February 2026 | Latest insight
Entry and exit
What is entry and exit?
Entry and exit rates describe the proportion of firms within an industry that have entered in a given year, and the proportion of firms that have exited.
The entry rate is measured as the percentage of new market sector employing firms entering an industry in a year divided by the total number of active market sector employing firms. The exit rate is measured as the percentage of market sector employing firms leaving an industry in a year divided by the total number of active market sector employing firms (ABS, 2025).
Why does it matter?
Lower or decreasing entry and exit rates indicate less competition, because where fewer firms are entering or exiting an industry, it suggests that:
- fewer new firms are competing with existing firms for customers, for example by offering novel products or services;
- fewer new firms are competing with existing firms for workers, for example by offering better pay or conditions; or
- there may be barriers preventing new firms from entering the industry to compete with existing firms (OECD, 2021).
However, entry and exit can sometimes be low in industries with substantial competition, if existing firms compete fiercely with each other.
What's happening with entry and exit?
Long term
Since 2004, both entry and exit rates have trended down.
Short termHowever, over the past decade they have been fairly stable, diverging briefly during COVID before returning to their long-term trend.
Entry and exit rates have stabilised after falling in the early 2000s
Share of market sector employing firms that entered or exited in the year
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February 2026 | In-depth look
Entry and Exit: Industry rankings
Industry entry and exit rates are fairly stable over time
Industry rank of entry rate over time (1 = industry with the highest entry rate)
February 2026 | In-depth look
Entry and exit by industry
Entry and exit by industry
Share of market sector employing firms that entered or exited in the year