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.