Services Sector Fact Sheet 

TALKING POINTS

• In 2007–08, services accounted for more than 65 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 3.9 per cent. The largest contributions to economic production in 2007–08 came from property and business services (11.8 per cent), finance and insurance (7.6 per cent) and construction (6.8 per cent).
• Services industries accounted for 84 per cent of the two million Australian businesses operating as at June 2007. 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.
• The services sector accounts for the biggest share of employment in the economy, employing more than 9.2 million persons as at February 2009. This is nearly 86 per cent of the Australian workforce. The biggest employer within both the services sector and in the Australian economy is retail trade (11.3 per cent of total employment), followed by health care and social assistance services (10.7 per cent of total employment), and construction (9.1 per cent of total employment).
• Services exports totalled $51.3 billion in 2007–08, which is an increase of 11.0 per cent on the level of 2006–07. Tourism-related exports totalled $32.5 billion or 63.4 per cent of total services exports in 2007–08.
• In 2006–07, the largest proportion of innovating businesses was in the information, media and telecommunication industry (46.2 per cent), followed by wholesale trade (44 per cent) and financial and insurance services (42.3 per cent).

BACKGROUND 

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. Based on the ANZSIC 1993 classification standard the services sector is composed of the following industries: 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. Data released after January 2009 adopts the new ANZSIC 2006 classification standard.

Economic performance

In 2007–08, services industries accounted for $676 508 million of gross value added (65.2 per cent of GDP). Over the last 20 years, services sector value added increased at an average annual rate of 3.9 per cent. The largest contributions to economic production in 2006–07 came from property and business services (11.8 per cent), finance and insurance (7.6 per cent) and construction (6.8 per cent). See Attachment A for more detail.

Size and growth

As at June 2007, services industries accounted for 84 per cent of the 2,011,770 Australian businesses operating. The property and business services industry had the largest number of businesses (507,508), followed by construction (322,404) and retail trade (219,308). 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 more than 9.2 million persons as at February 2009. This is nearly 86 per cent of the Australian workforce. The biggest employer within both the services sector and in the Australian economy is retail trade (11.3 per cent of total employment), followed by health care and social assistance services (10.7 per cent of total employment), and construction (9.1 per cent of total employment). Other important services industries contributing to total employment are education and training (7.4 per cent share), professional, scientific and technical services (7.1 per cent share), and accommodation and food services (6.5 per cent share). This data conforms to the new ANZSIC 2006 classification standard.

Exports and imports

Services exports [1]  in nominal terms totalled $51.3 billion in 2007–08, which is an increase of 11.0 per cent on the level of 2006–07. The largest contributions to services exports were made by travel services, which accounted for $28.4 billion. Transportation services contributed $9.4 billion. Tourism-related exports—which are the sum of total travel services and a subset of transportation services—totalled $32.5 billion or 63.4 per cent of total services exports in 2007–08 [2].

Innovation

Innovation is the development, introduction or implementation of (1) new or significantly improved products, (2) marketing, (3) operational processes, and (4) organisational/ managerial processes. In 2006–07, the largest proportion of innovating businesses was in the information, media and telecommunication industry (46.2 per cent), followed by wholesale trade (44 per cent) and financial & insurance services (42.3 per cent). The smallest proportion of innovating firms (23.0 per cent) was recorded in the construction industry [3]. 

ATTACHMENT A

 TABLE: Services sector composition 2006-07 and economic performance 2007-08   

References