Continuation Rates
Continuation rates measure how long enterprises remain in the business demography dataset. These rates are calculated by tracking the business reference numbers for entries of one year in the population of enterprises of subsequent years. Continuation rates are generally lower for smaller enterprises, but should not be taken as measures of the "survivability" of firms.
As discussed earlier, the LBF is able to better identify genuine business start-ups and closures, and so will be able to provide a more accurate picture of businesses' lifespan. Refer to Appendix 2 for experimental results based on the LBF.
Larger firms remain longer in the business demography dataset than SMEs.
Of those enterprises established in 2001, the continuation rates in 2006 were generally higher for larger firms. Enterprises with zero employees were least likely to persist in the business demography dataset (42.2 percent).
Figure 17. Continuation Rates of 2001 Enterprise Entries by EC Size Group
→ Full size version of Figure 17 [23 kB GIF]
Continuation rates for enterprises established in 2001 are analysed by industry sector in Figure 18. Excluding government administration and defence, the industries in 2001 with the highest continuation rates into 2006 were Health and Community Services (60.0 percent), Finance and Insurance (58.9 percent) and Mining (57.1 percent). The lowest continuation rates in the same period were in Accommodation, Cafes and Restaurants (33.1 percent) and Communication Services (34.6 percent).
Figure 18. Continuation Rates of 2001 Enterprise Entries by ANZSIC
→ Full size version of Figure 18 [24 kB GIF]
2003 enterprises show a similar continuation pattern to 2001 enterprises.
The following figures show survival rates by EC category and ANZSIC classification for enterprises established in 2003. Overall, the results show a similar trend by firm size to enterprises that were established in 2001. The continuation rates over 3 years are lower for enterprises that started with 10-19 or 50-99 employees in 2003 than for those that started in the same size groups in 2001. By industry, the continuation rates over 3 years were higher in 2003 for mining and construction, and lower for health and community services and electricity, gas and water supply, than in 2001.
Figure 19. Continuation Rates of 2003 Enterprise Entries by EC Size Group
→ Full size version of Figure 19 [21 kB GIF]
Figure 20. Continuation Rates for 2003 Enterprise Entries by ANZSIC
→ Full size version of Figure 20 [22 kB GIF]
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