Services Sector Fact Sheet 

KEY POINTS

• A detailed publication covering performance and structural change within the services sector is now available.
• In 2008–09, services accounted for 64 per cent of GDP (around 77 per cent of total industry value added). Over the last 20 years services sector value added increased at an average annual rate of 3.5 per cent. The largest contributions to production in 2008–09 came from property & business services (11.6 per cent), finance & insurance (7.4 per cent) and construction (7.2 per cent).
• Services industries accounted for 85 per cent of the two million Australian businesses operating as at June 2007 (the latest period for which data is available). During 2006–07, a net of 48,000 additional businesses entered the services sector—an increase of 2.9 per cent. Three quarters of these were entrants to the property & business services, construction and finance & insurance industries.
• The services sector is Australia’s biggest employer, employing more than 9 million persons at the end of 2008–09 financial year. This is around 86 per cent of the Australian workforce. The biggest employer within the services sector is healthcare & social assistance (13.2 per cent of total employment), followed by retail trade (10.8 per cent of total employment), and construction (9.1 per cent of total employment).
• Services exports totalled $54.0 billion in 2008–09—an increase of 5.8 per cent on the previous year. The largest component of services exports is travel services, which contributed $31.0 billion.
• In 2007-08, 39 per cent of all surveyed businesses in the service sector were innovating. The largest proportion of innovating businesses was in the wholesale trade industry (51 per cent), followed by retail trade (51 per cent) and information media & telecommunications (45 per cent).
  

FACTS AND FIGURES

Definition and composition

The services sector is the broad description for a group of industries many of which are covered by other portfolios and at other levels of government. Most statistical surveys split services into the following sub-sectors, in accordance with the ANZSIC codes for 1993: electricity, gas & water supply, construction, wholesale trade, retail trade, accommodation, cafes & restaurants, transport & storage, communication services, finance & insurance, property & business services, government administration & defence, education, health & community services, cultural & recreational services and personal & other services.

New ANSZIC codes were developed in 2006, which will replace the 1993 codes over the coming year. The new ANZSIC code will break down services as follows: Electricity, gas, water and waste Services, construction, wholesale trade, retail trade, accommodation & food services, transport, postal & warehousing, information media and telecommunications, finance & insurance, rental, hiring & real estate, professional, scientific & technical, administrative & support services, public administration & safety, education & training, health care & social assistance, arts & recreation services, and other services.

Economic performance

In 2008–09, services industries accounted for $704 billion of gross value added (64 per cent of GDP). Over the last 20 years, services sector value added increased at an average annual rate of 3.5 per cent. The largest contributions to economic production in 2008–09 came from property & business services (11.6 per cent), finance & insurance (7.4 per cent) and construction 7.2 per cent). See Attachment A for more detail.

Size and growth

Services industries accounted for 83 per cent of the 1,963,907 Australian businesses operating as at June 2007. The property and business services industry had the largest number of businesses (492,453), followed by construction (308,405) and retail trade (217,684). During 2006–07, a net of 48,000 additional businesses entered the services sector—an increase of
2.9 per cent. Three quarters of these were entrants to the property and business services, construction and finance and insurance industries (see Attachment A for more detail).

Employment

The services sector employed 9.2 million persons as at June 2009. This is around 86 per cent of the Australian workforce. The biggest employer within the services sector is healthcare & social assistance (13.2 per cent of total employment), followed by retail trade (10.8 per cent of total employment), and construction (9.1 per cent of total employment).

Exports and imports

Services exports totalled $54.0 billion in nominal terms in 2008–09—up by 5.8 per cent on the previous year. The largest components of services exports were travel services, which contributed $31.0 billion and transportation services, which contributed $8.1 billion.

Innovation

Innovation is the development, introduction or implementation of new or significantly improved products, marketing, operational processes, and organisational/managerial processes. In 2007-08, 39 per cent of all surveyed businesses in the service sector were innovating. The largest proportion of innovating businesses was in the wholesale trade industry (51 per cent), followed by retail trade (51 per cent) and information media & telecommunications (45 per cent).

ATTACHMENT A:

Table 1: Services sector composition and economic performance, 2008-09

Source: ABS. (a) during financial year 2008-09; (b) as at June 2007.