The largest enterprises are dominant when it comes to net turnover and number of employees in the total business sector, but there are some differences between industry sections.

Manufacturing, (NACE 10-33), is the largest industry section based on number of employees. It follows the structure of the total business sector and is dominated by the largest enterprises. Of all employees in the manufacturing industries, 63.1 percent, or about 347 000 persons, are employed by a large enterprise. The largest enterprises contributed with SEK 2 595 billion to net turnover, which is 78.5 percent of the manufacturing industries.

In contrast to the manufacturing industries, the industry section for Agriculture, forestry and fishing (NACE 01-03), is dominated by micro enterprises, who contributes 70 percent of net turnover, and 58,9 percent of all employees. It is the enterprises in the smaller size classes with 10-19, and 20-49 employees, that contribute the most percentage to the increase of net turnover within the industries, with 15.4 and 21.6 percent respectively.

The industry section for Arts, entertainment and recreation (NACE 90-93) are also dominated by micro enterprises although the largest enterprises almost is at the same size. Respectively, they have 29 and 26.2 percent of number of employees in the industry. Number of employees decreased by 3 percent for the micro enterprises while the largest enterprises increased by 4 percent. Within the industries for Accommodation (NACE 55) and Food and beverage service activities (NACE 56), the distribution of both net turnover and number of employees is relatively equal between the largest and the micro enterprises. However, there has been a marginal decline of both number of employees and net turnover for the micro enterprises. The largest enterprises on the other hand, has had a large increase of both net turnover and number of employees in 2023, of 17.1 and 15.6 percent respectively.

Key ratios

Several key ratios can be calculated based on the enterprise unit in Structural business statistics.

The net margin in the business sector was 7.2 percent in 2023, which is a small decrease from 7.7 percent in 2022. Return on total capital amounted to 8.9 percent, an increase of 1 percentage compared to 2022. Working capital decreased by 2.7 percentages to 12.5 percent in 2023.

Broken down by industries, it is only the enterprises within NACE 72, Scientific activities, and NACE 68, Real estate activities, that displays a negative net margin. NACE 72 is a cost-intensive industry where a high working capital indicates good coverage for current liabilities and thus room for expansion despite the negative net margin and low return on total capital. For enterprises within real estate, net margin has decreased significantly compared to 2022. This may be due to a high loan-to-value ratio, which has resulted in high interest costs, which is also reflected in a reduced, but still high, working capital.

The opposite is true for NACE 21, Pharmaceuticals, where net margin increased from 6.4 percent in 2022 to 27 percent in 2023. Return on total capital and working capital in percentages of net turnover both increased compared to 2022. This industry thus shows a strong position for continued development and increased growth.

Profitability and volume development

Profitability in the business sector can be measured in numerous ways. The key ratios highlighted here for kind-of-activity unit is Operating margin before depreciations, and value added per employee.

Operating margin before depreciations for the business sector amounted in 2023 to 8.7 percent and has been relatively stable around 9 percent during the entire time series in the figure below. This margin shows that the business sector has received SEK 0.08 per SEK earned before depreciations, financial items and tax. A negative operating margin indicates thus that the operations has made a loss.

For the selected industries in the figure above, operating margin has varied more than for the business sector. NACE 24, Basic metals, and NACE 29, Motor vehicles, are traditional Swedish manufacturing industries, where operating margin for NACE 24 has returned to the same level in 2023 as previously in the time series at around 6 percent, while NACE 29 has had an even more varied time series and lands at 9.4 percent in 2023. Travel agents in NACE 79, have seen the operating margin returning to the level around 3 percent in 2023 which they had before the Corona pandemic in 2020-2021.

Another way of measuring profitability, or how productive the operations is, is to measure value added per employee, i.e. how much each employee contributes to the operations’ added value to cover for wages and salaries, depreciations, financial costs and tax. Value added in the business sector, for kind-of-activity unit, amounted to SEK 3 390 billion in 2023, where each employee contributed with SEK 1.1 million.

For both the business sector and the selected industries in the time series above, it is evident that operating margin and value added per employee are correlated.

By calculating production value and consumption value in both current and fixed prices, it is possible to compare development figures to see whether an increase in value added is due to an increased sales volume or if it is also affected by price changes. In 2023 production value increased by 5.2 percent, consumption value by 6.2 percent and value added by 3.5 percent expressed in current prices compared to 2022.

If these development figures are put in relation to the price increases it is noticeable that a large part of the increases can be attributed to increased prices, and not to an increased sales volume. When the production, consumption, and value added of 2023 is expressed in 2022 prices, i.e. adjusted for the large price increases in 2023, production value increased by 1.2 percent and consumption value by 2.8 percent. Value added thus decreased by 1.6 percent.