Annual Enterprise Survey 2002 financial year

Annual Enterprise Survey 2002 financial year (provisional)

The Annual Enterprise Survey is New Zealand's most comprehensive source of financial statistics. This release contains summary tables and examples of results for the 2001/02 financial year. A full set of published tables is available on Statistics New Zealand's website.

Customised tables at a more disaggregated level are available on request.

Total sales of goods and services across all industries increased $20,425 million or 6.8 percent in the 2001/02 financial year.

Total purchases and other operating l expenses increased $11,942 million or 5.3 percent in the 2001/02 financial year.

Commentary ...

Introduction to the Annual Enterprise Survey

The Annual Enterprise Survey (AES) is New Zealand's most comprehensive source of financial statistics and provides annual financial performance and financial position information about industry groups operating within New Zealand. The industries covered in the survey contribute approximately 90 percent of New Zealand's gross domestic product. Industries excluded are residential property operators, religious organisations and private households employing staff.

Balance dates vary between industries and between units in the same industry. The 2001/02 AES results include financial data for organisations which have an end of financial year balance date of between 1 October 2001 and 30 September 2002, although the majority of organisations have a balance date of 31 March 2002.

Sales of goods and services for the industries surveyed increased by 6.8 percent in 2001/02, down from a 10.0 percent increase in 2000/01. Purchases and other operating expenses increased by 5.3 percent.

Economic factors that occurred during the survey period

The economy, as recorded by gross domestic product in constant prices, grew 3.4 percent for the ƒ{ March 2002 year, up on the 2.7 percent growth recorded in the March 2001 year. Consumer spending increased by 2.8 percent for the March 2002 year, also up on the 2.2 percent recorded in the March 2001 year.

The Gross Domestic Product Implicit Price Deflator increased by 2.0 percent in the March 2002 year, which was less than the 2.5 percent increase in the March 2001 year.

According to the trade weighted index (TWI), the value of the New Zealand dollar was down by 0.5 percent in the year to March 2002 on the previous March year, but increased by 3.4 percent in the year to June 2002 due to significant rises in the June 2002 quarter. A higher New Zealand dollar has a downward influence on export prices and reduces the cost of imports.

Total merchandise export values increased by 7.1 percent in the year to March 2002. Total merchandise imports increased in value by 1.2 percent in the year to March 2002.

The final 2002 season milk solids payout price to dairy farmers was $5.33 per kg compared with $5.00 for 2001. Fonterra began warning shareholders in February 2002 that the payout price for 2003 would be lower because of falling commodity prices and a strengthened New Zealand dollar.

The final price for 2003 was $3.63.

The annual base lending rate for the March 2002 year was 9.3 percent, down from 10.4 percent for the March 2001 year.

Employment levels increased 2.8 percent over the March 2002 year, following a 1.9 percent rise over the March 2001 year, according to the Household Labour Force Survey.

The estimated resident population of New Zealand for the year ended 31 March 2002 was 3,929,100, up 1.4 percent on the March 2001 year.

Terrorist attacks in New York on September 11, 2001 stopped international air travel for days and caused travel hesitancy, particularly by US citizens, for months afterwards. The number of short-term visitor arrivals to New Zealand dipped in the three months to December 2001, down 4.4 percent on the previous year, but recovered from January 2002. The total number of short-term visitors reached 2.0 million for the March 2002 year, up 5.8 percent on the March 2001 year.

The Accommodation Survey shows that guest nights for the year ended March 2002 were up 6.6 percent on the year ended March 2001.

The Consumers Price Index (CPI) sub-index for petrol decreased by 5.3 percent in the year to March 2002, down on the 21.2 percent growth recorded in the March 2001 year.

The Commercial Electricity Price Index was 6.2 percent higher in the year to March 2002, following a 3.2 percent fall in the March 2001 year. This was due to low hydro lakes and a decrease in hydro electricity generation from June 2001.

The actual value of all building work put in place for the year ended March 2002 increased by 6.7 percent from the year ended March 2001.

Operating surplus increased by 41.7 percent to $42,409 million in 2001/02 for all industries. Operating surplus includes non-operating transactions and extraordinary items such as losses on revaluations of fixed assets. Extraordinary items are revenues or expenses which are not expected to occur frequently, are distinct from the ordinary operations of the entity and are outside the control of the owners.

Agriculture, forestry and fishing

Total income for the agriculture, forestry and fishing division increased by 13.1 percent to $25,907 million in 2001/02. Income from farming activity, which includes dairy; livestock; horticulture; and other farming, increased by 14.9 percent and accounted for 76 percent of total income for the division, while income from forestry and logging, fishing, services to agriculture, and hunting and trapping was 7.9 percent up on the previous year and contributed the remaining 24 percent of total income. Sales increased by 14.3 percent due to good prices in offshore markets and an export favourable exchange rate for the year to March 2002.

Total expenditure for the division increased by 11.4 percent to $22,041 million, including a 13.8 percent increase in salaries and wages, which had also increased by 13.3 percent in 2000/01.

Operating surplus for the division increased by 24.3 percent to $3,963 million. The largest increase in operating surplus came from farming, up 15.2 percent to $3,523 million, with dairy accounting for almost 57 percent of this value. Forestry, fishing, services to agriculture, and hunting and trapping accounted for the remaining 10 percent of operating surplus.

Forestry and logging total income increased from $3,135 million to $3,278 million, an increase of 4.6 percent. Contributing to this rise was an increase in the value of wood exports, rising by 3.8 percent for the year ended March 2002.

Mining

Coal mining; services to mining; other mining and quarrying; oil and gas extraction; and oil and gas exploration are included in the mining division. Total income for the mining division was $2,770 million, up 9.4 percent from 2000/01. Total expenditure fell by 28.2 percent to $2,158 million.

Oil and gas exploration and extraction accounts for 62.5 percent of the mining industry's total income.

The major contributor was oil and gas extraction, for which total income rose by 6.8 percent. A key reason for this was an increase in gas production. According to the New Zealand Energy Statistics, gas production for the year ended June 2002 increased by 3.1 percent. This resulted from an increase in thermally generated electricity (gas is the main means of generation for thermal electricity) in the September and December 2001 quarters - a flow on effect of the power crisis in the winter of 2001.

Manufacturing

Total income for the manufacturing division increased by 5.9 percent to $66,636 million in 2001/02, caused largely by a 4.2 percent rise in sales to $64,745 million, and a 218.4 percent rise in non-operating income to $1,532 million. Total expenditure reached $61,010 million, up 3.3 percent on 2000/01. Salaries and wages paid in manufacturing increased by 3.0 percent.

The food, beverage and tobacco manufacturing industry contributed 40.3 percent of total manufacturing income in 2001/02. Income for the industry increased by 3.0 percent in 2001/02 to reach $26,854 million. This industry had 18.0 percent income growth in 2000/01 due to the 22.6 percent increase in total merchandise exports in the year to June 2001. Total merchandise exports in the year to June 2002 were up by only 1.0 percent on the previous June year.

Basic metal, structural, sheet and fabricated metal product manufacturing was the next biggest contributor to the manufacturing division, accounting for 9.7 percent of the manufacturing division. Its total income rose by 10.2 percent to $6,489 million. Following this were increases in total income for machinery and equipment manufacturing, rising by 6.7 percent to $5,841 million. Petroleum, coal and basic chemical manufacturing (including fertiliser) was up 6.6 percent to $4,095 million. This was due to the buoyant agricultural sector, which led to increased sales of agricultural machinery and equipment and a greater demand for farm inputs such as fertiliser.

Electricity, gas and water supply

This division consists of electricity generation and supply, gas supply, and water supply. Total income for this division increased by 7.9 percent to $10,111 million for 2001/02. Total expenditure increased by 5.2 percent to $8,003 million. Operating surplus before income tax increased by 19.8 percent to $2,109 million.

The dry winter of 2001 continued to influence power prices early in the 2001/02 financial year. The increase in 2001/02 income was smaller than 2000/01 as the power crisis abated and warmer winter conditions prevailed in 2002.

Construction

Construction includes residential building construction; non-residential building construction; non-building construction; and construction trade services. Total income for the construction division increased slightly by 0.6 percent to $16,383 million, while total expenditure fell by 0.8 percent to $15,041 million. Operating surplus before income tax rose by 18.7 percent to $1,943 million.

The residential building construction industry experienced the largest increase in income, rising 11.7 percent to $3,449 million. This was influenced by a lower mortgage lending rate and a net inflow of permanent and long-term arrivals of 25,600 for the year to March 2002 (the year to March 2001 recorded a net outflow of 12,600).

The construction trade services industry, which generally carries out site preparation, building structure, installation, building completion and other construction services contributed the largest income to the construction industry, accounting for 42.2 percent of total income. Construction trade services experienced an increase in income of 1.7 percent to $6,919 million.

Wholesale trade

Wholesale trade includes wholesaling of food, drink and tobacco; personal and household goods; machinery and equipment; petroleum product; unprocessed primary products; builders supplies and motor vehicles.

Total wholesale trade income increased by 6.0 percent to $72,867 million in 2001/02. Food, drink and tobacco wholesaling, which made up 30 percent of wholesale trade income, showed very modest growth of 0.5 percent. Wholesaling of unprocessed primary products such as farm produce, wool and cereal accounted for 8.0 percent of wholesale trade income, and increased by 14.1 percent.

Another wholesale industry that had significant growth in 2001/02 was motor vehicle wholesaling, which saw 8.5 percent higher total income than in 2000/01. The value of imports of vehicles, parts and accessories in the March 2002 year increased by 19.9 percent over the March 2001 year. There was a surge of imported motor vehicles in early 2002 to beat the 1 April deadline of tighter vehicle impact legislation. This limited the importation of used cars from Japan to newer, safer vehicles.

Total expenditure for the division in 2001/02 was $71,425 million, up 5.8 percent on 2000/01.

Increases were recorded for purchases and operating expenses combined (6.3 percent), and salaries and wages (6.2 percent). The wholesale trade division reported an 18.1 percent higher operating surplus in 2001/02 of $1,923 million.

Retail trade

The retail trade industry includes supermarket and grocery stores; specialised food retailing; department stores; furniture, houseware, appliance and recreational goods retailing; other personal and household goods retailing; and motor vehicle retailing and services.

Total income for the retail division increased by 8.3 percent to $41,177 million in 2001/02. Sales of goods not further processed were the main contributor to the industry's total income, accounting for 87.3 percent of total income. They rose by 6.1 percent to $35,946 million. Total expenditure for the retail division was up 6.9 percent to $39,611 million. This resulted in an increase in operating surplus before income tax of 48.7 percent, from $1,521 million to $2,262 million.

The increase in total income was influenced by several retailing activities. Total income for food retailing (consisting of supermarkets, grocery stores and specialised food retailing) grew by 13 percent to $12,986 million. Contributing to this increase was a rise in the Food Price Index of 6.1 percent for the year ended March 2002. Furniture, houseware, appliance and recreational goods retailing increased by 12.5 percent to $6,000 million. Rising farm incomes from the buoyant rural sector during 2001/02, growth in the residential building sector, and a growing domestic economy have led to increased sales of furniture, houseware and appliances.

Motor vehicle retailing and services total income increased by a smaller 3.6 percent, but accounted for 31 percent of the retail trade industry's total income. Sales of other goods and services were the main contributor to the increase in income for the motor vehicle retailing and services industry, increasing by 15.1 percent to $2,049 million. Motor vehicle sales were influenced by new legislation brought in on April 1 2002 requiring higher safety standards for imported motor vehicles.

The margin on sales of goods for resale was 23.1 percent in 2001/02, a small decrease to the 23.4 percent margin in the 2000/01 year. Closing stocks as a percentage of sales were 10.4 percent, matching the 2000/01 year figure of 10.4 percent.

Accommodation, cafes and restaurants

Total income for the accommodation, cafes and restaurants division was $5,677 million in 2001/02, an increase of 6.0 percent on 2000/01. Sales increased by 6.8 percent to $5,588 million. Total expenditure has increased at a similar rate to income, rising 5.0 percent to $5,426 million. Operating surplus for accommodation, cafes and restaurants has reached $382 million, an increase of 32.4 percent on the previous year's figure of $289 million.

Business Demography data for 2002 shows that the number of enterprises in this industry increased by 444 to reach 9,807. Contributing to increases in activity were events such as the pre-America's Cup regatta in February 2002.

Pubs, taverns, bars, clubs, cafes and restaurants contribute 68.4 percent to the division's total income.

These have shown a 7.6 percent increase in total income to reach $3,883 million in 2001/02. The volume of alcoholic beverage available for consumption rose 1.8 percent in the March 2002 year to 420.1 million litres. Restaurant meals and ready-to-eat food prices rose 4.5 percent in the same period.

Accommodation contributes the remaining 31.6 percent to this division, with total income of $1,795 million. This is an increase of 2.6 percent on 2000/01. The number of full-time equivalent employees rose by 2.3 percent. Short-term visitor arrivals and guest nights, both mentioned in the economic factors, were up in 2001/02 by 5.8 percent and 6.6 percent respectively, when compared with 2000/01.

Transport and communication

Two divisions, transport and communication, have been combined to protect the confidentiality of respondent data in these industries. The combined division includes telecommunications; postal and courier services; road freight and road passenger transport; air, water and rail transport; and storage and other transport services.

Total income for transport and communication increased by 1.0 percent to $19,639 million in 2001/2, following an increase of 11.0 percent in the 2000/01 year. Purchases and other operating expenses increased by 4.7 percent after a rise of 16.1 percent in 2000/01. Fuel costs, which are an important input into the transport industry, were more stable in 2002. Operating surplus before income tax improved in 2001/02 and was $1,411 million compared with $977 million in 2000/01.

The sudden drop in short-term international visitor arrivals after the events of September 11, 2001 quickly rebounded and were up 3.5 percent for the June 2002 year, when compared with an 11.3 percent increase in 2001. Within New Zealand, the air and rail transport industries were subject to restructuring.

Finance and insurance

Total income for finance and insurance in 2001/02 was up by 7.4 percent to $40,101 million, while total expenditure went down by 3.7 percent to $28,952 million. Interest and dividends received, which contributes over 60 percent of total income earned in this division, increased by 3.6 percent to $24,833 million. Interest paid grew by 6.5 percent to $14,837 million. Sales contribute about one quarter of total income and reached $9,691 million in 2001/02, up 2.6 percent.

Non-operating income has increased to $5,570 million. In contrast, non-operating expenses have decreased. These movements have contributed to the $3,921 million increase in operating surplus for the 2001/02 period.

The banking and financial asset investors industry accounts for 80 percent of total income for this division and over 95 percent of interest and dividends received. Interest and dividend income grew by 5.1 percent to $23,622 million. These industries also account for much of the movements in non-operating income and non-operating expenses.

Total income fell by 7.5 percent to $5,285 million in the insurance industry, which includes life, health and general insurance. This was influenced by companies adopting FRS-34 and reporting both financial performance and financial position items differently, leading to lower values than in 2000/01.

More companies have adopted FRS-34 in 2001/02 than in previous years. Insurance contributes $4,453 million of sales, over 45 percent of sales for the division.

Total income for the services to finance and insurance industry was $2,626 million, up 3.7 percent on 2000/01, and total expenses were down 6.0 percent to $2,189 million.

Property and business services

This is a diverse division covering real estate (including commercial property); non-financial asset investors; machinery and equipment hiring; scientific research; technical services (such as surveying and architecture); computer; legal and accounting services; and other business services.

Total income for property and business services increased by 13.1 percent to $36,932 million. The 2000/01 figure of $32,669 million was a 9.1 percent increase from 1999/00. Real estate has shown strong growth in sales in the 2001/02 period to reach total sales of $11,102 million, an increase of 17.5 percent. This was influenced by the drop in mortgage lending rates and the net inflow of permanent and long-term migrants. This subdivision contributes 31.5 percent to the total division income. Total expenditure reached $31,097 million in 2001/02, an increase of 8.3 percent.

Operating surplus before income tax was $7,004 million, an increase of 42.2 percent. Significant growth in total income for the year, combined with a more moderate growth in expenditure, led to this movement.

Government administration and defence

Government administration and defence consists of central government administration; local government administration; defence; justice; police services; corrective services; and fire brigade services. Total income for the division decreased by 11.1 percent to $16,988 million. Total expenditure also showed a similar level of decline, falling by 13.7 percent to $15,901 million. This led to a rise in operating surplus before income tax of 60 percent, from $679 million to $1,086 million for the 2001/02 year.

Central government administration was the main contributor to the fall in total income for this industry, accounting for 54.5 percent of the industry's total income. It fell by 21.2 percent to $9,262 million in 2001/02. This was due to a change in how the Government funds the provision of health and social services. These are now recorded directly in other industries such as health.

Total expenditure for central government administration also declined at a similar level to income with a decrease of 23.8 percent. However, several expenditure items for central government administration recorded notable increases. For example, salaries and wages paid to employees increased by 8.8 percent, up from $1,483 million to $1,613 million in 2001/02, while purchases and other operating expenses increased by 8.7 percent from $4,605 million to $5,005 million in 2001/02. These increases arose through greater expenditure by government organisations, mainly in the health, roading and welfare areas.

Total expenditure for public order and safety services rose by $84 million (5.1 percent). This was mainly due to a rise in staffing levels, and the resulting increase in expenditure on salary and wages for these services.

Local government contributed $4,548 million or 26.8 percent of the industry's total income. The total income for local government rose by 8.5 percent, largely due to an increase in sales of goods and services through rates.

Education

The education division includes pre-school education; primary education and special schools; secondary education; post school education; and other education. Total income for the education division rose by 6.7 percent to $7,324 million in 2001/02, up from $6,862 million in 2000/01. This resulted from an increase in sales of goods and services, up 18.1 percent from $1,938 million to $2,289 million in 2001/02, and an increase in Government funding. Government funding rose by 2.5 percent to $4,828 million for the 2001/02 period.

Post school education accounts for the largest proportion of the education division's income at 33.2 percent. Total income for post school education rose by 9.1 percent to $2,433 million in 2001/02. This was due to an increase in the sales of goods and services of 12.9 percent, up from $1,003 million to $1,132 million, mainly through a rise in student fees and an increase in income for research contracts.

The rise in income was also influenced by an increase in government funding of 6.9 percent to $1,250 million. In general, participation in tertiary education has increased over the last few years. Ministry of Social Development figures showed that 10.5 percent of the population aged 15 and over were enrolled in formal tertiary education (public and private) in July 2002, an increase from 8.5 percent recorded in July 1997.

Primary education and secondary education also experienced increases in total income, but to a lesser extent, with increases of 1.8 percent and 3.3 percent respectively. Both increases were due to a rise in sales of goods and services resulting from increases in activity fees charged to parents.

Primary education accounts for 27.6 percent of the division's total income and secondary education 22.6 percent.

Total income for other education rose by 16.8 percent with this industry contributing to a smaller 13.0 percent of total income for the industry. This was due mainly to an increase in the sales of goods and services by 27.4 percent, up from $383 million in 2000/01 to $488 million in 2001/02. An increase in charges for student fees and an increase in student numbers, especially international students, also led to the increase in sales for other education.

Total expenditure for the education division increased by 4.9 percent to $6,994 million in 2001/02, up from $6,666 million. This resulted from an increase in salary and wages paid to employees of 1.8 percent to $4,429 million, through growth in teacher numbers. Purchases and other operating expenses also increased, rising by 13.9 percent to $2,123 million.

Health and community services

The health and community services division includes hospitals and nursing homes; health and dental services; veterinary services; and community services such as childcare and accommodation for the aged.

Total income for the division increased by 4.7 percent to $9,941 million in 2001/02. The government funding, grants and subsidies item was the main component influencing this movement, with a 6.5 percent increase to $6,322 million. Additional funding to health services was announced in the 2001 Budget speech, with the major recipients being elective, hospital and disability support services.

Total expenditure was $9,292 million, increasing slightly more than income at 6.1 percent. Salaries and wages are the most significant contributor to expenditure, and at $4,550 million in 2001/02 have shown an increase of 7.1 percent on 2000/01 figures. Business Demography data for the 2001/02 period shows a 5.1 percent increase in full-time equivalent employees in the health and community services division from 2000/01.

Cultural and recreational services

Total income for cultural and recreational services for 2001/02 was $6,477 million, up 11.1 percent on 2000/01. Sport and recreation contributed 56 percent of the division's total income; motion picture, radio and television services 32 percent; and libraries, museums and the arts 12 percent.

The sport and recreation industry includes businesses involved in racing, lotteries, casinos, sports grounds and other recreation services. Total income for this industry increased by 15.0 percent to $3,640 million. Contributing to this increase was greater expenditure on gambling. Department of Internal Affairs figures showed a rise of 14.2 percent in terms of total expenditure on gambling between 2001 and 2002. Total expenditure for the sport and recreation industry grew by 9.9 percent.

This led to increased profitability, with operating surplus of $448 million, up 77.6 percent on 2000/01.

Sport and recreation represents 87 percent of the operating surplus for cultural and recreational services for 2001/02. Operating surplus increased from 9.0 percent of sales in 2000/01 to 13.9 percent of sales in 2001/02.

Motion picture, radio and television services total income was $2,088 million, a 6.1 percent increase on 2000/01. Total income for libraries, museums and the arts grew by 7.0 percent to $749 million.

There was only a 1.2 percent increase in total salaries and wages paid to employees for the cultural and recreational services division, but purchases and other operating expenses increased by 12.4 percent. Total expenditure grew to $6,042 million, an increase of 10.3 percent on 2000/01. Operating surplus before tax increased by 26.3 percent to $513 million.

Personal and other services

The personal and other services division comprises personal household services; interest groups; waste disposal; and sewerage and drainage services.

Total income for 2001/02 increased by 5.6 percent to $3,137 million. This is similar to the 6 percent increase in 2000/01 when total income for the division was $2,970 million. The largest contributor to total income was personal and household services, which makes up 46 percent of the division's total income. This is a very mixed industry encompassing activities from video hiring to funeral services.

Total expenditure for the division showed slightly stronger growth, increasing by 7.9 percent to reach $2,848 million. This has led to a 10.3 percent decline in operating surplus at $361 million in 2001/02, compared with $402 million in 2000/01.

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