Entry to and Exit from Business Demographic Statistics
SMEs account for the majority of all entries and exits.
Entry and exit statistics relate to the movement of firms into and out of the Statistics New Zealand business demography dataset.
The analysis of business demography is limited to economically significant enterprises (see Appendix 1), which means that very small businesses are not captured.
Entry and exit statistics are not start-up and failure statistics. It is erroneous to interpret them as such. Data on the entry and exit of firms include administrative changes such as restructuring and changes of ownership, as well as genuine business start-ups and closures. Statistics New Zealand has procedures in place to monitor changes of ownership, geographic transfers, and temporary closures of enterprises. However, administrative changes cannot always be identified as such.
Current work at Statistics New Zealand to emulate international best practice will improve statistics on new businesses, business closures, and continuation rates. The Longitudinal Business Frame (LBF) attempts to identify entries and exits of enterprises due to administrative churn (such as company restructuring and changes of ownership), so that genuine business start-ups and closures/failures can be better identified. An experimental series was released in May 2006, and its key results are included in Appendix 2 of this report. Once Statistics New Zealand publishes an official series based on the LBF, it will be incorporated into future editions of Structure & Dynamics.
Firms with 5 or fewer employees dominate entries and exits.
In line with previous years, enterprise entries and exits are dominated by firms employing 5 or fewer employees. They accounted for 94.8 percent of entries and 94.0 percent of exits at February 2006.
Figure 14. Enterprise Entries, at February 2006
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Figure 15. Enterprise Exits, at February 2006
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Enterprise entries outnumbered exits.
There were 11,751 net entries into the Business Demography dataset at February 2006, 1,704 more than in 2005.
Figure 16. Enterprise Entries and Exits, February 1998-2006
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