SMALL BUSINESSES IN NEW ZEALAND - Ministry of Business ... · › Business Demography statistics provide an annual snapshot (as at February) of the structure and characteristics of

4%

20%20%

45%

0-19 20-49 50+

Number of employees

0% 50% 100%

0-19 employees 20 or more employees

6,336

993

19,374

18,996

672

1,050

17,595

16,710

26,535

16,272

15,252

9,543

5,160

55,566

55,494

22,710

68,415

35,646

107,619

Education & training

Public administration& safety

Manufacturing

Utilities

Mining

Accommodation & food services

Healthcare & social assistance

Wholesale trade

Retail trade

Transport, postal &warehousing

Administrative & support services

Arts & recreation services

Information, media & communications

Professional, scientific & technical services

Construction

Other services

Agriculture, Forestry& Fishing

Finance & insurance services

Rental, hiring & real estate

$64,853m

$15,775m

$78,151m

$73,545m

0-19 Employees

20-49 Employees

$232,324mTOTAL

50 Or More Employees

Excluded Industries / Other Items

231,400

383,450

290,400

1,197,100

1-5 Employees

6-19 Employees

2,102,350TOTAL

20-49 Employees


Data source: Statistics New Zealand Business Demography, Feb 2016

Chart 2: Number of Employees by Employee Size Group

362,856

98,748

38,340

9,780

5,325

Zero Employees

1-5 Employees

6-19 Employees515,046

TOTAL

20-49 Employees


SMALL BUSINESSES IN NEW ZEALANDHow do they compare with larger firms?

SMALL BUSINESSES* DOMINATE OUR INDUSTRIES

June 2017

Chart 1: Number of Enterprises by Employee Size Group

Chart 4: Number and Percentage of Enterprises with 0-19 Employees by Industry

Chart 5: Percentage of Enterprises with Common Ownership

→

→


Data source: Statistics New Zealand National Accounts Mar 2014 Data source: Statistics New Zealand Business Demography, Feb 2016

* Small businesses are defined here as those enterprises with fewer than 20 employees. There is no official definition of a small business in New Zealand, however enterprises with fewer than 20 employees has traditionally been used and referred to in some legislation. Australia also uses the same definition which enables comparisons to be made. Internationally there is no universally used definition for a small business: many economies use a limit higher than 20 employees.

97%OF ENTERPRISES HAVE

FEWER THAN 20 EMPLOYEES (499,944 ENTERPRISES) (CHART 1)

70%OF ENTERPRISES HAVE

ZERO EMPLOYEES (CHART 1)

29%OF EMPLOYEES IN NEW ZEALAND ARE EMPLOYED BY ENTERPRISES

WITH FEWER THAN 20 EMPLOYEES (614,580) (CHART 2)

28%OF NEW ZEALAND’S GDP IS

ESTIMATED TO BE PRODUCED BY ENTERPRISES WITH FEWER THAN

20 EMPLOYEES (CHART 3)

THE RENTAL, HIRING, AND REAL ESTATE SERVICES INDUSTRY

HAS THE HIGHEST NUMBER OF ENTERPRISES WITH FEWER THAN 20

EMPLOYEES (CHART 4)

96%OF ENTERPRISES WITH FEWER THAN 20 EMPLOYEES ARE INDEPENDENT

OPERATIONS NOT OWNED BY OTHERS (CHART 5)

MB1

4227

_JU

NE1

7


Chart 3: Estimated Contribution to GDP by Employee Size Group

115,360

1-19 20-49 50+

Number of employees2013 2014 2015

104,920

29,610

103,280115,340

34,410

96,960

33,600

122,950

2010 2011 2013 2013 2014 20152010 2011 2012 2013 2014 2015

6%

11%

11%

7%7%

14%

7%

12%

7%

13%

6% 6%

13%

14%

6-19 employees 20+ employees

2016 2016 2010 2011 2012 2013 2014 20152010 2011 2012 2013 2014 2015 2016 2016

6-19 employees 20+ employees

12%

22%

15%

26%23%

28% 28%

23% 23%

29%

21%

30%

25%

30%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

10,000

9,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Num

ber o

f ent

erpr

ises

Births Deaths

2016

21

9

14

9

5

2

46

74

82

78

75

70

1 1

3

4

4

3

3

32

2

1

1

1

5

14

20

25

0

1-5

6-19

20-49

50-99

100+

Num

ber o

f em

ploy

ees

Societies and Associations

Trusts/Estates

All Other Entities

Individual Proprietorship

Partnership

Registered Limited Liability Company

16

Num

ber o

f em

ploy

ees

< 1 year

21+ years

7

3

26

18

12

23

18

12

25

26

24

19

35

50

1-19

20-49

50+

6-10 years1-5 years

11-20 years

SMALL BUSINESSES ARE YOUNG AND DYNAMIC

Chart 6: Type of Enterprise by Employee Size Group (%)

→

Data source: Statistics New Zealand Business Demography, Feb 2016 Data source: Statistics New Zealand Business Demography, Feb 2016

Data source: Statistics New Zealand Annual Enterprise Survey, 2016Data source: Statistics New Zealand Business Demography, Feb 2016

Data source: Statistics New Zealand Business Operations Survey, 2016

Data source: Statistics New Zealand Linked Employer-Employee Data, Dec 2013-2015 Data source: Statistics New Zealand Business Demography, Feb 2016


33% OF FIRMS WITH 1-19 EMPLOYEES HAVE EXISTED FOR FIVE YEARS

OR FEWER. THIS COMPARES TO 19% FOR LARGER FIRMS

(CHART 7)

37%OF FIRMS WITH ZERO

EMPLOYEES BORN IN 2010 SURVIVED IN 2016. FIRMS WITH 1-19 EMPLOYEES HAVE SIMILAR SURVIVAL RATES TO FIRMS WITH

10-99 EMPLOYEES, BUT MUCH LOWER THAN LARGER FIRMS

(CHART 8)

42%OF ALL JOBS CREATED IN THE

YEAR ENDING DECEMBER 2015 WERE IN FIRMS WITH

1-19 EMPLOYEES (CHART 10)

$45,867WAS THE AVERAGE SALARY OF EMPLOYEES IN ENTERPRISES

WITH 1-19 EMPLOYEES (CHART 9)

Chart 7: Age of Enterprise by Employee Size Group (%)

Chart 8: Survival Rates of Enterprises Born in 2010

Chart 10: Annual Job Creation by Employee Size Group

Chart 12: Percentage of Businesses Undertaking R&D Chart 13: Percentage of Businesses Exporting

Chart 9: Average Salaries and Wages per Employee (RME)

Chart 11: Births and Deaths of Employing Small Business

0

1-5

10-19

6-9

20-49

50-99

100+

Num

ber o

f em

ploy

ees

37%

52%

59%

54%

55%

67%

80%

63%

48%

41%

46%

45%

33%

20%

Survived in 2016 Ceased by 2016

43,693

50,823

44,725

51,182

45,867

52,398

1-19 20+

Number of employees

2013 2014 2015

ZERO-EMPLOYING FIRMS GENERATE VALUE

SELF-EMPLOYED ARE ALSO SMALL BUSINESS

→

→

Chart 14: Zero-Employing Firms by Industry

Chart 15: Self-Employed by Age and Sex

Chart 16: Self-Employed by Industry

Chart 17: Self-Employed by Ethnicity


Data source: Statistics New Zealand Linked Employee-Employer Data, 2016

Female

156,369 253,740Male

Data source: Statistics New Zealand Linked Employee-Employer Data, 2016

Data source: Household Labour Force Survey 2017

$204,066WAS THE AVERAGE REVENUE PER ENTERPRISE FOR FIRMS WITH ZERO EMPLOYEES IN

2015. THIS COMPARES WITH AN AVERAGE REVENUE OF $846,574

FOR FIRMS WITH 1-19 EMPLOYEES (ANNUAL ENTERPRISE SURVEY,

AUG 2016)

28%OF FIRMS WITH ZERO EMPLOYEES

ARE IN THE RENTAL, HIRING AND REAL ESTATE INDUSTRY

(CHART 14)

102,006

48,834

41,262

362,856TOTAL

36,474

33,180

101,100

Rental, hiring & real estate

Agriculture, forestry & fishing


Construction

Finance and insurance services

All others

45%OF SELF-EMPLOYED ARE OVER THE AGE OF 50. MOST OF THE

GROWTH IN SELF-EMPLOYMENT OVER THE PAST DECADE

CAME FROM THOSE OVER 50, WHILE SELF-EMPLOYMENT OF YOUNGER AGE GROUPS

HAS FALLEN (CHART 15)

17% OF THE SELF-EMPLOYED

WORK IN THE CONSTRUCTION INDUSTRY (CHART 16)

10% OF MĀORI RUN THEIR OWN BUSINESS, BEING EITHER

SELF-EMPLOYED, OR EMPLOYING OTHERS (CHART 17)

* In this factsheet, data on numbers in self-employment comes from linked employee–employer data. A person is self-employed if they derive the majority of their income in one tax year from self employment. A person can be self-employed and also work as an employee in another business. A person who is self-employed at multiple businesses is only counted once.

4,560

33,531

74,583

TOTAL

15-19

20-29

30-39

113,697

112,704

42,396

40-49

28,63565+

50-59

60-65

410,109

TOTAL

410,109 25,101

181,176

26,658Rental, hiring & real estate

49,914Agriculture, forestry & fishing

59,094


67,866Construction

Retail trade

All others

TotalMāoriPacific Peoples

Rest of employed

Self-employed

Chart 20: Percentage of Firms Accessing Debt Financing on Acceptable Terms

Chart 21: Percentage of Firms Accessing Equity Financing on Acceptable Terms

6-19 20-49 50+

Number of employees

226,000

165,000

585,000

73,000

47,000

183,000

Full-time jobsPart-time jobs

6-19 20+

Number of employees

2011

2013

2015

16%

24%

15%

21%

17%

23%

Chart 18: Full-time/Part-time Employment by Employee Size Group


Chart 19: Percentage of firms introducing new or significantly improved products by employee size group




SMALL FIRMS FACE UNIQUE CHALLENGES→EMPLOYMENT

24% OF EMPLOYEES AT

ECONOMICALLY-SIGNIFICANT FIRMS WITH 6-19 EMPLOYEES

WERE PART-TIME. THIS COMPARES WITH

22% FOR FIRMS WITH 20-49 AND 24% FOR 50+ EMPLOYEES.

(CHART 18)

INNOVATION

17% OF FIRMS WITH

6-19 EMPLOYEES INTRODUCED INNOVATIVE GOODS OR SERVICES IN 2015. THIS

COMPARES TO 23% FOR FIRMS WITH 20 OR MORE EMPLOYEES

ACCESS TO ICT

FOR BUSINESSES WITH 6-19 EMPLOYEES:

96%USE INTERNET

20%ARE CONNECTED VIA FIBER COMPARED TO 12% IN 2014

69%HAVE A WEBSITE

72%HAVE INTERNET SALES

ACCESS TO FINANCE

94%OF FIRMS WITH

6-19 EMPLOYEES WHO REQUESTED DEBT FINANCE COULD ACCESS

IT ON ACCEPTABLE TERMS (CHART 20)

88% WHO REQUESTED EQUITY

FINANCE COULD ACCESS ON ACCEPTABLE TERMS (CHART 21)

DEBT FINANCE IS SOUGHT BY MORE BUSINESSES THAN

EQUITY FINANCE

* Data source: Statistics New Zealand Business Operations Survey, 2016

6-19 20-49Number of employees

20142015

2016 88%

95%

87%

92% 94%

95%

6-19 20-49Number of employees

2014

2015

2016

77%

85%

78%

89% 88%

94%

CONDITIONS DEFINITIONS→ →This work is based on/includes Statistics New Zealand’s data which are licensed by Statistics New Zealand for re-use under the Creative Commons Attribution-Noncommercial 3.0 New Zealand license.Please refer to the following data quality statements outlining the coverage and limitations of each data source:

› The Annual Enterprise Survey provides annual information on financial performance and financial position for industry and sector groups operating within New Zealand. The target population of the survey are economically significant enterprises operating in New Zealand, whose main activity is not superannuation funds, residential property operation, foreign government representation, religious services, or private households employing staff and undifferentiated goods-and service-producing activities of households for own use. http://www.stats.govt.nz/browse_for_stats/businesses/business_finance/annual-enterprise-survey-info-releases.aspx

› Business Demography statistics provide an annual snapshot (as at February) of the structure and characteristics of New Zealand businesses. The series covers all economically significant enterprises engaged in the production of goods and services in New Zealand. http://www.stats.govt.nz/browse_for_stats/businesses/business_characteristics/nz-business-demography-statistics-info-releases.aspx

› The Business Operations Survey is an annual modular survey providing statistics on business practices and behaviours that may have some impact on New Zealand business performance. The target population for the survey are economically significant enterprises with six or more employees operating for one year or more. http://www.stats.govt.nz/browse_for_stats/businesses/business_growth_and_innovation/business-operations-survey-info-releases.aspx

› Linked Employer-Employee Data provides a quarterly insight into the operation of New Zealand's labour market. The data covers all individuals who receive income from which tax is deducted at source: http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/linked-employer-employee-data-info-releases.aspx

› The National Accounts (Industry Benchmarks) provide comprehensive industry data on production, investment, and capital stock. This data was analysed in a supply-use balancing framework to reconcile the production, expenditure, and income measures of gross domestic product (GDP). It focuses on industry data and the benchmarks for the level of economic activity, which update and maintain the quality of quarterly GDP statistics. http://www.stats.govt.nz/browse_for_stats/economic_indicators/NationalAccounts.aspx

› The Quarterly Employment Survey measures the number of jobs (technically referred to as filled jobs), earnings, and paid hours for a sample of economically significant businesses. http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/labour-market-statistics-information-releases.aspx

› Enterprise: is an institutional unit and generally corresponds to legal entities operating in New Zealand. It can be a company, partnership, trust, estate, incorporated society, producer board, local or central government organisation, voluntary organisation, or self-employed individual.

› Enterprise birth: a new enterprise starting operation, with the restriction that no other national businesses are involved. These do not include entries into the population due to reactivations, mergers, break-ups, split-offs, or other restructuring of a group of businesses linked by ownership or control. It also excludes entries into a population resulting from changes to characteristics of existing businesses.

› Enterprise death: an enterprise ceasing operation, with the restriction that no other domestic businesses are involved in the event. This does not include exits from the population due to temporary inactivity, mergers, takeovers, break-ups, or other restructuring of a group of businesses linked by ownership or control. It also excludes exits from a population resulting from changes to characteristics of businesses which remain active.

› Enterprise group: a set of enterprise units linked by common ownership. Statistics New Zealand only records links of over 50% shareholding between enterprises. Enterprise groups include all resident groups, foreign controlled enterprise groups and domestically controlled enterprise groups.

For more information on the definitions of Business Demography sourced data see:

› http://www.stats.govt.nz/browse_for_stats/businesses/business_characteristics/BusinessDemographyStatistics_HOTPFeb16.aspx

› Jobs created: The net number of jobs created by a business, since the previous reference date.

› Full-time jobs: jobs where the employee works for 30 hours or more per week.

› Part-time jobs: jobs where the employee works for less than 30 hours per week.

› RME (Rolling Mean Employment) is a 12-month moving average of the monthly employee count for an enterprise.

http://www.stats.govt.nz/browse_for_stats/businesses/business_finance/annual-enterprise-survey-info-releases.aspx

http://www.stats.govt.nz/browse_for_stats/businesses/business_finance/annual-enterprise-survey-info-releases.aspx

http://www.stats.govt.nz/browse_for_stats/businesses/business_characteristics/nz-business-demography-statistics-info-releases.aspx



http://www.stats.govt.nz/browse_for_stats/businesses/business_growth_and_innovation/business-operations-survey-info-releases.aspx



http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/linked-employer-employee-data-info-releases.aspx



http://www.stats.govt.nz/browse_for_stats/economic_indicators/NationalAccounts.aspx



http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/labour-market-statistics-information-releases.aspx




http://www.stats.govt.nz/browse_for_stats/businesses/business_characteristics/BusinessDemographyStatistics_HOTPFeb16.aspx



http://www.stats.govt.nz/browse_for_stats/businesses/business_characteristics/BusinessDemographyStatistics_HOTPFeb14/Definitions.aspx

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SMALL BUSINESSES IN NEW ZEALAND - Ministry of Business ... · › Business Demography statistics provide an annual snapshot (as at February) of the structure and characteristics of