Transition Rates - Businesses in Continued Existence
Only a few small firms graduate into larger size brackets each year.
The following series of graphs illustrate the transition of enterprises from their initial size in 1997 through to 2003. For example, the first graph shows the transition in size of all firms that had no employed FTEs in 1997, giving the proportion that then fell into each of the eight size categories in the years 1998-2003. Only enterprises still operating in each year are included in the statistics.
For the transition rates of firms with 20 or more FTEs, see Appendix 3 at the back of this report.
Of those employing 0 FTEs in 1997, only a small proportion graduated into larger size brackets, with 90.8 percent of these firms still employing 0 FTEs in 2000, and 89.5 percent by 2003. Just under 9 percent were employing 1-5 FTEs, and just over 1 percent were employing 6-19 FTEs by 2003.
Figure 16: Transition Rates - Enterprises with 0 FTEs in 1997
→ Full size version of Figure 16 [38KB GIF file]
Of those employing 1-5 FTEs in 1997, 88.4 percent were still employing 1-5 FTEs by 2003.
Figure 17: Transition Rates - Enterprises with 1-5 FTEs in 1997
→ Full size version of Figure 17 [36KB GIF file]
Firms with 6-9 FTEs are the least likely to remain the same size.
Of all enterprises with 6-9 FTEs in 1997, 51.0 percent remained in the same size bracket through to 2000, while this had decreased to 42.1 percent by 2003. Of all size groups, those employing 6-9 FTEs in 1997 were least likely to remain the same size through to 2003, suggesting that this size bracket may be a transitional state for firms. Over the period from 1997 to 2003, 24.5 percent of firms expanded to employ greater than 9 FTEs and 33.4 percent contracted to employ between 0 and 5 FTEs.
Figure 18: Transition Rates - Enterprises with 6-9 FTEs in 1997
→ Full size version of Figure 18 [36KB GIF file]
50.8% of firms with 10-19 FTEs remained the same size.
By 2003, of firms employing between 10 and 19 FTEs in 1997, 50.8 percent remained the same size, 30.0 percent contracted and 19.2 percent expanded.
Figure 19: Transition Rates - Enterprises with 10-19 FTEs in 1997
→ Full size version of Figure 19 [39KB GIF file]
The following table gives the proportion of those firms surviving from 1995 to 2002 that expanded, remained the same size, or contracted over the period.13
Table 4: Transition of Firms, 1997-2003| FTE size group in 1997 | Change |
| Smaller in 2003 | No change in 2003 | Larger in 2003 |
| 0 | | 89% | 11% |
| 1-5 | 24% | 51% | 25% |
| 6-9 | 48% | 8% | 44% |
| 10-19 | 50% | 4% | 46% |
| 20-49 | 51% | 2% | 47% |
| 50-99 | 51% | 1% | 48% |
| 100-499 | 52% | 0% | 48% |
| 500+ | 53% | 0% | 44% |
Back to Top