Insights from New Data on Australian Construction

Construction Industry Survey 2024

 

The ABS has published detailed data on the Construction industry for 2023-24. Although released as part of the Australian Industry data, this is the seventh of a series of irregular and infrequent Construction Industry Surveys done by the ABS [1]. The ABS collected employment, wages and salaries, income, expenses, operating profit, earnings before interest tax depreciation and amortisation (EBITDA), and industry value added (IVA) for private sector construction businesses. 

 

Construction is an industry division, divided into three subdivisions: 

·      Subdivision 30 Building construction, with the two groups of Residential and Non-residential building;

·      Subdivision 31 Heavy and civil engineering construction; and

·      Subdivision 32 Construction services with five groups of Land development and site preparation services, Building structure services, Building installation services, Building completion services, and Other construction services.

 

The survey divides income by: 

·      Type of client;

·      Nature of contract (contracting, subcontracting or speculative);

·      Type of asset (houses, other residential building, non-residential building, road and bridge construction, and other non-building construction); and

·      Type of work (new construction work, alterations, additions, renovations and improvements, and repairs and maintenance).

 

This post first looks at industry totals and the Construction subdivisions and groups, and details income and expenses. It then compares the amount per employee for income, wages and salaries, EBITDA and IVA across the subdivisions and groups to show their relative performance. The data on capital expenditure, work done by type of asset and type of work is presented. 

 

Australia is in the fortunate position of having one of the world’s best statistical agencies with the ABS, at a time when other countries are having issues with their data collections [2].

 

 

 Industry Totals

 

Total employment was 1,291,000 people, of which Construction services were 883,000 or 68%. Within Construction services, the largest groups were Building installation services (329,000 people) and Building completion services (223,000 people). Building construction employed 254,000 with 173,00 in Residential building, and Heavy and civil engineering construction employed 154,000. 

 

Total income includes income from non-construction services and sales of land and goods, but the survey also has income from contracting and subcontracting. Construction total income was $633.6 billion with $438.6bn from contracting and subcontracting (69%), with $77bn of contracting income from the public sector (17.5%). For the three subdivisions:

·      Building construction’s total income was $235.2bn, with $130.8bn from contracting and $21.5bn from subcontracting, contributing $152.3bn. 

·      Heavy and civil engineering construction’s total income was $122.4bn with $85bn from contracting, of which $47.2bn (55.5%) was for the public sector, and $13.2 from subcontracting, contributing $98.2bn. 

·      Construction services’ total income was $276.1bn, with $116.6bn from subcontracting and $71.4bn from contracting, contributing $188bn. 

·      Within Construction services, Building installation services was the largest group by income ($94.2bn), followed by Building completion services ($53.2bn), which together were 53% of Construction services income. 

 

 

Table 1. Construction totals 

Source: ABS 8155DO008. 

Note: W & S is Wages and salaries, Total income includes income from non-construction services and sale of land and goods, Profit is Operating profit before tax, EBITDA is Earnings before interest tax depreciation and amortisation, IVA is Industry value added. 

 

Figure 1. Contracting income by client type

 

 

Non-construction income was 31% of total income, with $113.2bn from the sale of goods and $61.2bn from services. Income from sales of land and goods was a high proportion of contracting and subcontracting income for Residential building (67%) and Land development and site preparation services (53%). Income from Non-construction services (including professional, scientific and technical services) was a high proportion of contracting and subcontracting income for Heavy and civil engineering (14%), for Land development and site preparation services (43%), and for Building installation services (18%). 

 

Figure 2. Non-construction income by source

 

 

Expenses were $570.7bn in 2023-24. The largest were purchases of goods and materials ($255.4b) and selected labour costs ($105.7b). Payments to other businesses for construction services, building and industrial cleaning services was $91.6b, and this will have included Professional services like architectural, engineering and surveying services, and rental and hire of machinery and equipment .

 

Purchases of land for property development was $12.2 bn, with Residential building accounting for $7bn and Land development and site preparation $3bn of the total. Those purchases incurred $2.1bn and $1.3bn in interest costs for the groups, which also had $762mn and $1.4bn in depreciation and amortisation expenses. 

 

Performance Per Employee

 

Comparing the amount per employee for income, wages and salaries, EBITDA and IVA highlights the differences between the industry subdivisions and groups. The Non-residential building and Heavy and civil engineering construction subdivisions had much higher average wages and salaries and income than the rest of the industry, and the highest IVA per employee. The highest operating profit per employee and EBITDA was in Land development and site preparation, which was also the group with the highest income from non-construction services, and Building installation services had the lowest operating profit per employee and EBITDA.

 

Table 2. Amount per employee

Source: ABS 8155DO008. 

Note: W & S is Wages and salaries, Total income includes income from non-construction services and sale of land and goods, Profit is Operating profit before tax, EBITDA is Earnings before interest tax depreciation and amortisation, IVA is Industry value added. 

 

The figures below show the differences between the groups for wages, profits, EBITDA and IVA per employee. The general pattern is that Construction services have lower values than Building and Engineering, often around half as much, particularly for wages and contracting income. Average wages are notably low for Residential building and Building completion services. Contracting income per employee is highest in Non-residential building, by a considerable margin over Residential building and Engineering, and the three groups of Building installation, Building completion and Other construction services have almost the same contracting income per employee.

 

Figure 3. Wages and salaries per employee

 

 

Figure 4. Income per employee

 

Note: Includes contracting and subcontracting income, excludes non-construction income from sales of land and goods.

 

For EBITDA and IVA where non-construction services income is included, Land development and site preparation had the highest EBITDA and third highest IVA per employee. Residential building had lower IVA per employee but higher EBITDA than both Non-residential building and Engineering, which were the two groups with the highest IVA per employee. Interestingly, there is only a weak relationship between EBITDA and IVA per employee across the industry groups. 

 

Figure 5. EBITDA per employee

 

Note: EBITDA is Earnings before interest tax depreciation and amortisation.

 

The four Construction services groups of Building structure services, Building installation services, Building completion services and Other construction services have IVA per employee values around half that of Engineering, and around two thirds of Building. 

 

Figure 6. IVA per employee

 

Note: IVA is Industry value added.

 

Capital Formation

 

There is a well-established relationship between the amount of capital (both physical and intellectual) available for each worker and their level of productivity. All else equal, the more capital the higher the productivity. The survey has capital expenditure (capex) and gross fixed capital formation (GFCF) for the eight industry groups, and Figure 5 shows  the relationship between IVA per employee, capex and GFCF per employee.

 

Land development and site preparation had the highest level for both capex and GFCF per employee indicators, due to including purchases of land and equipment. Similarly, Engineering has a high capex that includes purchases of machinery and equipment, and also the highest IVA per employee. Capex is low for Residential and Non-residential building  because of the low level of ownership of heavy equipment and machinery due to extensive use of hiring and leasing, however that equipment and machinery lifts the level of IVA per employee. The other four trades in Construction services have capex and GFCF tracking IVA per employee, and are the best example of the relationship between capital and productivity.

 

Figure 7. IVA, capex and GFCF per employee in 2023-24. 

 

Note: Capex is capital expenditure and GFCF  is gross fixed capital formation.

 

Work Done by Type of Asset and Type of Work

 

Building Construction and Construction Services Income

 

There is a new set of data in this year’s survey that has the income from different types of asset built, divided into houses, other residential building and non-residential building, and the type of work done, divided into new construction work, alterations, additions, renovations and improvements, and repairs and maintenance. This is given for the three Building groups of Residential and Non-residential building and Construction services. 

 

Table 3. Income from construction services by type of work

 

 

Residential projects provided the largest source of income for Construction services, with $55.6bn from House construction and $17bn from Other residential building, a total of $72.6bn, compared to Construction services’ Non-residential building income of $66.2bn and Non-building construction’s $49.3bn. For the Non-residential building group, Alterations etc. income of $18bn was 58% of income from New work of $31bn.

 

Table 4. Type of work done by Building construction and Construction services

 

 

The distribution of income across type of work and type of asset can be found from this data. This has not previously been available and it allows a comparison of the relative importance of type of building work done. New work is 72% of the total, but of particular interest is that 9% is repair and maintenance, which is generally inefficient and labour intensive compared to new work. Around three quarters of R&M is (unsurprisingly) done by trades in Construction services and, except for Non-residential building, most of the alterations and additions.

 

Engineering Construction Income

 

Heavy and civil engineering construction total income was $98.2bn, of which $85.1bn was from contracting. Income was broken down by project type and into New work and Improvements and Repairs and maintenance (R&M): 

·       Road and bridge construction ($37.5bn; New work $34.5bn, R&M $2.6bn );

·       Railways, tramways and harbour construction ($17.3bn; New work $17bn);

·       Water storage and supply, sewerage and drainage construction ($7.2bn; New work $6.1bn, R&M $1.1bn);

·       Electricity generation, transmission and distribution construction ($11.5bn; New work $11.1bn);

·       Telecommunications construction ($1.2bn; New work $$567mn, R&M $595mn);

·       Oil, gas, coal, pipelines (not water) and other heavy industry construction ($9.4bn; New work $7.2bn, R&M $2.2bn);

·       Other non-building construction ($8.2bn; New work $7.6bn);

·       Building construction ($5.1bn; New work $5.5bn, Alterations & additions plus R&M $593mn). 

 

Roads and railways are by far the largest categories of new engineering work ($37.5bn and $17.3bn respectively), and it should be noted that 2023-24 was a year with exceptionally high public expenditure on infrastructure, with major projects underway in NSW, Victoria and Queensland. The third highest category was Electricity generation, transmission and distribution construction, reflecting expenditure on the energy transition with $11.1bn of new work. Repair and maintenance was 8.3% of total Engineering income. 

 

 

Key Points

 

Total income included income from non-construction services and sales of land and goods as well as income from contracting and subcontracting. Construction total income was $633.6 billion with$438.6bn or 69% from contracting and subcontracting. Contracting income from the public sector was $77bn. Sales of land and goods was a high proportion of contracting and subcontracting income for Residential building (67%) and Land development and site preparation services (53%).

 

Construction services have lower wages, profits, earnings before interest, tax, depreciation and amortisation (EBITDA) and industry value added (IVA) per employee values than the Building and Engineering groups, particularly for wages and contracting income. Contracting income per employee is highest in Non-residential building, much more than Residential building and Engineering, and the three groups of Building installation, Building completion and Other construction services have almost the same contracting income per employee. 

 

When non-construction services income is included, Land development and site preparation had the highest EBITDA and third highest IVA per employee. Residential building had lower IVA per employee but higher EBITDA than both Non-residential building and Engineering, which were the two groups with the highest IVA per employee. There is only a weak relationship between EBITDA and IVA per employee across the industry groups. The four Construction services groups of Building structure services, Building installation services, Building completion services and Other construction services have IVA per employee values around half that of Engineering, and around two thirds of Building. 

 

The survey has capital expenditure and gross fixed capital formation (GFCF). Land development and site preparation had the highest and Engineering the second highest for capex and GFCF per employee, due to purchases of land and equipment. Capex is low for Residential and Non-residential building  because of hiring and leasing of heavy equipment and machinery. The other four trades in Construction services have capex and GFCF closely tracking IVA per employee, a good example of the relationship between physical capital and productivity.

 

Data on the distribution of income across type of work and type of asset has not previously been available. For Building construction New work is 72% of the total, alteration, additions and improvements 19%, and repair and maintenance is 9%, with around three quarters of R&M done by trades in Construction services. However, the data does not include the number of people employed in R&M. 

 

For Heavy and civil engineering, total income was $98.2bn, of which $85.1bn was from contracting. Roads and railways are by far the largest categories of new work ($37.5bn and $17.3bn respectively). 2023-24 was a year with high public expenditure on infrastructure and 55.5% of income came from the public sector. Repair and maintenance was 8.3% of total Engineering income. 

 

The 2023-24 Construction Industry Survey has provided a level of detail previously unavailable. Key insights are that 69% of total income is from contracting and subcontracting, with the rest from provision of services and sale of land and goods, and 9% of income is from repair and maintenance. Although only 18% of total contracting income is from the public sector, for Engineering it is 56%. Purchases of land by Residential building was $7bn and by Land development and site preparation $3bn, with $2.1bn and $1.3bn in interest costs respectively. In Non-residential building work, Alterations, additions, renovations and improvements income of $21.2bn was 41.2% of the income from New work of $51.3bn. For House construction by Construction services, income from New work was $30.6bn, and for Alterations etc. was $17.6bn, 57% of New work income. 

 

Non-residential building and Engineering had the highest IVA per employee, followed by Land development and site preparation and Residential building. There is a wide productivity differential across the industry groups, as measured by IVA per employee. That may be an imprecise measure, but it is indicative of the labour intensity of the trades, and the higher capital intensity of the Building and Engineering subdivisions. One way to improve overall industry productivity would be through lifting the capital intensity of Construction services by providing incentives for them to increase capex. 

 

Conclusion

 

The ABS 2023-24 Australian Industry data included a survey of the Construction industry, with previously unavailable data on income from work done and type of work, clients and other variables at the level of eight industry groups. Therefore, this data has much more detail compared to the three industry subdivisions of Building, Engineering and Construction services used in regular ABS publications, because subdivisions are made up of industry groups.  

 

The first three groups are Residential building, Non-residential building and Heavy and civil engineering, and there are five groups of Construction services: Land development and site preparation services, Building structure services, Building installation services, Building completion services, and Other construction services.

 

In terms of policy and industry development, this detailed data is important because it clearly shows the differences in the characteristics of the industry groups, their clients and sources of income. It will also allow recalculation of construction labour productivity for the different types of work done. 

 

Construction is better viewed as three sub-industries when the differences between Residential building, Non-residential building and Engineering construction are taken into account. These structural differences affect the way clients, contractors, subcontractors, designers and suppliers work and interact, and these ABS subdivisions have their own characteristics and ways of working. For example, house builders have pattern books, commercial building uses architects, and infrastructure is designed by engineers.

 

Industry policies that target Construction will be challenged by sub-industries with limited, though important, similarities, and are unlikely to be relevant across them. The specific nature of the individual subdivisions often makes recommendations and policy directed at Construction as a single industry hard to implement or ineffective, separate policies are required. 

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[1] ABS 8155DO008 Australian Industry 2023-24, ABS 8155DO001 Construction Industry Survey 2011-12. ABS 8772  Private Sector Construction Establishments 2002-03, 1996-97,1988-89,1984-85 and 1978-79. 

The 2002-03 survey used different industry categories and is not comparable with the other surveys. The ABS notes that survey data ‘were understated in the 1978/79 collection as there were significant coverage deficiencies in this survey.’

 

[2] In the US the Bureau of Labor Statistics issued a notice in June 2025 that said CPI collection reduction and suspension affected the Commodity and Services survey and the Housing survey. The ‘BLS makes reductions when current resources can no longer support the collection effort.’  

 

The UK Office of National Statistics published a wrong CPI figure in April 2025 and 

a Systemic Review of ONS Economic Statistics noted  ‘there are widely recognised problems with the Labour Force Survey’ and  ‘resource pressures on economic statistics and on the ONS as a whole have intensified in the last two years.’ In 2014 issues with UK construction data were so serious they led to Construction Output being de-designated as a National Statistic. 

 

 

 

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.

 

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[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.