Australian Built Environment Sector 2024

 Output and employment in Construction and related industries

 

 

There is no specific definition of an industrial sector. It is a broad collection of firms from different industries, for example ‘agriculture’ includes cropping, grazing, forestry and fishing, or the many ‘manufacturing’ industries like chemicals, plastics, steel and textiles. Firms in an industrial sector are too diverse and geographically distributed to be called an industry cluster, and this is the case for the dense network of firms involved in constructing, managing and maintaining the built environment. The collective significance of these firms from different industries is obscured by their diversity, ranging from architecture to waste disposal, and their geographic distribution, but together they are one of the largest and most important industrial sectors in the economy. 

 

The industries that make up the Australian Built Environment Sector (BES) are involved in construction of buildings and structures, supply of materials, machinery and equipment, provision of professional services in design, engineering and surveying, management of water and waste, and maintenance of buildings. Combining them into an industrial sector provides perspective on their economic role and significance. 

 

The analysis is based on data from the annual Australian Bureau of Statistics publication Australian Industry, using industry value added (IVA) and industry employment in June. IVA is the estimate of an industry’s annual output and its contribution to gross domestic product (GDP), and is broadly the difference between total income and total expenses. IVA is given in current prices in Australian Industry (i.e. not adjusted for inflation), therefore growth in IVA reflect changes in both prices paid for goods and services and the quantity of output. The data begins in 2006-07 and the most recent issue is 2023-24

 

Economies grow by upgrading the products they produce, but the technology, capital, institutions, and skills needed to make newer products are more easily adapted from related products with common labour and capital requirements. This network of relatedness means the set of options available for an industry are strongly influenced by its current product space. With new production technologies such as 3D printing of concrete, automated machinery and equipment, and prefabrication with engineered wood, the BES is a laboratory for the fourth industrial revolution. 

 

Taking a broad view of an industrial sector provides perspective on its role and significance in economic and technological development. When economic activities are spread across a wide range of individual industries the contribution of the whole is not obvious. This is why the tourism industry has an annual ABS TourismSatellite Account that brings together the contributions of industries like accommodation, tour operators and entertainment to estimate their total output and employment, which in 2023-24 was 2.9 percent of GDP and 4.4 percent of employment. The BES is over four times the size of tourism, and should have a satellite account of its own to provide more and better data for policies affecting construction of housing, infrastructure and other buildings [1].

 

Industries Included in the Australian Built Environment Sector

 

There are nine built environment industries included in the BES. In the industry classification system the ABS uses, eight of these are subdivisions (e.g. Construction has three subdivisions, and Non-metallic mining and quarrying is a subdivision of Mining), and Manufacturing is a division. Subdivisions are made up of industry classes (e.g. trades are classes within the subdivision of Construction services, and Architectural, Surveying and Engineering services are three classes in the non-IT subdivision of Professional, technical and scientific services).  Australian Industry has data for Manufacturing industry classes like Structural steel, Cement and Glass products, but for all other industries data is at the subdivision level [2].  

 

The industry subdivisions and classes included are:

·      Non-metallic mineral mining and quarrying, includes construction material mining;

·      Water supply, sewerage & drainage services;

·      Building construction, includes Residential and Non-residential contractors;

·      Heavy and civil engineering, includes Road and bridge construction and other Heavy and civil engineering;

·      Construction services, includes 19 industry trade classes;

·      Property operators and real estate services, includes Residential and Non-residential operators, and Real estate services;

·      Professional, technical and scientific services (except computer design and related services), includes Architectural, Surveying and Engineering services;

·      Building, cleaning, pest control and other services, includes Gardening services;

·      Manufacturing industries, includes 17 classes.

 

The boundaries around these subdivisions are not perfectly aligned with the built environment, so there is a bit of give and take in the data. For example, Non-metallic mineral mining and quarrying includes activities such as opal mining that are not related to the built environment. On the other hand, there are classes in subdivisions that are too broad to be included, despite their importance in construction and maintenance of the built environment. For example rental of heavy machinery and scaffolding is in a subdivision of Rental, hiring  and real estate services but the data is not available.

 

 

Contribution of the Built Environment Sector to the Australian Economy

 

In 2023-24, the BES employed 2,291,700 million people and the share of total employment was 16 percent. Since 2006-07 the BES share of total employment has been around 16 percent, except for 2010 and 2013 when it was 15 and 14 percent respectively. In 2023-24, the BES produced $376 billion in IVA, contributing 14.1 percent to nominal Australian GDP, and has been between 13 and 14 percent of GDP since 2006-07. The IVA per employee of the BES was $164,000 in 2023-24, compared to GDP per employee of $186,000. 

 

Table 1. Built Environment Sector Contribution to the Australian Economy 2023-24

 

Figure 1. Percent share of Australian employment and output

Source: ABS 8155, 5206, 6202.

 

There have been three growth spikes in BES employment since 2006-07. The first was after the 2008-09 financial crisis with the Commonwealth Government’s education building program, the second in the mid-2010s during the apartment building boom, and the third during the pandemic with the Homebuilder program. 

 

Figure 2. Annual change in employment

Source: ABS 8155, 6202.

 

Output of the BES has tracked GDP over time, in a similar pattern to employment. BES IVA grew faster than GDP in 2009-10 and between 2014 and 2016, but between 2017 and 2021 grew slightly less than GDP. The increase in inflation after 2021is clearly shown in Figure 3, which is in current prices and not adjusted for the inflationary effects on the supply chain.

 

Figure 3. BES IVA and GDP at current prices

 

Source: ABS 8155, 5206. 

 

Contribution of Industries to the BES

 

There have been changes in the composition of the BES since 2006-07. Manufacturing has fallen from 9 percent of employment and 10.5 percent of IVA to 6 percent for both in 2023-24. Employment has increased by 2 percent for total Construction and 1 percent for Services, and IVA for Quarrying and Water, sewerage, drainage and waste has increased by 4 percent.

 

The tables below have the number of people employed in June 2024, the IVA for 2023-24 and IVA per employee for industries in the BES. IVA per employee is a broad indicator of productivity, although not precise it allows comparison between the labour intensive subdivisions like Building services and the capital intensive subdivisions like Quarrying.

 

Construction Industry

 

The construction industry is the core of the sector, making up 56 percent of BES employment, and 47 percent of BES IVA in 2023-24. Within Construction, the shares of Building and Engineering have increased while Construction services has declined.  As Figure 4 shows, the relationship between the share of BES employment and the share of BES IVA  is markedly different, with Construction services having a much larger share of employment of 38.5 percent than IVA at 27.3 percent in 2023-24, for Building the shares were 11.1 percent of both employment and IVA, and for Engineering the shares were 6.7 percent of employment and 8.7 percent of IVA.

 

Figure 4. Construction subdivision shares of employment and output

Source: ABS 8155.

 

Table 2. Construction subdivisions 2023-24

 

Service Industries

 

Services are provided by BES classes within the subdivisions of Property operators and real estate, Professional, technical and scientific services (except computer design and related services), and Building, cleaning and pest control. The combined share of the BES for the three subdivision in 2023-34 was 35 percent of employment and 38.5 percent of IVA. 

 

The share of the BES of Property operators and real estate employment was 14 percent but the subdivision had a higher IVA share of 24 percent in 2023-24. The employment and IVA shares for the Architectural, Engineering and Surveying services in the Professional, technical and scientific services subdivision were both 11 percent. Building, cleaning and pest control had a much larger share of employment at 9 percent than IVA of 4 percent. 

 

Figure 5. Service industry subdivision shares of employment and output

Source: ABS 8155.

 

Table 3. Service industry subdivisions 2023-24

 

Quarrying, Water and Manufacturing

 

There are three capital intensive industries in the BES: Manufacturing (discussed below), Quarrying, and Water, sewerage, drainage and waste. Figure 6 shows the Quarrying and Water subdivisions have significantly higher shares of IVA than employment because of the high level of capital stock in those industries, made up of machinery and equipment in Quarrying, and physical infrastructure and equipment for Water etc. There was a very large increase in Quarrying IVA in the data for 2022-23 that has been carried into 2023-24 that is not explained by the ABS, but is probably due to a reclassification of a firm from another mining subdivision or industry. Manufacturing has declined from 9 percent of employment and 11 percent of IVA to 6 percent of both in 2023-24. 

 

Figure 6. Capital intensive industry subdivision shares of employment and output

 

Source: ABS 8155.

 

Table 4. Quarrying, Water and Manufacturing 2023-24

 

 

 

BES Manufacturing

 

Seventeen Manufacturing industry classes are included in the Australian Built Environment Sector, and in 2023-24 there were 147,776 people employed in these industries. Figure 7 shows BES Manufacturing output and employment since 2006-07. The rise in prices during 2021 and 2022 is clearly seen in IVA. The industry classes included in BES Manufacturing are in Table 5.

 

Figure 7. BES Manufacturing output and employment 

Source: ABS 8155.

 

Table 5 has the number of people employed, IVA per employee in 2023-24 and their change in employment since 2006-07. Three classes have had small decreases in employment, but employment has fallen by 36 percent for Clay brick manufacturing. The two manufacturing classes that have grown the most are Prefabricated wooden buildings and prefabricated metal building, both by 72 percent since 2006-07,although the former is a much smaller class than the latter. 

 

Cement and lime manufacturing has the highest IVA per employee of $389,000, with Glass and Plaster products and Clay bricks the other high IVA per employee classes. The four classes with low IVA per employee were Veneer and plywood, Architectural aluminium, Metal roof and guttering and Other structural metal products. 

 

Table 5. BES Manufacturing 2023-24

 

Figure 8 shows there are significant differences in the size of Manufacturing classes with products used in the BES. The three largest in 2023-24 by both employment and IVA were Wooden structural fittings and components, Structural steel, and Architectural aluminium. The smallest were Prefabricated wooden buildings, Veneer and plywood manufacturing, Clay bricks, and Plaster products. 

 

Figure 8. BES Manufacturing classes IVA and employment

Source: ABS 8155.

 

 

Conclusion

 

This analysis uses data from the annual Australian Bureau of Statistics publication Australian Industry and combines data for industries that have a direct relationship with construction and the built environment. These industries make up the Australian Built Environment Sector (BES). 

 

Onsite construction links suppliers of materials, machinery, equipment, products and components. Consultants provide design, engineering, cost planning and project management services. Once produced, buildings and structures need to be managed and maintained over their life cycle, work done by another group of related industries. The built environment also needs infrastructure and services like water and sewerage, provided by yet more industries. The collective significance of these industries is obscured by their diversity, ranging from architecture to waste collection, and their geographic distribution. 

 

The economic role of the BES is significant. It accounted for 16 percent of total employment and BES Industry Value Added (IVA) was 14 percent of GDP in 2023-24. With a couple of exceptions, these shares have been constant since 2006-07 when the data begins. In 2023-24 BES IVA per employee was $164,000  compared to GDP per employee of $186,000. 

 

The composition of the BES has changed slowly over time, as the percentage share of Manufacturing decreased from 10.5 percent of BES IVA and 9 percent of employment in 2006-07 to 6 percent for both in 2023-34. Employment has increased by two percent for total Construction and one percent for Services, and IVA for Quarrying and Water, sewerage, drainage and waste has increased by four percent.

 

Of the nine industries included in the Australian BES, three are from Construction, which accounted for 47 percent of BES IVA and 56 percent of BES employment. Within Construction, since 2006-07 the shares of Building and Engineering have increased while the Construction services share has declined.  

 

Services are provided by Property operators and real estate, Professional, technical and scientific services (except computer design and related services), and Building, cleaning and pest control. The combined share of the BES for the three subdivisions in 2023-34 was 35 percent of employment and 38.5 percent of IVA. 

 

There are two capital intensive industries in the BES, Quarrying, and Water, sewerage, drainage and waste. These subdivisions have significantly higher shares of IVA than employment because of the high level of capital stock in those industries, made up of machinery and equipment in Quarrying, and physical infrastructure and equipment for Water etc. 

 

Seventeen manufacturing industry classes are included in the Australian Built Environment Sector, and in 2023 these employed 147,776 people with a combined IVA of $23 billion. The two manufacturing classes that have grown the most are Prefabricated wooden buildings and Prefabricated metal building, both by 72 percent since 2006-07, although the former is a much smaller class than the latter.

 

BES output and employment are useful indicators of the capacity constraints in construction of housing, infrastructure and other buildings, because the quantity of materials like gravel and concrete that can be produced in one year is limited, and the number of trades workers, engineers, project managers, and other workers, cannot be increased easily or quickly. This is only one of the many issues affecting construction, management and maintenance of the built environment. 

 

These issues are wicked problems of great complexity that range widely across industries, institutions and regulatory systems. How measuring the BES helps is by providing an overview of the relatedness, scale and scope of these industries, their role in the value chain from suppliers to end users, and the possibilities for improving coordination between these industries. The built environment this industrial sector delivers is a major determinant of the quality of life, and how well the built environment functions depends on how well the BES can deliver the projects required.

 

                                                                      *

 

[1] See Getting a broad view of constructing the built environment: A satellite account for built environment industries. In 2025 the ABS has new estimates for a quarterly Tourism satellite account, and a new 2023-24 satellite account for the Defence Industry (0.47% of national gross value added and 0.48% of employment) with Construction 13.2% of Defence GVA. 

 

[2] Data on the industries included in the BES needs to be available at a level of detail that separates out BES components. This excludes industry divisions such as Transport and Financial services that clearly play a role in the BES, but that role cannot be identified in the data available for subdivisions. There are two industry subdivisions that can have their employment and IVA estimates weighted for the BES component, because the ABS occasionally releases supplementary tables that provide data at the industry class level. These are Professional, scientific and technical services (except computer design and related services), and Building cleaning, pest control and other services.

 

For Professional, scientific and technical services (except computer design and related services),  in 2015-16 the combined share of the BES classes of Architectural services, Surveying and mapping services, and Engineering services in the subdivision were 24% of total employment and 28% of IVA. In 2016-17 data was provided for Administrative and support services, with the three BES classes Building and other industrial cleaning, Pest control, and Gardening services accounting for 95% of the subdivision’s total employment and 92% of IVA. 

 

Australian Industry is produced annually using a combination of directly collected data from the ABS Economic Activity Survey and Business Activity Statement data provided by businesses to the Australian Taxation Office. The data includes all operating business entities, including non-profits, and Government owned or controlled Public Non-Financial Corporations. Excluded are entities classified to General government, Finance and insurance services, and Public administration and Defence. 

 

 

Review of Adam Becker’s More Everything Forever

 AI Overlords, Space Empires, and Silicon Valley’s Crusade to Control the Fate of Humanity. 

 

 

There is a notion that science fiction is a form of future history, that science-based hard SF predicts future technology. This is almost entirely wrong. Issac Asimov’s robots had positronic brains and obeyed the three laws of robotics, Arthur C. Clark’s aliens hollowed out asteroids and humanity became a deathless spacefaring species of pure mind, Larry Niven’s Ringworld surrounded a star at its centre. Space empires feature in many books, as does colonisation of the solar system, generation ships travelling to distant stars, people crossing space in cryogenic stasis or as uploaded minds. After decades of reading hard SF and believing that humanity’s destiny was in space, I know that none of this has happened, and lately I have accepted with great sadness that none of it is likely to happen any time soon.

 

In his book on ideas about the future of humanity, Adam Becker describes his experience of this: ‘When I was a kid, I thought Star Trek was a documentary about the future … that this was the future that smart adults had worked out as the best one, that this was what we were going to do … We’d go to space, we’d seek out new life and new civilizations, and we’d do a lot of science. I was six, and that sounded pretty good to me.’  He then says ‘The future, I knew, ultimately lay in space, and going there would solve many - maybe even all - of the problems here on earth. I believed that for a long, long time.’

 

His book is also about a group of influential people who have taken SF as an attempt to predict the future, the tech billionaires who ‘explicitly use SF as a blueprint.’  Elon Musk (Tesla) wants to go to Mars, Jeff Bezos (Amazon) wants a trillion people in space, Sam Altman (OpenAI , the developer of Chat GPT) thinks AI will literally produce everything, Marc Andreessen (a leading Silicon Valley investor) wants a techno-capitalist machine to conquer the cosmos with AI. The list goes on. 

 

Becker argues the ‘credence that tech billionaires give to these specific SF futures validates their pursuit of more … in the name of saving humanity from a threat that doesn’t exist.’  That threat is a machine superintelligence that can rapidly improve itself, leading to an out of control Artificial General Intelligence (AGI) whose creation could, would or will be an extinction event, because an ‘unaligned AGI’ does not share human gaols or motives. 

 

Becker’s book dissects the ideas and ideology that many tech billionaires believe. He follows the money through the institutes, organisations and foundations that they fund, finding the connections and overlaps between networks of funders, researchers, philosophers, philanthropists, authors, advocates and activists. Over six lengthy chapters he discusses the history and development of eight separate but similar belief systems, that collectively I’m calling the ‘transhumanist bundle.’ Transhumanism is ‘the belief that we can and should use advanced technology to transform ourselves, transcending humanity’,  and it is the foundational set of ideas shared by the tech billionaires. 

 

Transhumanism is using technology to create a new ‘posthuman’ species with characteristics such as an indefinitely long lifespan, augmented cognitive capability, enhanced senses, and superior rationality. It was originally a mid-20th century idea associated with Pierre Teilhard de Chardin’s Omega Point, an intelligence explosion that would allow humanity to break free from time and space and ‘merge with the divine’ (he was a Catholic priest), then popularised by his friend Julian Huxley with his ideas on transcendence and using selective breeding to create the best version of our species possible. Nick Bostrom founded the World Transhumanist Association in 1998, rebranded as Humanity+ in 2008 with its mission ‘the ethical use of technology and evidence-based science to expand human capabilities.’ His Future of Humanity Institute was founded in 2005 and closed in 2024. 

 

The transhuman bundle of ideologies has become enormously influential, especially in Silicon Valley and the tech industry, and have been a motivating force behind a lot of the research and development of AGI. Followers of this movement typically believe that AGI will become capable of self-improvement and therefore create the singularity. As Becker notes, there is an element of groupthink at work here. Besides Musk, Bezos and Andreessen, billionaires associated with these ideologies include Peter Thiel, Jaan Tallinn, Sam Altman, Dustin Moskovitz, and Vitalik Buterin, whose donations finance institutes, promote researchers, and support the movement. 

 

Becker starts with effective altruism, known for the fall of Sam Bankman-Fried who funded effective altruism conferences, institutes and organisations before his conviction for fraud. Based on the ideas of utilitarian philosophers Peter Singer, William MacAskill and Toby Ord, the premise was that people should donate as much of their income as possible to causes that provide maximum benefit to mankind, the ‘earn to give’ idea. Initially the focus was on global poverty, but later morphed into a focus on AI safety, based on the assumption that  the threat of extinction from unaligned AGI is the greatest threat to humanity. 

 

MacAskill gave effective altruism an ethical perspective based on the very long-term future and a view that what is morally right is also good. Because the future could potentially contain billions or trillions of people, failing to bring these future people into existence would be morally wrong. Longtermism is therefore closely associated with effective altruism, MacAskill (‘positively influencing the longterm future is the key moral priority of our time’), and Ord  (‘longtermism is animated by a moral re-orientation toward the vast future that existential risks threaten to foreclose’). 

 

Longtermism is based on the reasoning that, if the aim is to positively affect the greatest number of people possible and if the future could contain trillions of future digital and spacefaring people, then we should focus our efforts today on enabling that far future, instead of focusing on current people and contemporary problems, except for preventing catastrophes like unaligned AGI or pandemics. The utilitarian calculation is that the low probability of this future is outweighed by the enormous number of future people. On longtermism Becker says ‘The likelihood of these futures is small, not just because they are scientifically implausible but also because they’re rather specific, depending on so many small things falling into place, things we can’t know about.’

 

Then there is Singularitarianism, a related idea that there will be a technological ‘singularity’ with the creation of AGI. This would be an ‘intelligence explosion’, a point in time when technological progress becomes recursive and so rapid it alters humanity. Associated with Ray Kurzweil and his 2005 book The Singularity is Near, when humans will merge with intelligent machines and expand into space to flood the universe with consciousness, which he predicted would happen by 2045. His new 2025 book is called The Singularity is Nearer. A different version from Nick Bostrom takes creating Superintelligence (the title of his 2014 book) as the transformative moment that enables us to become posthuman and colonise space. 

 

Eliezer Yudkowsky predicts the singularity will happen in ‘more like five years than fifty years’ from now. He believes an unaligned AGI is an existential threat and all AI research should be stopped until there is a way to ensure a future AGI will not kill us all. His Machine Intelligence Research Institute (founded 2005) website opens with: ‘The AI industry is racing toward a precipice. The default consequence of the creation of artificial superintelligence (ASI) is human extinction. Our survival depends on delaying the creation of ASI, as soon as we can, for as long as necessary’.

 

Rationalism arose around a website founded in 2009  by Yudkowsky called Less Wrong, ‘dedicated to improving human reasoning and decision-making’ and motivated by his fear of the threat of an unaligned AGI that exterminates humanity in pursuit of some obscure AI goal, like using all available matter (including humans) to create more computing capacity. This is Bostrom’s paperclip problem, where a powerful AI kills everyone and converts the planet, galaxy and eventually the universe into paperclips because that was the goal it was given, or more generally, a ‘misaligned AGI is an existential catastrophe.’

 

Extropianism was another variant of Transhumanism, with the foundation of the Extropy Institute in 1992 by Max Moore, who defined extropy as ‘the extent of a system’s intelligence, information, order, vitality and capacity for improvement’. The Institute’s magazine covered AI, nanotechnology, life extension and cryonics, neuroscience and intelligence increasing technology, and space colonisation. The Institute closed in 2006, but it successfully spread transhumanism through its conferences and email list. 

 

Cosmism combines these ideas with sentient AI and mind uploading technology, leaving biology behind by merging humans and technology to create virtual worlds and develop spacetime engineering and science. Originating with Nikolai Fedorov, a Russian Christian ‘late nineteenth century philosopher and librarian’ who believed technology would allow the dead to be resurrected, and the cosmos to be filled by ‘everyone who ever lived.’ There is a strong eschatological element to the transhumanist bundle, with the centrality of belief in transcendence and immortality.

 

Effective accelerationism is the most recent addition to this movement. Venture capitalist Marc Andreessen published his ‘Techno-Capitalist Manifesto’ in 2023 and argued ‘advancing technology is one of the most virtuous things that we can do’, technology is ‘liberatory’, opponents of AI development are the enemy, and the future will be about ‘overcoming nature.’  Andreessen writes a ‘common critique of technology is that it removes choice from our lives as machines make decisions for us. This is undoubtedly true, yet more than offset by the freedom to create our lives that flows from the material abundance created by our use of machines.’

 

There is significant overlap between these different ideologies, and the argument that an AGI will safeguard and expand humanity in the future allows believers in the transhumanist bundle to make creating AGI the most important task in the present. This utopian element of the transhumanist bundle believes a powerful enough AGI will solve problems like global warming, energy shortages and inequality. In fact, the race to develop AGI is inflicting real harm on racial and gender minorities (through profiling based on white males), the disabled (who are not included in training data), and developing countries affected by climate change and the energy consumption of AI. 

 

There are so many problems with the transhumanist bundle. Becker argues they are reductive, ‘in that they make all problems about technology’, for tech billionaires they are profitable, and they offer transcendence, ‘ignoring all limitations … conventional morality … and death itself.’ He calls this ‘collection of related concepts and philosophies … the ideology of technological salvation.’ The transhumanist bundle has presented progress toward AGI as inevitable and grounded in scientific and engineering principles. However, while science is used as a justification for these beliefs, the reality is that they are scientifically implausible.

 

First, AGI has not been achieved, and may not ever be achievable. Superintelligent machine do not exist, but the corporations developing AI have convinced policy-makers and politicians that preventing a hypothetical AI apocalypse should be taken seriously. Second, the threat of unaligned AGI is used to divert attention from the actual harms of bias and discrimination that are being done. Third, mind uploading will not be possible any time soon, and may never be possible given how little understood human intelligence, consciousness and brains are. 

 

Fourth, space colonisation is difficult. It may have to be done by robots because space is increasingly understood to be an inhospitable environment for people, given half a chance it will kill or harm anyone. Mars dust is toxic, Moon regolith is sharp splinters, Venus is hot and the moons of Jupiter cold. There is no air or water. Gravity seems to be necessary for health and growth. The technology to launch and build large space stations or hollow out and terraform asteroids is non-existent. 

 

Fifth, sustained economic or technological exponential growth is impossible, but is built into effective accelerationism, longtermism and the singularity. Kurzweil’s Law of Accelerating Returns, where technological advances feed on themselves to increase the rate of further advance, is neither supported by the history of technology, which shows diminishing returns as technologies mature, nor the laws of physics, which imposes physical limits on size, speed and power. 

 

In his conclusion Becker asks the question “if not an immortal future in space, then what? ‘He answers ‘I don't know. The futures of technological salvation are sterile impossibilities and they would be brutally destructive if they come to pass.’ He quotes George Orwell: Whoever tries to imagine perfection simply reveals his own emptiness’, and argues the problems facing humanity are social and political problems that AI is unlikely to help with. ‘Technology can't heal the world. We have to do that ourselves.’ He suggests technology can be directed and we have to make choices about what we want technology to do as part of the solution to our problems. 

 

His ’specific policy proposal’ is to tax billionaires because there is ‘no real need for anyone to have more money than half a billion dollars’, with personal wealth above that returned to society and invested in health, education and ‘everything else it takes to make a modern thriving economy.’ This would address inequality and provide political stability, and  ‘Without billionaires, fringe philosophies like rationalism and effective accelerationism would stay on the fringe, rather than being pulled into the mainstream through the reality-warping power of concentrated wealth.’ 

 

This is a really interesting book that draws together a lot of scattered threads that are not commonly or obviously connected. Becker has deeply researched these ideas and people, who he quotes extensively in their own words (there are 80 pages of references in the Notes). His analysis is sharp and the critique is insightful. The delusional futurism of the tech billionaires is exposed as self-serving and dangerous. 

 

A more structured format with shorter, more focused chapters would make all the detail easier to follow. The chapters are long, between 40 and 60 pages, and each one covers a number of different related topics, for example he covers Kurzweil’s singularity and Eric Drexler’s nanotechnology in the same chapter, but these could have had their own chapters. This doesn’t affect readability, as an experienced science writer Becker writes well, but it makes it hard to keep track of what was discussed where.  The absence of an index doesn’t help either. 

 

Science fiction is stories about possible futures that may or may not happen, that may not be physically or practically achievable within any reasonable timespan. The further into the future a story is set, the less likely it is to be realised. Becker argues to base decisions today on such future stories ignores the problems that challenge us in the present, and to substitute the hypothetical danger of AGI for the real issues of climate change, geopolitical instability, inequality and economic uncertainty is foolish. Therefore the tech billionaires and the ideology of the transhuman bundle they follow is a real threat to the future of humanity. 

 

 

Adam Becker, More Everything Forever: AI Overlords, Space Colonies and Silicon Valley’s Quest to Control the Future of Humanity. Basic Books, 2025.  

Australian Construction Productivity

Is the industry’s productivity as bad as claimed?

 

The Australian Bureau of Statistics publishes productivity measures for the whole economy, the Market Sector, and for the 16 industries that make up the Market Sector. Productivity is the ratio of output and inputs and is affected by innovation, research and development, education and training, the quality and age of the capital stock (of machinery, plant and equipment, buildings and structures), the rate of technological change and adoption of new technologies.  The effects of all these factors takes time, so productivity is a long-run measure that changes gradually. 

 

The post compares Construction productivity to the performance of the Market Sector. The data used is from the annual ABS Productivity Statistics release, which has data from 1994-95 to 2023-24 (the most recent release was February 2025). The ABS productivity indexes are based on 100 in 2022-23, however for this analysis they have been first rebased to 100 in 1994-95 to compare the long-run growth of Construction and Market Sector productivity, and then rebased at 100 in 2015-16 for comparing productivity in the short-run. 

 

Comparisons are made for labour productivity and multi-factor productivity (MFP) using both the hours worked and quality adjusted labour input measures. The quality adjusted labour input indexes take into account characteristics of the workforce like years of education, levels of training, industry of employment, age and sex. These quality adjusted measures reflect changes in the composition and skills of the workforce, and typically have a lower rate of growth than the hours worked measure. Capital productivity is also shown. 

 

As well as comparing the different measures of productivity for Construction and the Market Sector, there is data for the individual industries that shows Construction is in no way the worst performing industry, although it is far from the level of growth seen in the best performing industries.

 

 

Productivity Since 1995

 

The long-run performance of Construction includes a sharp rise during the mining boom between 2012 and 2015, followed by a gradual decline over the next few years as these major resource projects completed [1]. At the end of the mining boom productivity had fallen to around the level it was before the boom. This pattern was due to the large increase in Construction output during the mining boom because output included plant and equipment like the offshore drilling platforms and gas liquefaction plants, none of which involved much construction work and most of which was imported. Productivity increased because this statistical quirk increased output much more than employment and hours worked [1]. 

 

Labour Productivity

 

Starting with labour productivity over the long run since 1994-95, the difference between growth in the Market Sector and the lower productivity growth of the Construction industry is apparent in Figure 1. However, despite claims made that there has been no growth in Construction labour productivity, there has been an increase. Construction labour productivity has increased by 17% on an hours worked basis and 24% on the quality adjusted labour input basis which, although less than the Market Sector’s 64% and 41% respectively, is not nothing. 

 

Figure 1. Market Sector industries labour productivity

 

Source: ABS 5260. Gross value added per hour worked. Quali is the quality adjusted labour input measure. 

 

As Table 1 shows, since 1995 the three leading industries for hours worked labour productivity growth have been Agriculture, forestry and fishing 210%, Information media and telecommunications 228%, and Financial and insurance services 123%. The two industries with lower growth than Construction were Mining 6%, Electricity, gas, water 2%, and Administrative and support services had negative growth of -13%. 

 

For quality adjusted labour productivity, Construction had better growth than Rental, hiring and real estate services 4%, and there were three industries with negative growth: Mining -2%, Electricity, gas, water and waste -9%, and Administrative and support services -23%.

 

Table 1. Market Sector industries labour productivity change

 

Multi-factor Productivity 

 

The ratio of output to input of combined labour and capital is multi-factor productivity (MFP). For MFP the story is not as good as for labour productivity, because there has been only 1% growth in Construction hours worked MFP and a 3% fall in the quality adjusted measure.  Market Sector growth on the hours worked basis was 23% and on the quality adjusted labour input basis was 13%. After MFP rose and fell during the mining boom, instead of returning to the preboom level there was collapse in Construction MFP after 2015-16.

 

Figure 2. Market Sector industries multi-factor productivity

 

Source: ABS 5260. Gross value added per hour worked. Quali is the quality adjusted labour input measure. 

 

The 1% increase in Construction hours worked MFP is very small, but not the decline often claimed for the industry. Table 2 shows four industries had a fall in hours worked MFP since 1995:  Mining -28%, Electricity, gas, water -30%, Rental, hiring and real estate services -32%, and Administrative and support services -16%. The three high growth industries were: Agriculture, forestry and fishing 182%, Information media and telecommunications 64%, and Financial and insurance services 63%. 

 

Construction, however, was one of five industries with negative quality adjusted labour input MFP growth, although at -3% it had a much smaller decline than the other industries of Mining -31%, Electricity, gas, water and waste -33%, Rental, hiring and real estate services -36%, and Administrative and support services -25%. This raises the question of why Construction is singled out as the problem industry. 

 

Table 2. Market Sector industries multi-factor productivity change

 

Capital Productivity

 

Capital productivity has been falling for both the Market Sector and Construction since the early 2000s.  This is a complex measure, because estimating the stock of capital requires an estimate of annual capital investment and a depreciation rate to account for declining efficiency of the existing stock due to use and age. Although Construction capital productivity peaked in the mid 2000s and declined during the mining boom, the post-boom fall in MFP was due to the sharp decline in capital productivity, because since then labour productivity was more or less flat but capital productivity was falling. As Figure 3 shows the Market Sector also had declining capital productivity, but after 2015-16 the decline in Construction capital productivity was much worse. 

 

Figure 3. Market Sector industries capital productivity 

 

Source: ABS 5260. 

 

What these long run graphs show is that there was a downward shift in Construction productivity around 2015, when both MFP and capital productivity went into significant decline. Up until then Construction productivity had been similar to Market Sector productivity for MFP, but after 2015 the Market Sector and Construction industry measures diverged. The next section looks at productivity over the short run since that divergence.

 

Productivity Since 2015-16

 

Labour Productivity

 

Labour productivity in the short run since 2015-16 has a distinctive and interesting pattern. The hours worked measure has fallen 4% from 100 to 96 but the quality adjusted labour input measure has increased by 6% from 100 to 106, and was in fact higher then both Market Sector measures in 2023-24. The increase in the Quali index occurred in the 2019-20 year with a big jump from 95 to 104, and there has been a gradual increase in the years since. 

 

Figure 4. Market Sector industries labour productivity 

 

Source: ABS 5260. Gross value added per hour worked. Quali is the quality adjusted labour input measure. 

 

The increase in the Construction quality adjusted labour input measure index will be the result of changes in the composition of employment, with the combined share of Professionals and managers increasing from 15% to 18% between 2019 and 2020, and peaking at 19% in 2022. Figure 5 shows the share of Professionals increased from 4% to 6% in 2020, and for Managers the share rose rom 10% to 12% in 2020 and was 13% from 2021 to 2023. In 2024 Technicians and trades workers were 50% of Construction employment, and Machinery operators another 6%, and their combined shares in total Construction employment have decreased by 3% since 2016. The share of Clerical and administrative workers has also declined, by 0.6%. Therefore, since 2016 the overall makeup of Construction workforce has become more skilled and qualified, raising the quality adjusted labour input measures [2]. 

 

Figure 5. Share of total Construction employment

 

Source: ABS 6291

 

Between 2016 and 2024 there were large differences in the productivity performance of the 16 Market Sector industries. As Table 3 shows, on the labour productivity hours worked basis there were two industries with high growth: Agriculture, forestry and fishing 44%, and Information media and telecommunications 40%. Four industries had growth between 10 and 20%, and five had growth less than 10%. Construction -4% was one of five industries with negative growth, the others were Mining -15%, Manufacturing -4%, Electricity, gas, water and waste -15%, and Financial and insurance services -4%.

 

On a quality adjusted basis Construction was the only industry to improve on the hours worked measure, all other industries had slightly lower quality adjusted labour input growth than hours worked. The other four industries with negative hours worked labour productivity again had negative quality adjusted labour input labour productivity growth. There were only six industries with better quality adjusted labour productivity growth than Construction’s 6%: Agriculture, forestry and fishing 41%, Wholesale trade 7%, Accommodation and food services 8%, Information media and telecommunications 33%, Professional, technical and scientific services 14% and Administrative and support services 12%.

 

Table 3. Market Sector industries labour productivity change

 

Multi-factor Productivity 

 

The MFP indexes for Construction do not show the same pattern as labour productivity. Both the hours worked and the quality adjusted indexes have fallen since 2016 and have closely followed each other down, ending at 92 and 91 respectively in 2024. However, the Market Sector has not performed particularly well, with the quality index only increasing to 101 and the hours worked index increasing to 104. 

 

Figure 6. Multi-factor productivity

 

Source: ABS 5260. Gross value added per hour worked. Quali is the quality adjusted labour input measure. 

 

MFP growth since 2016 is similar to labour productivity with a couple of exceptions. Table 4 shows on the hours worked measure only Agriculture, forestry and fishing 44% had high growth, and there were three industries above 10%. Five industries had negative growth: Construction -8%, Mining -3%, Manufacturing -1%, Electricity, gas, water and waste -15%, and Arts and recreation services -1%. Again, the growth in the quality adjusted labour input measure was lower than for hours worked, with Construction -9% one of eight industries with declining productivity, including Mining -3%, Manufacturing -3%, Electricity, gas, water and waste -16%. Transport, postal and warehousing -3%, Rental, hiring and real estate services -1%, and Arts and recreation services -3%. 

 

Table 4. Market Sector industries multi-factor productivity change

 

Capital Productivity

 

The performance of capital productivity has been particularly poor for construction, falling from 100 to 85 between 2016 and 2024, while the market sector index barely increased and ended at 103.

 

Figure 7. Capital productivity

 

Source: ABS 5260. 

 

Misunderstanding Productivity

 

There are two common misunderstandings about Construction productivity. One is that increasing offsite manufacturing and use of modern methods of construction like prefabrication and modular buildings will increase measured Construction productivity. It will not, because that work will be included by the ABS in the Manufacturing industry subdivisions of Prefabricated steel and timber buildings, Concrete products, and Structural steel. In fact, one reason for the lack of growth in measured Construction productivity has been the gradual but continual shift to more prefabrication and offsite manufacture. 

 

A second misconception is that improving Construction productivity will somehow decrease the cost and increase the number of dwellings being built. This mistakes new construction for the market for housing, where in the short-run price is determined by the interplay of demand and an inelastic supply of new dwellings due to limited industry capacity to build and lengthy approval times. Increasing onsite productivity might decrease the time to complete a build but will have a marginal effect on the total cost of delivery, and the number of dwellings built is determined by project feasibility (i.e. the profitability of development) at any one time. Improving Construction productivity might help, but on its own cannot and will not solve the housing crisis. 

 

Conclusion

 

That the Construction industry has had no or negative productivity growth for the last few decades has been repeated so many times by so many commentators it has become an accepted fact about the industry. There are, however, four different measures of productivity, and commentators can focus on those that support their claims, and productivity growth rates vary considerably over different time periods, allowing selective choosing of comparisons. 

 

The four productivity measures are labour productivity on an hours worked basis or quality adjusted labour input basis, and multi-factor productivity (MFP includes the capital stock) also on an hours worked basis or quality adjusted labour input basis. The ABS productivity statistics for the Market sector go back to 1994-95, and this analysis has been for two periods, the long-run from1994-95 to 2023-24 (the latest data) and the short-run period of 2015-16 to 2023-24, chosen because 2015-16 was the end of the rapid rise and fall in Construction productivity during the mining boom. 

 

When the productivity of Construction is compared to the Market sector, despite claims that there has been no growth in Construction labour productivity, there has been an increase. Since 1994-95 Construction labour productivity has increased by 17% on an hours worked basis and 24% on the quality adjusted labour input basis which, although less than the Market Sector’s 64% and 41% respectively, is not nothing. Construction is in no way the worst performing industry, although it is far from the level of growth seen in the best performing industries.

 

In Australia there is a wide difference between a group of high productivity growth industries and a group of low or negative productivity growth industries. On the hours worked measure for labour productivity, since 1994-95 there were three high growth industries, and ehree industries with lower growth than Construction. For quality adjusted labour productivity, Construction had better growth than Rental, hiring and real estate services’ 4%, and there were three industries with negative growth. 

 

For MFP the story is not as good, because since 1994-95 there was only 1% growth in Construction hours worked MFP. That 1% increase in Construction hours worked MFP is very small, but not a decline. Market Sector growth on the hours worked basis was 23%, and on the quality adjusted measure Market Sector growth was 13%. On the hours worked basis there were three high growth industries, and four industries had a decline. Construction was one of five industries with negative quality adjusted labour MFP growth, although at -3% it had a much smaller decline than Mining -31%, Electricity, gas, water and waste -33%, Rental, hiring and real estate services -36%, and Administrative and support services -25%. This raises the question of why Construction is singled out as the problem industry. 

 

Construction capital productivity peaked in the mid 2000s and falling MFP was due to this decline in capital productivity. The Market Sector also had declining capital productivity, but there was a downward shift in Construction productivity around 2015, when both MFP and capital productivity went into significant decline and the Market Sector and Construction industry measures diverged.

 

There is a notable difference between the quality adjusted labour input measures and the hours worked measures for Construction labour productivity since 2015-16, because the hours worked measure has fallen 4% but the quality adjusted labour input measure has increased by 6%. The increase in the Construction quality adjusted labour input measure index will mainly be the result of changes in the composition of employment, with the combined share of Professionals and Managers increasing from 15% to 19% in 2022. The Construction workforce has become more skilled and qualified, raising the quality adjusted labour input measures.

 

Between 2016 and 2024 on the labour productivity hours worked basis there were two high growth industries, four industries had growth between 10 and 20%, and five with growth less than 10%. Construction -4% was one of five industries with negative growth, the others were Mining -15%, Manufacturing -4%, Electricity, gas, water and waste -15%, and Financial and insurance services -4%. On a quality adjusted basis Construction was the only industry to improve on the hours worked measure, and there were only six industries with better quality adjusted labour productivity growth than Construction’s 6%.

 

For MFP growth since 2016 on the hours worked measure only Agriculture, forestry and fishing had high growth, and there were three industries above 10%. Five industries had negative growth: Construction -8%, Mining -3%, Manufacturing -1%, and Electricity, gas, water and waste -15%. Again, the growth in the quality adjusted labour input measure was lower than for hours worked, with Construction -9% one of eight industries with declining productivity, including Mining -3%, Manufacturing -3%, and Electricity, gas, water and waste -16%.

 

Clearly, Construction is far from the worst performing industry, which raises the question of why it is so often singled out for low productivity growth. There were only six industries with better quality adjusted labour productivity growth than Construction. And are industries that have had declining productivity like Mining or Electricity, gas, water and waste not important? Should their productivity performance not be scrutinised? 

 

Maybe Construction could do better, but there have only been a few high growth industries in Australia over recent decades. Construction is one of a group of low growth industries, and compared to those industries its performance has been much better in both the long and the short-run. Instead of complaining about low productivity growth, attention should be focused on addressing the issues that have negatively affected Construction productivity, such as the number of micro and small firms, lack of standardisation of structural elements, the low level of investment in software and capital stock, state based occupational licensing and building codes, procurement methods, financing and project management, and education and training systems [3].

 

 

[1] See The long cycle in Australian construction productivity

 

[2] See The changing composition of construction employment

 

[3] See Housing productivity report a missed opportunity