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New Zealand Business Demography Statistics: At February 2011
Embargoed until 10:45am  –  31 October 2011
Commentary

Please note that all figures in this release are provisional and the time series is revised back to 2000.

Little change in number of enterprises and employees

At February 2011, the total number of enterprises in New Zealand was 470,050, a decrease of 2,890 (0.6 percent) from 2010. This follows a larger decrease of 1.5 percent between 2009 and 2010. During the eight-year period between 2002 and 2009, the number of enterprises saw an increase every year.

The total number of business locations (geographic units) associated with these enterprises was 505,190 at February 2011. This was a decrease of 3,040 (0.6 percent) from 2010.

These enterprises had a total of 1.910 million paid employees at February 2011, a marginal increase of 6,800 employees (0.4 percent) compared with February 2010. (The number of paid employees, or employee count, is treated in this statistical series as a business size measure statistic, not as an official employment statistic).

Graph, Number of enterprises, at February 2006 to 2011. Graph, Employee count, at February 2006 to 2011.


Number of enterprises decreases across most industries 

Rental, hiring, and real estate services continued to be the industry with the largest number of enterprises (96,240 at February 2011), representing 20 percent of all enterprises in New Zealand. Between February 2010 and 2011, this industry recorded a small decrease in the number of enterprises (down 280 or 0.3 percent). This is the second annual decrease for this industry (down 0.4 percent in 2010) since the beginning of the current series in 2000. The majority of enterprises in this industry (95 percent at February 2011) were non-employing businesses. In comparison, only 69 percent of businesses across all industries were non-employing.

Agriculture, forestry, and fishing continued to be the second-largest industry in terms of the number of enterprises (71,270 at February 2011) despite a decrease of 2.0 percent from 2010. This industry had 109,800 employees at February 2011, up 1,800 (1.7 percent) from the previous year. At the industry subdivision level, agriculture, forestry, and fishing support services contributed most to this employment increase (up 1,100 or 4.6 percent).

Construction was the third-largest industry, with 49,610 enterprises at February 2011, but also recorded a decrease of 1,040 enterprises (2.0 percent) from February 2010. This industry had 114,000 employees at February 2011, down 1,100 (1.0 percent) from the previous year. The most significant employment decrease (1,000 employees, or 3.9 percent) was noticed for the building construction industry subdivision, which includes residential and non-residential building construction.

Manufacturing had a 1.7 percent decrease of enterprises in the year to February 2011, continuing a downward trend for the last five years. However, it continued to have the largest number of employees (225,300 at February 2011) representing 12 percent of total employees in New Zealand. Even so, this industry recorded a decrease of 3,100 employees (1.3 percent) between February 2010 and 2011. The largest employee decrease came from food product manufacturing (1,000 or 1.3 percent) followed by textile, leather, clothing, and footwear manufacturing (800 or 6.9 percent).

Professional, scientific, and technical services recorded increases in both the number of enterprises and employment at February 2011. There were 49,440 enterprises in this industry, an increase of 770 (1.6 percent), with 122,900 employees, an increase of 2,000 (1.7 percent) compared with February 2010. The most significant contribution to these increases came from the industry class of computer system design and related services, in which enterprises were up 310 (3.5 percent) and the number of employees was up 1,300 (6.7 percent).

Business locations decrease across all regions except Auckland 

In all regions of New Zealand except Auckland, the number of business locations (geographic units) decreased between February 2010 and February 2011. The number of employees increased in seven of the 16 regions, with Auckland (up 1.6 percent), Bay of Plenty (up 2.8 percent), and Waikato (up 1.3 percent) recording the largest increases.


 Graph, Number of business in Auckland region and New Zealand, by industry, at February 2011.

Auckland region

At February 2011, the Auckland region accounted for 32 percent of all business locations in New Zealand and 33 percent of all paid employees.

There were 160,550 business locations in Auckland at February 2011, up 0.5 percent from February 2010. Of the 19 industry divisions (see graph above) 12 recorded increases. Industries that contributed to the increase include professional, scientific, and technical services (up 390 or 1.7 percent), and accommodation and food services (up 250 or 4.4 percent).

At February 2011, business locations in Auckland had 627,100 employees, up 1.6 percent from February 2010. The industries with the largest increases in employee numbers were:
  • professional, scientific, and technical services (up 3,200 or 5.3 percent)
  • administrative and support services (up 2,900 or 8.7 percent)
  • financial and insurance services (up 1,300 or 5.2 percent)
  • accommodation and food services (up 1,100 or 3.0 percent).

In Auckland, only five industry divisions out of 19 had lower employee numbers at February 2011 compared with February 2010. The industry with the biggest decrease was manufacturing (down 1,400 or 1.9 percent) followed by retail trade (down 500 or 0.8 percent).

 
 
 Graph, Number of business locations by broad region, at February 2011.  Graph, Employee count by broad region, at February 2011.
 

Remainder of North Island

Excluding Auckland, there were 218,530 business locations in the remaining regions of the North Island at February 2011. This represented a decrease of 1.1 percent compared with February 2010. These business locations had approximately 804,800 employees at February 2011, just a 0.1 percent decrease from February 2010.

The regions with the largest decreases in number of business locations were Waikato (down 570 or 1.1 percent) and Northland (down 440 or 2.1 percent). In contrast, the number of employees in the Waikato region increased 2,000 (1.3 percent), with the largest contribution coming from the manufacturing industry (up 600 or 2.9 percent).

South Island

There were 125,920 business locations in the South Island at February 2011. This was a decrease of 1,390 (1.1 percent) from February 2010. These business locations had approximately 477,700 employees, a decrease of 2,300 (0.5 percent) compared with February 2010.  

At February 2011, just over half of all business locations (51 percent) in the South Island were located in Canterbury. These business locations accounted for 53 percent of all employees in the South Island. Fourteen of the 19 industry divisions in Canterbury recorded lower numbers of employees compared with February 2010. The number of employees in the accommodation and food services industry was down 1,200 (6.6 percent). 

Smaller businesses lose most employees

At February 2011, 69 percent of all enterprises (324,780) were non-employing. Of these, 28 percent were predominantly involved in rental, hiring, and real estate services, 16 percent in agriculture, forestry, and fishing, 11 percent in professional, scientific, and technical services and 10 percent in construction.

At February 2011, 28 percent of enterprises were employing fewer than 20 employees each. Enterprises with 100 or more employees accounted for less than one percent of total enterprises but employed 48 percent of total employees (see graph below).

During the year to February 2011, enterprises with one to five employees recorded the largest percentage decrease of employees (down 1.7 percent), followed by enterprises with six to nine employees (down 1.2 percent). In contrast, enterprises with 100 or more employees recorded a gain of employees (up 1.8 percent). 

 Graph, Number of enterprises and employees, by employee size group, at February 2011.

Enterprise groups have 40 percent of all employees 

A grouping of enterprises linked by common ownership is known as an enterprise group. At February 2011, there were 8,020 enterprise groups consisting of 20,340 enterprises. These represented only 4 percent of the total number of enterprises but they employed 40 percent of the total number of employees.

There were 4,830 all-resident enterprise groups (groups composed of enterprises all resident in New Zealand). These consisted of 13,770 enterprises with 300,100 employees. The number of foreign-controlled enterprise groups (multinational groups controlled by a group head with headquarters outside New Zealand) was 2,460. These foreign-controlled enterprise groups had 4,070 enterprises with 273,000 employees. There were 740 domestically controlled enterprise groups (multinational groups controlled by a group head with headquarters in New Zealand). These domestically controlled enterprise groups consisted of 2,500 enterprises with 185,400 employees. 

Enterprise deaths exceed enterprise births for second year in a row

In the February 2011 reference period, 42,370 new enterprises started operation (births), which is a decrease of 9.1 percent compared with 2010. These new enterprises accounted for 9 percent of the total number of enterprises at February 2011. This is the lowest birth rate since the beginning of the current series. Over the period 2001 to 2011, the number of enterprise births each year has varied from 42,370 to 69,380. Note that the 2004 figure of 69,380 was influenced by a methodology change and needs to be interpreted with caution (see the Data quality section for more detail).

In the February 2011 reference period, 48,950 enterprises ceased operation (deaths), which is a decrease of 7.9 percent compared with 2010. The number of enterprise deaths has varied from 37,800 to 53,170 over the period 2001 to 2011, the highest being in 2010. The February 2011 reference period was the second consecutive year since 2001 in which the provisional data showed the number of deaths exceeding the number of births.

  Graph, Number of enterprise births and deaths, February 2002 to 2011.

The number of births each year can be expressed as a percentage (birth rate) by dividing the number of births by the total population of enterprises. Over the period 2001 to 2011, the annual birth rate of new businesses varied between 9 and 16 percent. Note that the high value in 2004 (16 percent) coincided with a change in methodology (see the Data quality section for more detail). The annual death rate varied between 10 and 12 percent. The resulting business turnover rate (sum of the birth rate and death rate) ranged from 19 percent to 26 percent.  

Enterprise birth rate and death rate vary significantly by industry

For the February 2011 reference period, the number of births for the agriculture, forestry, and fishing industry was 3,190. This reflected an enterprise birth rate of only 4 percent for this industry compared with a birth rate of 9 percent for all industries. On the other hand, the number of births for the professional, scientific, and technical services industry (6,670) corresponded to a higher than average birth rate of 13 percent.

For the February 2011 reference period, the number of deaths for the agriculture, forestry, and fishing industry was 4,500. This reflected an enterprise death rate of only 6 percent for this industry compared with a death rate of 10 percent for all industries. On the other hand, the number of deaths for the professional, scientific, and technical services industry (6,630) corresponded to a higher than average death rate of 13 percent.

Non-employing enterprises have higher than average births and deaths

For the February 2011 reference period, the number of births for non-employing enterprises was 36,900. This reflected a higher than average birth rate of 11 percent. The number of births for employing enterprises (5,430) indicated a much lower birth rate of 4 percent.

For the February 2011 reference period, a similar pattern was observed for the number of deaths by employee size group. The number of deaths for non-employing enterprises was 45,200 representing a higher than average death rate of 14 percent. In contrast, the number of deaths for employing enterprises (3,800) meant a much lower death rate of 3 percent.

83 percent of 2010’s enterprise births survived to 2011  

Of the 46,610 births in the February 2010 reference period, 38,880 (83 percent) survived until February 2011. Analysis of births over the periods 2001 to 2010 suggests that around 4 in 5 births survive at least one reference period (a year). See the Data quality section for more information on survival of enterprise births.

Only 29 percent of 2001's enterprise births survived to 2011

In the February 2001 reference period, there were 43,130 enterprise births. The survival rates of these enterprises were as follows:

  • first year – 80 percent
  • second year – 67 percent
  • third year – 58 percent 
  • fourth year – 51 percent
  • fifth year – 45 percent 
  • sixth year – 40 percent 
  • seventh year – 37 percent 
  • eighth year – 34 percent 
  • ninth year – 31 percent 
  • tenth year – 29 percent.

Non-employing enterprises had a significantly lower proportion of births that survived the 10 years to 2011 (26 percent) compared with businesses that had paid employees (43 percent for the one to five employees category, and higher proportions for larger employee size groups). 

 Graph, Survival rate of 2001 enterprise births by employee size group, February 2004 to 2011.

Industries with relatively higher survival rates over the 10-year period to February 2011 included:

  • mining (47 percent)
  • health care and social assistance (45 percent)
  • agriculture, forestry, and fishing (38 percent)
  • education and training (37 percent).

Lower survival rates were observed for the administrative and support services industry (21 percent) and the information media and telecommunications industry (22 percent).

Similar trends are observed for enterprises birthed from 2002 to 2009.

Note: Enterprise and geographic unit counts in this section have been rounded to the nearest 10. Employee counts have been rounded to the nearest 100. For more detailed data, see the Excel tables in the 'Downloads' box.

 

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