Number of new businesses rises despite pandemic challenges

Figures released by the Australian Bureau of Statistics revealed that at 30 June 2021 there were 2,402,254 actively trading businesses in the Australian economy.

This represented an increase of more than 87,800 businesses with a 15.8 per cent entry rate (365,480 entries) and a 12 per cent exit rate (277,674).

The results showed that in 2020-21 the three industries with the largest net increase in businesses were construction (an increase of 16,603 to 410,839 businesses), professional, scientific and technical services (an increase of 14,432 to 316,462 businesses), healthcare and social assistance (an increase of 10,674 to 159,076 businesses).

The three industries with the largest percentage growth in businesses in 2020-21 were other services (+7.4 per cent, with an increase of 7,868 to 114,575 total), healthcare and social assistance (+7.2 per cent, with an increase of 10,674 to 159,076 total) and retail trade (+6.3 per cent, with an increase of 8,593 to 145,079 total).

The industry with the largest percentage decrease in businesses in 2020-21 was transport, postal and warehousing (-2.8 per cent, with a decrease of 5,589 to 194,459 total).

In 2020-21 the three industries with the largest net increase in businesses were construction (an increase of 16,603 to 410,839 businesses), professional, scientific and technical services (an increase of 14,432 to 316,462 businesses) and healthcare and social assistance (an increase of 10,674 to 159,076 businesses).

The number of employing businesses increased by 13.6 per cent, with a net movement of 58,209 surviving businesses from non-employing to employing.

This included a 15.2 per cent increase in businesses with one to four employees, increasing by 92,495 to 699,623 total, a 7.6 per cent increase in businesses with five to 19 employees, increasing by 16,198 to 230,633 total and a 2.2 per cent decrease in non-employing businesses, decreasing by 31,056 to 1,410,049 total.

In 2020-21 93.0 per cent of businesses had turnover of less than $2 million, 28.7 per cent of businesses had turnover of less than $50,000 and 81.7 per cent of businesses had turnover of less than $200,000.

There was also a 12.5 per cent increase in businesses with turnover of less than $50,000, with an increase of 76,588 to 689,620 total and a 0.5 per cent decrease in businesses with turnover of $5 million to $10 million and $10 million or more.