Size of the Business Market in Australia

Size of the Business Market in Australia

The "business market" in Australia can be interpreted as the aggregate scale of the private sector economy, encompassing all actively trading businesses. This includes metrics like the number of businesses, total revenue (sales and service income), employment, and contribution to GDP.

Based on the latest data for 2025 (as of June 30, 2025), Australia's business market is robust, dominated by small and medium enterprises (SMEs), which form over 99% of all businesses and drive significant economic activity. The sector reflects a post-pandemic recovery, with modest growth amid inflation and interest rate pressures.

Key highlights:

• Total Number of Businesses: 2,729,648 actively trading businesses, up 2.5% (66,650) from the previous year. Of these, 994,178 are employing businesses (those with paid employees).
• SME Dominance: 97.3% (2,656,469) are small businesses (0-19 employees), 2.5% (67,857) are medium (20-199 employees), and just 0.2% (5,322) are large (200+ employees). SMEs account for ~98% when defined by turnover (<$10 million annually).
• Total Revenue: For FY2023-24 (latest full-year data, with 2024-25 trends similar), private sector sales and service income totalled ~$3.3 trillion across key industries (e.g., mining, construction, retail). SMEs contribute ~$500 billion in economic activity (one-third of GDP).
• Employment: Businesses employ ~12.5 million people (private sector total), with SMEs accounting for ~70% (~8.8 million jobs). Small businesses alone employ over 5.1 million.
• GDP Contribution: The private business sector drives ~80-85% of Australia's ~$2.6 trillion GDP, with SMEs contributing ~33% (~$860 billion).

Geographic Distribution (June 2025)

• New South Wales: 870,000+ businesses (32%; largest absolute growth: +20,040).
• Victoria: ~750,000 (27%; slight decline in some years).
• Queensland: ~550,000 (20%; +13,579; highest inward migration).
• Western Australia: ~280,000 (10%; +4.3% growth rate).
• Urban areas (e.g., Sydney, Melbourne) host ~70% of businesses.

Growth Trends and Projections

• Historical (2020-2025): Businesses grew at ~2-3% CAGR, with entries (437,150 in 2024-25) outpacing exits (370,500; 13.6% exit rate). Revenue rose ~4-5% annually, driven by construction (+10%) and retail (+5.5%), but mining saw earnings falls (-$42.4B). Survival rate: 76.5% past first year.
• 2025-2030 Outlook: 1.5-2.0% annual business growth to ~3 million by 2030; revenue CAGR ~4%, reaching ~$4T. Drivers: Rate cuts boosting confidence, SME digital adoption. Challenges: Cost-of-living pressures, supply chain issues (41% of businesses affected).
• Entry/Exit Dynamics: 16.4% entry rate; construction led new starts (76,414). Partnerships declined (-4.3%).

Data Sources and Methodology

Primarily from Australian Bureau of Statistics (ABS) Counts of Australian Businesses (August 2025 release) and Australian Industry (2023-24), cross-referenced with ASBFEO, IBISWorld, and secondary analyses (e.g., Money.com.au for SME breakdowns). Revenue estimates aggregate ABS datacubes; GDP contributions scaled from historical proportions (e.g., 33% SME share). For subsector details (e.g., by state), consult ABS tools. If you meant a specific segment (e.g., B2B market), let me know!