relative competitiveness continued in 2014-15, with the real exchange rate declining by almost another ten per cent between July 2014 and June 2015, bring the total real depreciation from mid-2012 to more than 18 per cent7.

Of course, once again it is possible that technology also played a role in boosting exporter numbers. In addition, note that since the ABS count does not currently include very small exporters (businesses with export values of less than $2,000 per transaction), the numbers reported here may also exclude a significant number of small traders and individuals who are now benefitting from e-commerce enabled cross-border transactions.

By size of exporter, the increase in numbers in 2014-15 relative to 2013-14 was largely driven by growth in the number of micro-exporters, but there was positive growth across all three categories. Thus the 3,947 increase in the number of goods exporters (up a bit less than nine per cent) was driven by an increase of 3,294 micro-exporters (up a bit more than nine per cent), an increase of 635 SMEx (up seven per cent) and an increase of 18 mega-exporters (up four per cent).

In the case of services exporters, while in absolute terms growth in the combined number of micro-exporters and SMEx accounted for 244 of the overall increase of 260 services exporters (both up by more than seven per cent), the mega-exporter category saw greater proportional growth, with an increase of 17 exporters (up 18 per cent).

By sector, every category of goods exporter saw an increase in the absolute number of exporters, although the biggest increase (of more than 2,000 exporters) came in the ‘unidentified by industry’ category. Notably, 2014-15 saw the addition of almost 300 new manufacturing exporters.

Change in number of goods of exporters by sector, 2014-15

In the case of services, the biggest increases in numbers were in telecommunications, computer and information services and in financial services.

Change in number of services exporters by sector, 2014-15

Finally, in terms of markets (ranked by the top 15 in terms of exporter numbers), the biggest increases in exporter numbers in 2014-15 were to Hong Kong (which saw more than 1,000 new exporters)8, New Zealand (up by more than 900), the United States (up by more than 800) and the United Kingdom (up by more than 500).

Change in goods exporter numbers for top 15 markets, 2014-15

Only two of the top 15 markets – Malaysia and Singapore – experienced a small drop in the number of exporters in 2014-15.

 

1  For detail, see the ABS explanatory notes.
2  That said, the ABS continues to caution that there is no accurate methodology to calculate the overlap between goods and services exporters, so the total figure remains a ‘careful estimate’.
3  It’s important to remember that the exporter count for services exporters is only a partial one. The ABS count excludes businesses that only supply goods or services to foreign tourists or students in Australia (known as supply mode 2), such as hotels, restaurants, retail businesses, tourist facilities, transport businesses, theatres, and educational institutions. In theory, these businesses should be included in counts of exporters but estimates are compiled from information obtained from the consumers of these services rather than the businesses providing them. In addition, the count also excludes Australian-owned businesses located overseas supplying services (and/or goods) to or from the country in which they are located (supply mode 3 - usually called foreign affiliates trade). And while the services count does capture the other two modes of services supply (modes 1 and 4) it does not include smaller and/or occasional exporters in this category.
4  Note that firms may export more than one type of service.
5  Because of the limited coverage of services exports set out in note 3, we have data on services exporters that account for a combined total of just $22.1 billion of services exports. That leaves a further $41 billion of services exports (or 65 per cent of total services exports) for which we don’t have a corresponding exporter count.
6  The data on exporter numbers by market is only available for goods exporters.
7  Based on the BIS broad real exchange rate series.
8  Exporter numbers to ‘Greater China’ (Hong Kong plus China) were up by more than 1,300.