RDP 2003-01: Business Surveys and Economic Activity 3. Business Surveys in Australia

Chris Aylmer and Troy Gill

February 2003

There are numerous private-sector surveys that focus on the business sector in Australia.[6] The organisations sponsoring these surveys are quite diverse, largely reflecting the various purposes for which the surveys are undertaken. Sponsors include individual firms (both financial and non-financial), industry groups and chambers of commerce. Business surveys can also be differentiated by industry coverage, regional focus and/or firm size. The number of firms surveyed is generally larger for quarterly surveys than for monthly surveys. As a result, the aggregate responses tend to be less volatile in the quarterly surveys. Nevertheless, monthly surveys can provide a useful early signal as to how sentiment is evolving.

The main private sector national business surveys in Australia with a reasonably long history are as follows:

  • the Australian Chamber of Commerce and Industry (ACCI) National Survey of Business Expectations (commenced in 1994);[7]
  • the ACCI-Westpac Survey of Industrial Trends (1960);
  • the Australian Industry Group (AIG) and PricewaterhouseCoopers (PWC) Survey of Australian Manufacturing (1992);
  • the Dun & Bradstreet National Business Expectations Survey (1988);
  • the National Australia Bank (NAB) Quarterly Business Survey (1989); and
  • the Yellow Pages Business Index – Small and Medium Enterprises (1993).

Details of the various surveys are shown in Table 1. The surveys are generally conducted by phone, or by the completion of survey forms. Companies tend to be surveyed towards the end of the middle month of the quarter and/or in the first couple of weeks of the third month of the quarter. Business surveys that include more than one industry will often ensure that the number of respondents in each industry is broadly representative of that industry's share in total output. Within individual industries, however, survey responses are not usually weighted by output or employment, though some surveys may use the number of employees as a filter (for example, the NAB survey draws from firms with 40 or more employees).

Table 1: Private Sector Business Surveys
  ACCI ACCI-Westpac AIG-PWC Dun & Bradstreet NAB Yellow Pages
National Survey
of Business
Expectations		 Survey of Industrial Trends Survey of Australian Manufacturing National Business Expectations Survey Quarterly Business Survey(a) Small and
Medium
Business Index(b)

Notes: (a) A monthly survey is also available.
(b) The small business survey was expanded in November 2000 to include medium-sized businesses.
(c) First observation is for the preceding quarter, i.e. September 1994.
(d) Expected profits for the year ahead commenced in June 1988; expected capital expenditure for the year ahead commenced in March 1961; input cost and selling price data commenced in June 1966.
(e) Expected overtime, new orders, profits and stocks commenced in June 1995.
(f) Expected capital expenditure commenced in June 1994.
(g) Expectations data for the year ahead commenced in November 1994; prices data commenced in November 1995.
Frequency Quarterly Quarterly Quarterly Quarterly/monthly Quarterly Quarterly
Sample size (approx) 1,900–2,500 200 850–900 1,200 900 1,800
Survey coverage All major sectors Manufacturing Manufacturing Manufacturing, retail and wholesale All major sectors Most major sectors
By industry No Sub-industry Sub-industry Refer above Yes Yes
By firm size Yes Yes No No Yes Small and medium-sized
enterprises
By state No Yes Yes No Yes Yes
Commenced November 1994(c) September 1960(d) September 1992(e) March 1988(f) September 1989 May 1993(g)
Release timing 1–2 months after quarter Last month of quarter Last month of quarter Following
month		 Month after
quarter		 Mid-month of quarter

Areas of focus can vary across surveys (see Table 2). All surveys provide information on sales/output/trading conditions, profitability, employment, capital expenditure and selling prices. There is a survey question relating to input costs in five of the six surveys, while inventories and exports are covered in four of the six surveys. Only three of the six surveys ask a question about confidence. Other questions, such as those relating to capacity utilisation, overtime and new orders, are covered in a small number of surveys.

Table 2: Business Survey Areas of Interest
  ACCI ACCI-Westpac AIG-PWC Dun & Bradstreet NAB Yellow Pages
Confidence   ×     × ×
Trading conditions
(including sales/output)		 × × × × × ×
Profitability × × × × × ×
Capital expenditure × × × × × ×
Inventories   × × × ×  
Exports × × ×   ×  
Employment × × × × × ×
Input costs × × ×   × ×
Selling prices × × × × × ×
Capacity utilisation   × ×   ×  
Overtime × × ×      
New orders   × ×   ×  
Deliveries of raw materials     ×      

Questions are not always posed in the same manner (for more details on the main individual survey questions, see Appendix A). For example, in an effort to take account of seasonal fluctuations, respondents may be asked explicitly to exclude normal seasonal changes (ACCI-Westpac, NAB and the Yellow Pages) or make the comparison with the corresponding period 12 months ago (Dun & Bradstreet). A priori, the latter suggests that comparisons with official statistics should be done in year-ended terms. In the case of the ACCI and AIG-PWC surveys, the aggregate results are seasonally adjusted.

There is potential for confusion in some of the surveys. For series such as sales, production and exports, for example, it is not always clear whether real or nominal magnitudes are being referred to (though this distinction becomes less important in a low-inflation environment). Moreover, as stated earlier, firms may be reporting relative to some trend in growth, or relative to zero growth. There are also timing differences between the surveys and comparable official statistics, with most of the ‘actual’ and ‘expected’ results referring to the past three months and the next three months (rather than for the quarter as a whole).

Footnotes

The Australian Bureau of Statistics also produces a survey of business expectations – Australian Business Expectations (ABS Cat No 5250.0). However, this survey has been discontinued following the release of the results for March quarter 2003. [6]

The ACCI Survey of Investor Confidence is not included as quarterly observations have only been available since September quarter 1997. [7]