Australian exporters by the numbers: 2015-16

29 Jun 2017

Tags

  • Mark Thirlwell
  • Australian Economy
  • International Trade

The latest release of the ABS Characteristics of Exporters shows that Australia continues to grow the total number of our exporters, with an increase of 2,454 (five per cent) in exporter numbers in 2015-16, following a (revised) increase of 3,840 in 2014-15.[1] That total increase reflects a jump of more than 2,600 in the number of goods exporters along with a fall of 136 in the number of exporters of services.[2] According to the ABS, there are now 53,350 exporters of goods and/or services.

The total number of exporters continues to grow

As I’ve noted in previous posts on the exporter data, the number of goods exporters has shown a significant increase since 2013-14, and this positive trend was sustained in the 2015-16 data.[3] That suggests that at least some of the potential drivers of this shift (which seem likely to include improved competitiveness, the benefits of e-commerce, and new sources of regional demand) are continuing to operate.

Growth in goods exporter numbers sustained

By sector, for those exporters where an industry could be identified, the growth in goods exporter numbers was strongest in the ‘other’ category (which captures goods exporters in the utilities and other services sectors), followed by wholesale and retail trade. There was also a drop in the number of exporters in the mining sector.

Change in Goods exporters by sector

In the case of services, the data show growth in the number of exporters in the telecommunications, computer and information sector and in construction services, but a decline in all other sectors, with a particularly marked drop in the ‘other business services’ category, a broad grouping which includes professional and management consultant services (including legal and accountancy services) and technical and trade-related services (including architectural and engineering services). Note, however, that the very short run of available services data – just three annual observations – plus the fact that the services estimates are survey based mean that it is unwise to place too much weight on the movements shown in this particular breakdown.

Change in services exporters by sector

Turning from sectors to markets, if we look at the top 15 destinations for Australian merchandise exporters ranked by the number of exporters rather than the more usual metric of value of exports, the data show that New Zealand retained its longstanding position as the most popular overseas destination for Australian businesses in 2015-16, with more than 18,500 exporters (or more than one in three of all goods exporters) selling into the market.[4] The United States remained the second most popular destination, with more than 11,000 exporters (slightly more than one in five) exporting there. Notably, China has now risen to be Australia’s third most popular export market by number of goods exporters, with more than 7,000 exporters last year, pushing it ahead of both Hong Kong and Singapore.

Markets by exporter numbers

A look at changes in exporter numbers across the same top 15 markets shows very large increases in the number of exporters to China and the United States, large increases to New Zealand and the United Kingdom, and healthy rises for Hong Kong and Fiji. Outside of that top 15, Vanuatu, India and the Netherlands all saw exporter numbers increase by more than 100 in 2015-16.

Change in Goods exporters by market

In proportional terms, China, Fiji, the United Kingdom, the United States, Japan and Korea all saw robust growth in exporter numbers in 2015-16. These results suggest that there may have been some positive payoff from Australia’s recent free trade agreements with China, Japan and Korea in terms of attracting new exporters to those markets, although of course it’s hard to distinguish this from other factors that might also have been at work.

Finally, the familiar size distribution of exporters continues to hold, whereby a relatively small number of large exporters accounts for the large majority of exports by value. In order to illustrate this point, we like to split exporters into three broad categories based on the size of their exports:

  1. Micro-exporters, defined as those which generate individual export revenues of less than $250,000
  2. Small and medium-sized exporters or SMEx, which have export revenues of between $250,000 and $50 million
  3. Mega-exporters, which have export revenues of more than $50 million

On this basis, 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, as I’ve noted before, is broadly replicated across a range of other economies).

So, in 2015-16 almost 79 per cent of all goods exporters (that is, more than 40,000 exporters) were micro-exporters. But this group together accounted for less than one per cent of the value of total goods exports that year.

At the other end of the size spectrum there were just 426 mega-exporters, less than one per cent of the total number of exporters. This small group accounted for more than 86 per cent of all export values.

In the middle, SMEx made up roughly 20 per cent of export numbers (10,400 exporters) and accounted for almost 13 per cent of exports by value.

Exporters by size and contribution to export values

We can tell a similar story about services (although as the ABS doesn’t publish a detailed breakdown of services exporters with values below A$1 million of revenue, we have to combine the micro-exporter and SMEx categories). In this case, just 113 exporters of services (less than four per cent of all services exporters) generated 73 per cent of export values in 2015-16.

 

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[1] Changes to ABS methodology mean that a count of exporters of services, and hence of total exporters, is only available for the past three years. Estimates on the number of goods exporters are compiled from data sourced from the Department of Immigration and Border Protection and from the Australian Bureau of Statistics Business Register while estimates for services exporters are based on the Survey of International Trade in Services (SITS). Since the count of services exporters is derived from a sample survey, changes in units selected in the sample can impact annual counts of businesses, especially at the type of services level.
It is also important to remember that the number of services exporters excludes businesses that only supply goods or services to foreign tourists or students in Australia (so-called supply mode 2, which in this case refers to the Visitor Economy), 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. However, estimates of these services are compiled from information obtained from the consumers of these services rather than the businesses providing the services, and so are not captured in the SITS. As a result, in 2015-16, the count for exporters of services only covers about 38 per cent of service exports by value for that year.
[2] The difference between the total number of exporters and the sum of the number of exporters of goods and the number of exporters of services represents the number of exporters of both goods and services. Note however that the ABS also warns that there ‘is no accurate methodology to calculate the overlap between goods and services exporters so these data are a careful estimate and should be used with caution’.
[3] The ABS also recently changed the methodology it uses to estimate the number of goods exporters. While this limits comparability with the back data however, the ABS reckons that the trend of goods exporter numbers, as opposed to the level, should not be significantly altered by the new count.
[4] No equivalent data is available for services exporters.