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Number of new businesses rises, but SMBs remain vulnerable

The number of trading businesses in Australia rose 0.4 percent in 2010-11, thanks to an increase in new business registrations and a decline in exit rates, the Australian Bureau of Statistics (ABS) said.

As of June 2011, there were 2.13 million actively trading businesses, as the sector continued to bounce back from negative growth rates during the Global Financial Crisis. In the 2009-10 financial year, business numbers grew 3.6 percent, compared with the previous year, when they declined -1 percent.

Despite representing largest business type in the country (96 percent), the ABS found small and micro businesses are still the most vulnerable to failure, with non-employing businesses recording a significantly lower survival rate than employing businesses.

As of June 2011, the ABS found:

  • Over two million businesses employed less than 20 staff (including 1.3 million businesses who did not employ any staff); and
  • Over two million businesses had an annual turnover of less than $2 million.

The greatest number of businesses were in the construction industry (17 percent), followed by professional, scientific and technical services (12 percent) and rental, hiring and real estate services (11 percent).

The agriculture, forestry and fishing industry and manufacturing industry continued the decline in business numbers seen each year since 2007.

In the 2009-10 financial year, every state and territory recorded an increase in the number of businesses, but in 2010-11, Queensland, South Australia and Tasmania recorded a decrease in business numbers.