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Background

AUSTRALIAN BUSINESS STATISTICS 2024

  • Breakdown of Australian businesses by industry, size and location
  • Detailed profitability, earnings and business lending statistics
Two workers with a business van

Conditions for Australian businesses have been challenging for the past few years. To put it mildly.

The 2022/23 financial year was particularly tough, with a significant drop in the number of new businesses opening and an increase in business closures, compared to FY 2021/22.

For a deeper insight into the state of play across Australian businesses, we've compiled an extensive list of business statistics and facts.

Number of businesses in Australia

Number os businesses in Australia 2023/24

Overall, there were 2,589,873 actively trading businesses in Australia as of 30 June 2023.

To put that into perspective, there's just shy of one Australian business for every 10 people in the country.

In FY 2022/23 there was a 0.8% increase in the number of businesses operating compared to the previous year, or 19,973 extra businesses. That rate of growth has fallen from the year before, when it was +7%, or 167,646 extra businesses.

Here's how the number of businesses has changed over the years...

And here's the total broken down by type of business.

The company structure dominates (42%), followed by sole proprietors (30%), trusts (19%), then partnerships (9%).

The remainder (only 393) are public sector businesses.

The high level of consumer spending that made strong business number growth possible in 2021/22 dried up in 2023/23, making trading conditions challenging for Australian businesses.

“In 2023, most of the effect of the pent-up demand post COVID waned," Dr Pratiti Chatterjee of the UNSW Business School told Money.com.au.

"And at the same time households saw their disposable real income decrease because of inflation.

“From a business point of view, this translated to weaker demand for products across the board at the same time as wage costs were increasing,” Dr Chatterjee said.

There had already been a spike in the number of companies entering external administration.

The latest figure for the June 2022 quarter (1,567) was a 23% increase on the same period in 2021.

Of course, some sectors of the economy can weather turbulence better than others.

Let's look at the current industry-by-industry business number breakdown.

Industry-by-industry business statistics

Australian business statistics by industry 2023

Construction remains Australia's largest industry by number of businesses operating.

Although it contracted by 0.1% (-392 businesses) in 2022-23.

Health care and social assistance (+6.1%), financial and insurance services (+2.7%), and transport, postal and warehousing (+2.4%) were the sectors with the biggest growth last year in terms of the number of businesses operating.

Administrative and support services (-1.6%) and retail trade (-1.4%) saw the largest relative decline.

And here are largest industries by number of employees.

The traditional industries dominate here too, with healthcare, social assistance, and retail combined making up almost 24% of Australia's workforce.

Business statistics - employment by industry 2023

The survival rate of new businesses varies a lot between industries.

On one end of the scale, just under 64% of agriculture, forestry and fishing businesses survived beyond three years of operating (among businesses started in the 2018/19 financial year).

At the other end, only 35.6% of transport, postal and warehousing businesses survived over the same time frame.

The overall survival rate across all industries was 50.8%.

According to Dr Chatterjee, the continuing recovery from the pandemic and international factors have been be key to determining which industries survive and thrive in 2023.

“Travel and education exports have once again become important for the Australian economy”, she said.

But there are challenges for some sectors, like building and construction, according to Yanir Yakutiel, CEO of business lender, Lumi.

"Continued RBA rate increases have put further pressure on house prices and development, with lead contractors on fixed contracts particularly exposed," he said.

But Yakutiel echoed the optimism for the tourism and education sectors, as well as the related hospitality and services industries.

"They still have much further to bounce back from pre-pandemic levels as tourists and overseas students return to Australia and normal consumption levels resume", he said.

State-by-state business statistics

Business numbers by state 2023

The Australian Capital Territory had the biggest percentage growth in businesses operating in 2022-23.

Its 3.5% growth rate was more than three times that of New South Wales (5.5%), although NSW remains the state with the highest total number of businesses (870,916).

Victoria was the only state to record a decline in the number of businesses operating, with 7,607 fewer businesses operating compared to the previous year (-1%).

Victoria also had the highest number of businesses moving to a different state (-1,345), while Queensland had the highest inward business migration (+1,782).

Looking at the number of businesses per head of population, New South Wales has the highest at 0.11 businesses per person. Tasmania has the lowest at 0.06.

The Northern Territory has the lowest business survival rate. Less than half (48.2%) of business there lasted beyond three years. Tasmanian businesses had the best survival rate — 54.7% of businesses there lasted beyond three years.

State-by-state churn of businesses

State/territory

New South Wales

Businesses opened

138,069

Businesses closed

128,795

Net migration in/out of state

-1,127

State/territory

Victoria

Businesses opened

114,601

Businesses closed

120,862

Net migration in/out of state

-1,345

State/territory

Queensland

Businesses opened

78,596

Businesses closed

69,347

Net migration in/out of state

1,782

State/territory

South Australia

Businesses opened

22,646

Businesses closed

21,210

Net migration in/out of state

304

State/territory

Western Australia

Businesses opened

37,306

Businesses closed

33,213

Net migration in/out of state

429

State/territory

Tasmania

Businesses opened

5,989

Businesses closed

5,346

Net migration in/out of state

158

State/territory

Northern Territory

Businesses opened

2,673

Businesses closed

2,256

Net migration in/out of state

-106

State/territory

Australian Capital Territory

Businesses opened

6,210

Businesses closed

4,961

Net migration in/out of state

-69

State/territory

Other territories/unknown

Businesses opened

275

Businesses closed

402

Net migration in/out of state

-26

State/territoryBusinesses openedBusinesses closedNet migration in/out of state

New South Wales

138,069

128,795

-1,127

Victoria

114,601

120,862

-1,345

Queensland

78,596

69,347

1,782

South Australia

22,646

21,210

304

Western Australia

37,306

33,213

429

Tasmania

5,989

5,346

158

Northern Territory

2,673

2,256

-106

Australian Capital Territory

6,210

4,961

-69

Other territories/unknown

275

402

-26

How many small businesses are there in Australia?

The business sector in Australia is dominated by SMEs (small and medium enterprises).

In fact, 97.3% of all business in Australia (or around 2.5 million) are small businesses (0-19 employees) and a further 2.5% are medium businesses (64,559), employing 20-199 employees.

Among the population of small businesses, 62.9% do not have any employees, 27.9% employ between 1-4 people and 9.2% employ between 5-19 people.

The remaining 0.2% of businesses in Australia have more than 200 employees.

But overall, large businesses employ more people (4.202 million) than any other type of business.

Business finance statistics: earnings and profitability

Mining was again comfortably Australia's largest industry by earnings ($220.32 billion in 2021-22), growing by more than 32% compared to the previous year.

Each of the other highest-earning industries grew their income in 2021-22, with the exception of construction which declined by more than $5 billion (-9.3%).

Most profitable businesses in Australia

Business sectorProfit margin

Property operators and real estate services

74.4%

Metal ore mining

50.4%

Professional, scientific and technical services (except computer system design and related services)

45.3%

Oil and gas extraction

39.5%

Creative and performing arts activities

39.1%

Coal mining

38.3%

Medical and other health care services (private)

31%

Rental and hiring services (except real estate)

22.7%

Building cleaning, pest control and other support services

21%

Fishing, hunting and trapping

20.7%

Source: ABS, Annual estimates of key economic and financial performance of industries in Australia, including income, expenses, profit and capital expenditure for 2021-22 financial year.

“Profitability was largely driven by higher demand for goods and services, which saw businesses pass higher costs onto consumers,” said Robert Ewing, ABS head of business indicators.

“After slower profit growth across the earlier COVID-19 pandemic affected years almost all industries recorded higher operating profits in 2021-22. This is despite many businesses seeing increased input costs and a reduction in government COVID-19 subsidies.”

What about the least profitable industries?

Air and space transport, motion picture and sound recording, and water transport were the only sectors recording negative profit margins in 2021-22.

Private hospitals as a sector has one of the lowest overall profit margins, as well as being the sector with the highest proportions of loss-making businesses.

Least profitable businesses in Australia

Business sectorProfit margin

Air and space transport

-2.8%

Motion picture and sound recording activities

-1.3%

Water transport

-0.3%

Hospitals (private)

1%

Exploration and other mining support services

2%

Telecommunications services

2%

Fuel retailing

2.7%

Heavy and civil engineering construction

3.5%

Grocery, liquor and tobacco product wholesaling

4.3%

Food retailing

4.8%

Printing (including the reproduction of recorded media)

4.8%

Source: ABS, Annual estimates of key economic and financial performance of industries in Australia, including income, expenses, profit and capital expenditure for 2021-22 financial year.

Business financials by industry

Industry

Agriculture, forestry and fishing

Earnings ($billion)*

$27,093

Profit margin

19.6%

Businesses made a profit/broke even

71.5%

Businesses made a loss

28.5%

Industry

Mining

Earnings ($billion)*

$220,323

Profit margin

42.5%

Businesses made a profit/broke even

53.3%

Businesses made a loss

46.7%

Industry

Manufacturing

Earnings ($billion)*

$50,584

Profit margin

8.8%

Businesses made a profit/broke even

74.4%

Businesses made a loss

25.6%

Industry

Finance and insurance services

Earnings ($billion)*

$16,169

Profit margin

26.4%

Businesses made a profit/broke even

80.1%

Businesses made a loss

19.9%

Industry

Electricity, gas, water and waste services

Earnings ($billion)*

$31,759

Profit margin

9.9%

Businesses made a profit/broke even

70.1%

Businesses made a loss

29.9%

Industry

Construction

Earnings ($billion)*

$52,063

Profit margin

8.9%

Businesses made a profit/broke even

77.7%

Businesses made a loss

22.3%

Industry

Wholesale trade

Earnings ($billion)*

$34,589

Profit margin

5.5%

Businesses made a profit/broke even

72.5%

Businesses made a loss

27.5%

Industry

Retail trade

Earnings ($billion)*

$40,694

Profit margin

6%

Businesses made a profit/broke even

73.6%

Businesses made a loss

26.4%

Industry

Accommodation and food services

Earnings ($billion)*

$13,172

Profit margin

8.9%

Businesses made a profit/broke even

76%

Businesses made a loss

24%

Industry

Transport, postal and warehousing

Earnings ($billion)*

$37,199

Profit margin

7.3%

Businesses made a profit/broke even

86.6%

Businesses made a loss

13.4%

Industry

Information media and telecommunications

Earnings ($billion)*

$21,525

Profit margin

5.3%

Businesses made a profit/broke even

77.9%

Businesses made a loss

22.1%

Industry

Rental, hiring and real estate services

Earnings ($billion)*

$71,261

Profit margin

63.2%

Businesses made a profit/broke even

84.3%

Businesses made a loss

15.7%

Industry

Professional, scientific and technical services

Earnings ($billion)*

$38,273

Profit margin

36.8%

Businesses made a profit/broke even

81.7%

Businesses made a loss

18.3%

Industry

Administrative and support services

Earnings ($billion)*

$12,518

Profit margin

9.2%

Businesses made a profit/broke even

84.2%

Businesses made a loss

15.8%

Industry

Public administration and safety (private)

Earnings ($billion)*

$1,484

Profit margin

11.5%

Businesses made a profit/broke even

88.6%

Businesses made a loss

11.4%

Industry

Education and training (private)

Earnings ($billion)*

$6,374

Profit margin

10.7%

Businesses made a profit/broke even

78.5%

Businesses made a loss

21.5%

Industry

Health care and social assistance (private)

Earnings ($billion)*

$36,574

Profit margin

19.3%

Businesses made a profit/broke even

87.2%

Businesses made a loss

12.8%

Industry

Arts and recreation services

Earnings ($billion)*

$5,503

Profit margin

14.1%

Businesses made a profit/broke even

81.2%

Businesses made a loss

18.8%

Industry

Other services

Earnings ($billion)*

$6,194

Profit margin

16%

Businesses made a profit/broke even

80.7%

Businesses made a loss

19.3%

Industry

Overall

Earnings ($billion)*

$707,180

Profit margin

13.3%

Businesses made a profit/broke even

81%

Businesses made a loss

19%

IndustryEarnings ($billion)*Profit marginBusinesses made a profit/broke evenBusinesses made a loss

Agriculture, forestry and fishing

$27,093

19.6%

71.5%

28.5%

Mining

$220,323

42.5%

53.3%

46.7%

Manufacturing

$50,584

8.8%

74.4%

25.6%

Finance and insurance services

$16,169

26.4%

80.1%

19.9%

Electricity, gas, water and waste services

$31,759

9.9%

70.1%

29.9%

Construction

$52,063

8.9%

77.7%

22.3%

Wholesale trade

$34,589

5.5%

72.5%

27.5%

Retail trade

$40,694

6%

73.6%

26.4%

Accommodation and food services

$13,172

8.9%

76%

24%

Transport, postal and warehousing

$37,199

7.3%

86.6%

13.4%

Information media and telecommunications

$21,525

5.3%

77.9%

22.1%

Rental, hiring and real estate services

$71,261

63.2%

84.3%

15.7%

Professional, scientific and technical services

$38,273

36.8%

81.7%

18.3%

Administrative and support services

$12,518

9.2%

84.2%

15.8%

Public administration and safety (private)

$1,484

11.5%

88.6%

11.4%

Education and training (private)

$6,374

10.7%

78.5%

21.5%

Health care and social assistance (private)

$36,574

19.3%

87.2%

12.8%

Arts and recreation services

$5,503

14.1%

81.2%

18.8%

Other services

$6,194

16%

80.7%

19.3%

Overall

$707,180

13.3%

81%

19%

Source: ABS, 2021-22 financial year. *Before interest, tax depreciation and amortisation

Of course, profitability can vary massively between different businesses in the same industry.

For example, how established a business is can be an indicator of profitability.

A Money study on business financial security found that twice as many established businesses (20%) make significant profits of over 30%, compared to young businesses (10%).

Location in Australia can also be a factor.

Just over a quarter (29%) of ACT businesses make no profit, compared with businesses in Western Australia (13%), New South Wales (13%) and Victoria (10%) according to the same Money.com.au study.

Australian business lending statistics

Business lending in Australia increased significantly in 2022 and continued to grow in the early part of 2023. Overall, outstanding finance to businesses was up almost 9% in June 2023, compared to the previous year.

New lending has been predominantly at variable rates. Just over 86% of outstanding business finance as at June 2023 was on a variable rate, compared to just under 85% a year previously.

The proportion of business finance that's on a variable rate has been creeping up steadily since July 2019 (the earliest records published by the RBA) when it was just over 78%.

Interest rates on business lending have risen steeply since May 2022 when the Reserve Bank of Australia began lifting the official cash rate.

The rate of increase has tapered somewhat, but is still heading north as the lagging impact of tighter central bank monetary policy is still being felt.

Business credit card statistics

Business credit card spending also continues to surge in 2023.

In fact, the monthly transaction value hit another all-time high in May 2023, at $8.53 billion.

"Much of the increased spend is travel related as this roars back to life and air fares increase in price," Money.com.au's credit cards expert Brad Kelly said.

Indeed, total overseas spending on commercial credit and charge cards has comfortably surpassed pre-COVID levels, to a monthly high of $495.2 million in May 2023. That includes spending by small businesses as well as spending on corporate credit cards. That was a 31% increase from the same time in 2022.

'Device present' overseas purchases (those make physically at an overseas location) made up a large proportion of the increase, although that portion of overseas spending is still down significantly compared to pre-pandemic levels.

Kelly believes the tighter economic conditions Australia is experiencing will encourage more businesses to move away from credit cards and adopt charge cards.

These are cards with no credit limit, but which require the balance to be cleared each statement period.

"Charge cards will be very much in vogue in 2023 because they are an expense line not a liability on the balance sheet," Kelly explained.

"Typically banks sell credit cards with limits, and limits soak up credit. For a business, credit ties up working capital, whereas a charge card does not do that.

"This is something that businesses don’t realise," he said.

He added that the rising cost of credit will likely also make charge cards — which do not incur interest charges — more popular among businesses.

This is already being reflected in the growing market share of Australia's major charge card providers, American Express and Diners Club.

You can read more on credit card usage in Australia in your credit card debt guide.

Small business loan statistics

Business loan purposes

Now let's look specifically at lending to small businesses.

According to Money.com.au data, the average small business loan amount requested is $94,845.

Financing a business vehicle is the most common loan purpose (41%), followed by requests for businesses looking to access finance for day-to-day capital (29%). Loans for business equipment make up 10% of all requests received.

Average loan amount for different business purposes

Loan purposeAverage loan amount

$261,944

$181,434

$85,608

$75,552

$58,706

$55,250

Other

$112,047

According to research from business lender, Prospa, one in four small business owners intend to borrow for their next phase of growth.

And despite the economic challenges facing Australia, small businesses overall appear optimistic about their growth prospects in 2023, with 81% anticipating growth in the next 12 months.

Which businesses look best-placed to grow?

"Industries such as health and hair and beauty continue to perform well, as do businesses that have a mix of customers coming to them via an online store," Prospa's Head of Enterprise & Platforms, Joseph Lim, said.

"We’ve also seen some slight geographical trends, with manufacturing in Queensland and wholesale retail in the Northern Territory and South Australia growing quickly," Lim added.

Sean Callery Editor Money.com.au

Written by

Sean Callery

Sean Callery is the Editor of Money.com.au. He has over 15 years of international experience. He is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821) and is compliant to provide general advice in Tier 1 General Insurance (RG 146) products.

Shaun McGowan Money.com.au founder

Reviewed by

Shaun McGowan

Shaun McGowan is the founder of Money.com.au. He's determined to help people and businesses pay as little as possible for financial products, through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.

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