The primary purpose of Business Demography is to provide estimates of numbers of enterprises and numbers of persons engaged. This provides valuable information on enterprise life cycles, mortality and churn rates. These data supplement the Structural Business Statistics and also form the basis for weighting and deriving other business statistics.
Scope and Coverage
The data for Business Demography is based on the CSO Central Business Register. The Business Register is a register of all enterprises that are active in the State. There is no lower size limit, but for practical reasons, Business Demography data is based on enterprises that are registered with the Revenue Commissioners.
New businesses are identified by VAT, employer, Corporation Tax or Income Tax registrations. The following sources are to determine if a business is active during the reference year:
Corporation Tax returns
Income Tax returns
The provision of Business Demography data is a requirement under EU legislation. See the Business Demography section on the Eurostat website for more information. The underlying methodology is based on that described in the Eurostat-OECD Manual on Business Demography Statistics.
The first reference year covered is 2006.
NACE Rev 2 Sectors Covered
B - Mining and quarrying
C - Manufacturing
D - Electricity, gas, steam and air conditioning supply
E - Water supply; sewerage, waste management and remediation activities
F - Construction
G - Wholesale and retail trade; repair of motor vehicles and motorcycles
H - Transportation and storage
I - Accommodation and food service activities
J - Information and communication
K* - Financial and insurance activities
L - Real estate activities
M - Professional, scientific and technical activities
N - Administrative and support service activities
*NACE code 64.20 Activities of holding companies is excluded from sector K
NACE Rev 1.1 Sectors Covered in Previous Release
C - Mining and quarrying
D - Manufacturing
E - Electricity, gas and water supply
F - Construction
G - Wholesale and retail; repair of motor vehicles, motorcycles and personal and household goods
H - Hotels and restaurants
I - Transport, storage and communication
K* - Real estate, renting and business activities
*NACE code 74.15 Activities of holding companies is excluded from sector K
Relationship with Previous Release
In 2009, the Business Demography NACE Rev 1.1 release was published, which covered the reference years 2006 and 2007. There are differences in the coverage of this year's release and the previous one, so the releases are not directly comparable. The main differences are:
1) The CSO's Business Register has been expanded to fully cover all enterprises active on Revenue sources in the NACE Rev 2 sectors B - N. The Business Demography NACE Rev 2 release is based on this register, and so the 2010 release has improved coverage over the 2009 one. The 2009 release was based on NACE Rev 1.1 sectors C - K, excluding sector J.
2) The 2010 release uses administrative data to identify the population of active enterprises, while the 2009 release was calibrated to survey population data. The increased use of administrative data in the 2010 release results in better coverage of very small enterprises, which do not show up using survey methods. This means an increase in the number of active enterprises, the number of births, and related variables, in the 2010 release.
In 2010, the first Business Demography NACE Rev 2 release was published. A revision of this data was published in February 2011, with some changes to the method for estimation of real births, deaths and survivals from potential births, deaths and survivals.
Relationship with other Structural Business Statistics releases
Business Demography figures are based purely on administrative data. This results in some differences with survey based Structural Business Statistics releases, like the Census of Industrial Production, Building and Construction Inquiry, and Annual Services Inquiry.
1) Administrative data sources allow better coverage of small enterprises, which do not show up using survey methods.
2) Administrative data counts active Revenue registrations as active enterprises. This generally lines up with the definition of an enterprise in survey areas, but there can be some differences, especially in enterprise groups.
3) Business Demography counts employment data based on P35 employer returns, while other SBS releases measure employment based on survey returns. This is particularly significant for enterprise groups, where the whole group may make one P35 return, which results in all its employees being counted against the overall enterprise group NACE code. Survey based releases may divide this employment across different enterprises, and therefore different NACE codes.
Definition of Variables
Active Enterprises: The population of active enterprises contains all enterprises that were active at some point during the reference year. Enterprises are counted as active if they satisfy at least one of the conditions below:
Pay VAT during the reference year
Have employees during the reference year
File a Corporation Tax return for the reference year
File an Income Tax return for the reference year with turnover of over €50,000
Enterprise Births: An enterprise birth amounts to the creation of a combination of production factors with the restriction that no other enterprises are involved in the event. Births do not include entries into the population due to mergers, break-ups, split-off or restructuring of a set of enterprises. It does not include entries into a sub-population resulting only from a change of activity.
A birth occurs when and enterprise starts from scratch and actually starts activity. An enterprise creation can be considered an enterprise birth if new production factors, in particular new jobs, are created. If a dormant unit is reactivated within two years, this event is not considered a birth1.
The population of enterprise births in 2009 contains all enterprises that started at some stage during the year 2009.
Enterprise Deaths: An enterprise death amounts to the dissolution of a combination of production factors with the restriction that no other enterprises are involved in the event. Deaths do not include exits from the population due to mergers, takeovers, break-ups or restructuring of a set of enterprises. It does not include exits from a sub-population resulting only from a change of activity.
An enterprise is included in the count of deaths only if it is not reactivated within two years2.
The population of enterprise deaths in 2008 contains all enterprises that ceased at some point during the year 2008.
Enterprise Survivals: Estimates are provided for the number of new enterprise births that are still active in the years after their birth, along with the numbers of persons engaged in these enterprises in the year of birth, and in the year in which they survive3.
Enterprise births surviving one year to reference year: is the population of enterprises that commenced activity in the year before the reference year, and are still active in the reference year.
Persons engaged includes employees, proprietors and family members.
Employees are persons who are paid a fixed wage or salary. Persons at work or temporarily absent because of illness, holidays, strike etc. are included. Persons working on a labour-only subcontract basis are excluded4.
Proprietors and family members; included here are those proprietors, partners etc. and members of their families who work regularly in the firm and are not paid a definite wage or salary
Legal Form Definitions:
Enterprise size divisions:
Number of employees and employee size class for an enterprise is determined by the average number of employees for that enterprise over 4 quarters of the reference year.
0 employees No employees at all during the reference year
1-4 employees More than 0, but less than 4.5 employees
5-9 employees At least 4.5, but less than 9.5 employees
10+ employees More than 9.5 employees
1Enterprise Births calculation:
The population of real births in each year was estimated using administrative data as follows:
All Revenue registered enterprises that showed Revenue activity in the reference year, but none in the previous two years, were extracted as the population of potential births. From this, all potential births employing more than 20 people in the reference year were checked, along with a sample of smaller potential births. This checking determined whether the enterprise was a real birth in the reference year, or if it was a takeover or company restructure of an existing enterprise. The checking was carried out using other administrative sources, internet searches, or direct contact with the enterprise.
The results of the checking were that on average, around half of all potential births were not actually genuine new enterprises. For large potential births, employing over 20 people, only the births that were confirmed to be real are included in the final figures. For smaller size births, the percentage of real births found in the checked sample was used to weight the potential births to create an estimate of the number of real births.
2Enterprise Deaths calculation:
All Revenue registered enterprises that showed Revenue activity in the reference year, but not in the following two years, form the population of potential deaths. Two years of data are required to exclude enterprises that are dormant for one year, but recommence activity in the following year. However, preliminary figures are released using just the following year's activity data. These preliminary figures include enterprises that later reactivate and are removed from the final figures.
As for enterprise births, samples of potential deaths are manually checked to eliminate takeovers and changes of administrative numbers that don't result in the real cessation of a business.
The main administrative data sources for reference year t +1 are not available until November of year t +2. Preliminary deaths data for year t is published once this data has been received and processed, late in year t +2. The final deaths data for year t is published in year t +3.
Preliminary deaths data for reference year 2009 will be published by the end of 2011, along with final deaths data for reference year 2008.
3Enterprise Survivals calculation:
The number of employees is calculated on an annualized equivalent basis for the reference year. The total number of weeks worked by an employee over the course of the year is divided by 52 to get the fraction of their full annual employment. So for example, a person who has worked for 52 weeks in the year will contribute 1 to the employment figures, while a person who has worked 26 weeks of the year will contribute 0.5. No distinction is made between full time and part time employment, so an employee who works on a part time basis for a full year is still counted as 1 employee.