Monday, 17 July 2017

The Australian Built Environment Sector

The Economic Contribution of the BES



The Australian Bureau of Statistics publication Australian Industry (ABS 8155) uses a wide sample of private sector firms and non-profit organizations to get financial data on balance sheet items. This is the modern approach to national statistics, accessing and organizing data from a range of sources, mostly digital. As explained by the ABS:

This publication presents estimates of the economic and financial performance of Australian industry in 2015-16. The estimates are produced annually using a combination of directly collected data from the annual Economic Activity Survey, conducted by the Australian Bureau of Statistics, and Business Activity Statement data provided by businesses to the Australian Taxation Office.

Australian Industry provides a useful data set to compare industries with, and to compare sectors (called divisions and subdivisions) within industries. The data excludes the public sector but includes non-profits in industries like health and education, which are combined with private sector businesses to get a total for the non-government part of the economy.

Figure 1 shows the Total All Selected Industries and the Construction industry’s share for three of the data series produced: employment; wages and salaries; and industry value added, a measure of output. In 2015-16 Construction employed 1.04 million people, 9.7 per cent of the total, paid 11.3 per cent of total wages and salaries, and contributed 10 8 per cent to the output of the non-government sector.

Figure 1. Construction Share of Industry Output and Employment


The building and construction work done and output statistics capture the on-site activities of contractors and subcontractors. The construction industry, however, has an important role linking suppliers of materials, machinery, products, services and other inputs to the public and private clients on the demand side. These two views have been called broad and narrow, with the narrow industry defined as on-site work and the broad industry as the supply chain of materials, products and assemblies, and professional services. Production of the built environment, how it is created and maintained through project initiation, design, fabrication and construction to operation, repair and maintenance, requires a deep and dense network of firms. With the property and real estate industries on the demand side, these firms make up the built environment sector.

Employment and value added data from Australian Industry 2015-16 is provided at three levels, for industries, divisions and subdivisions. Construction data is at the two digit division level, but data on Manufacturing and Professional and technical services is given at the three digit sub-division level. This allows the contribution to the built environment sector of relevant parts of those industries to be identified. After combining the on-site work done by contractors and sub-contractors with manufacturing, property and real estate services, professional services and quarrying, the built environment sector accounts for 16.4 per cent of total employment and 21 per cent of output, measured as industry value added, of the Australian non-government sector.

The idea that the construction industry, as measured in the national accounts, is only one part of the creation and maintenance of the built environment recognizes the industry’s extensive linkages with other sectors. Through those linkages the impact of construction activities on other parts of the economy is much greater than their direct contribution.

The on-site work done by contractors and subcontractors is only around half the total economic contribution of the built environment sector when downstream suppliers and the property and real estate industries on the demand side are added. 

Table 1. Australian Built Environment Sector
2015-16
Employment
Value Added
Employment
Value Added
Industry
Number
$mn
Number
$mn
30 Building construction
206,000
27,319


31 Heavy and civil engineering construction
121,000
21,156


32 Construction services
713,000
68,222


Total construction
1,040,000
116,697
1,040,000
116,697





6921 Architectural services
40,153
3,942


6922 Surveying and mapping services
15,853
1,872


6923 Engineering design and engineering consulting
132,498
17,889


6924 Other specialised design services
30,479
2,384


Total professional, scientific and technical services
218,983
26,087
218,983
26,087





1331 Textile floor covering manufacturing
1,470
205


1491 Prefabricated wooden building manufacturing
753
77


1492 Wooden structural fittings and components
23,752
2,160


1493 Veneer and plywood manufacturing
825
88


1916 Paint and coatings manufacturing
6,853
1,103


2010 Glass and glass product manufacturing
9,085
1,358


2021 Clay brick manufacturing
1,999
433


2029 Other ceramic product manufacturing
1,944
175


2031 Cement and lime manufacturing
3,229
1,191


2032 Plaster product manufacturing
1,548
290


2033 Ready-mixed concrete manufacturing
8,359
1,311


2034 Concrete product manufacturing
7,388
793


2221 Structural steel fabricating
18,676
1,761


2222 Prefabricated metal building manufacturing
5,384
626


2223 Architectural aluminium product manufacturing
15,938
1,486


2224 Metal roof and guttering manufacturing
3,631
362


2229 Other structural metal product manufacturing
8,580
814


2452 Space heating, cooling and ventilation equipment
5,135
645


2462 Mining and construction machinery manufacturing
8,195
1,008


Total manufacturing
132,744
15,886
132,744
15,886





67 Property operators and real estate services
345,000
66,382
345,000
66,382
09 Non-metallic mineral mining and quarrying
12,000
2,476
12,000
2,476





Total Australian built environment sector


1,748,727
227,528
Per cent of all industries


16.4
21.0
Total all industries


10,678,000
1,083,865
Source: Australian Industry ABS 8155.




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