Review of Thinking Like an Economist by Elizabeth Pop Berman

 

Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy, by Elizabeth Popp Berman (Princeton, 2022). 

 

The book details how what she calls “the economic style of reasoning,” has become the dominant way of thinking about public policy in the United States. This is usually (almost universally) seen as a result of the movement led by Hayek and the Mont Pelerin Society that became known as neo-liberalism. Instead, Berman argues, “the most important advocates for the economic style in governance consistently came from the center-left.” 

 

In the 1960s two intellectual communities within economics played the crucial role. One was a systems analysis group from RAND Corp. at the beginning of the Kennedy administration. The other was a network of university economists specializing in industrial organization, first at Harvard University and later at the University of Chicago.

 

These economists became key advisors and formulators of policy, introducing cost-benefit analysis and other tools for assessing government policies and raising efficiency above other policy goals. As macroeconomics descended into doctrinal disputes about fiscal and monetary policy in the 1970s, US conservatives turned this into a deregulatory agenda. At the same time institutional economists lost their standing in university departments as the mathematical turn after Samuelson marginalised their work. 

The book records (in great detail) the development of the economic style, how many of its leading advocates came from the Democratic party and the left, and how the right strategically used these ideas to promote policies that turned social, moral and ethical issues into ones about markets, allocation and tax. Highly recommended. 

Australian Built Environment: Output and Employment

 

Industries are groups of firms with common characteristics in products, services, production processes and logistics, subdivided by the SIC into a four-level structure. The highest level is alphabetically coded divisions such as Agriculture, forestry and fishing (A), Manufacturing (C) and Information and communication (J). The classification is then organized into two-digit subdivisions, three-digit groups, and four-digit classes. SIC codes are therefore two, three and four-digit numbers representing industries, defined as firms with shared characteristics.

The SIC definition of the construction industry captures the onsite activities of contractors and subcontractors, and this data on building and construction work is taken to represent the industry. However, onsite work brings together suppliers of services, materials, machinery and equipment, products, components and other inputs required to deliver the buildings and structures that make up the built environment. When enough firms share sufficient characteristics they are often described as an industry cluster or sector.

The data used here is provided in the Australian Bureau of Statistics annual publication Australian Industry (ABS 8155), produced using a combination of data from the annual Economic Activity Survey and Business Activity Statement data provided by the Australian Taxation Office. The data includes all operating business entities and Government owned or controlled Public Non-Financial Corporations. Australian Industry excludes the finance industry and public sectors, but includes non-profits in industries like health and education and government businesses providing water, sewerage and drainage services. The industries included account for around two-thirds of GDP and the data is presented at varying levels for industry divisions, subdivisions and classes. The most recent issue is for 2020-21.

There is data at the two digit subdivision level for the Construction services and Property operators and real estate services industries. For the subdivisions in Professional, scientific and technical services and Building cleaning, pest control and other services the data includes contributions from other classes outside the built environment. Therefore, for these industries the two digit subdivision estimates have to be weighted using the four digit class data for the built environment component. These proportions are released as supplementary tables and provide data at the class level. Professional, scientific and technical services were included in 2015-16, and in 2016-17 this data was provided for two divisions: Rental, hiring and real estate services, with subdivisions Rental and hiring services (except real estate), and Property operators and real estate services; and Administrative and support services, with subdivisions Administrative services and Building cleaning, pest control and other support services.

The data is not complete because some industries cannot be separated into the relevant classes from Australian Industry. For example, rental of heavy machinery and scaffolding (class 6631) is in subdivision 66 but the data is not available to separate it from the other classes. Also, services such as marketing, legal, insurance and financial are important inputs, but again are not identifiable. Government spending on infrastructure and investment in departments like health and education is included through supply industries, although any maintenance and work done internally will generally not be included. That also applies in industries like retailing and transport where some unknown proportion of work is done in-house.

There is also leakage around the boundaries of industry statistics: some glass is used in mirrors, some in car windscreens; textiles are used in buildings; architects design furniture; engineers repair machines as well as structures, and so on. Because Australian Industry uses tax and business register data, it is the self-classification of firms to SIC industry classes that fundamentally determines the structure and scope of that data. Needless to say, such classifications are not perfect, particularly in regard to large multi-unit or multi-divisional organisations. The data here includes sixteen industries that together form one of the largest and most important industrial sectors in the economy.

Table 1. Australian Built Environment Industries

Supply industries Demand industries              Maintenance industries

Quarrying             Residential property Water, sewerage and drainage

Building construction     Non-residential property Waste collection, and disposal

Heavy and civil engineering     Real estate services          Building and industrial cleaning

Construction services                 Building pest control services

Architectural services                 Gardening services

Surveying and mapping services

Engineering design and consulting

Manufacturing industries

Figure 1.

Table 2. Economic Contribution of Australian Built Environment Industries 2020-21

                                                Employment IVA $billion

Total Australian Built Environment Industries 2,228,000 282

Total Australia Employment and GDP              12,369,000 2,069,178

Built Environment share of Australia total          16.9% 13.6%

Sources: ABS 8155, ABS 5206, ABS 6202.

Figure 2.

Figure 3.

Figure 4.

Figure 5.

The IVA of the sixteen built environment industries contributed 13.6 percent to Australian GDP in 2018-19, within a long-run range between 13 and 15 percent of GDP since 2006-07. The sixteen built environment industries share of total employment was 16.9 percent, and its long-run range was between 16.5 and 17.5 percent of total employment.

Figure 6.

Figure 7.

Construction Productivity Trends for Building, Engineering and Construction Services

 Australian Construction Productivity at the Industry Level

 

 

The rate of growth of productivity in the construction industry in a number of countries has lagged that of other industries for at least five decades, and the earliest studies that identified this problem date from the late 1960s. Two explanations for the lack of demonstrable improvement in construction productivity are possible. The first is the importance of measurement, data and issues about the structure and use of price indices for estimating real output (i.e. adjusted for inflation). 

 

The second is the nature of the product and the methods used in delivering and managing the processes involved.  Construction is a labour intensive industry in comparison with manufacturing, but there has been a significant increase in the prefabricated component of construction, which could have been expected to lead to productivity growth. Also, construction methods have become more capital intensive as machinery has got heavier, and the number of cranes, powered hand tools and other equipment used has increased.  However the productivity growth that one would expect to observe as a result of these trends has not occurred, according to measurements by national statistical agencies.

 

Productivity estimates require both a measure of labour inputs, such as hours worked or people employed, and a measure of output, called Industry value added (IVA, the difference between total revenue and total costs). IVA is then adjusted for changes in prices of materials and labour to estimate Gross value added (GVA) using price indexes that assume there has been no change in the quality of buildings. Another problem is the application of a single deflator to the diverse range of buildings and structures. This inability to capture functional differences and quality changes in buildings and structures has adversely affected the measurement of productivity, if construction value added is underestimated due to the deflators used, construction productivity has also been understated.

 

This post compares the deflated GVA per person employed to the IVA per person employed for Building, Engineering and Construction services (the trades), and Total construction. The GVA data comes from the ABS National Accounts (chain volume measures of economic activity). The IVA data and number of people employed in June each year comes from ABS Australian Industry. 

 

 

A Proxy for Construction Productivity

 

In Figure 1 industry output is in constant dollars (the deflated value adjusted for price changes). GVA is the quantity of output produced in a year. The employment data includes all workers but not whether they are full or part-time, or hours worked. 

 

Figure 1. Construction Productivity by Industry

Source: ABS, CER

 

As a measure of productivity GVA per person employed is very approximate, typically the number of hours worked would be used for employment and June may not be a representative month for employment in many industries. Nevertheless, this graph looks familiar, with flatlining growth in Total construction productivity over the period, despite a few bumps along the way. It appears to be a useful productivity proxy. 

 

Using the same data, GVA per person employed can be found for Building, Engineering and Construction services. Here a slight decline in Building has been offset by a small rise in Construction services output per person, with the effects of the pandemic on both apparent in the decline over 2020-21. Building construction may have been affected by a shift from commercial to an increased share of residential in the output mix and more high rise work. Because Construction services are generally labour intensive they will have a lower value of output per person, but this data shows there was increase in this measure of productivity between 2007 and 2021 and Construction services was the only one of the three industries to register a gain on this measure. 

 

Engineering construction activity took off in the mining boom from 2010, and output per person has followed the rise and fall in work done since and, although below the peak years of 2012-14, it now reflects the large volume of infrastructure work in transport and energy. Since 2011 GVA per person in Engineering has been much higher than Building construction, nearly twice as much in some years, and Construction services, nearly three times as much in some years. 

 

These differences in output per person employed reflect differences in capital requirements and expenditure on purchases of buildings, structures, software, equipment and machinery (known as gross fixed capital formation or GFCF). The higher the capital requirements, or capital intensity, of an industry the higher the level of output per person employed is expected to be, because workers with more capital are more productive. Both excavators and shovels require one operator but the former shifts more soil.

 

 

Current Dollar Industry Comparison 

 

The chain volume measure of GVA per person employed can be compared to the original, unadjusted current dollar Industry value added (IVA) per person employed. Again, this is an indicative but imprecise proxy for construction productivity. In Figure 2 there is a clear upward trend in all three industries, with increasing nominal value of output as prices rise faster than the number of people employed. 

 

The growth in IVA per employee for Building is the greatest contrast to the GVA data. Here, Building has had a sustained increase since 2012 compared to the flat, no growth trend in GVA per employee. This suggests there has been a better productivity performance by building contractors than the one recorded in official statistics. 

 

Engineering has a similar pattern in both GVA and IVA graphs, with a sharp rise in output per employee after 2010 that flattened out after 2016 at around 50 per cent higher than the pre-mining boom level. This has been a significant increase in productivity. Both Building and Engineering typically have larger firms than found in Construction services, which has lagged the other two industries in growth in IVA per employee. 

 

Without deflation the value of output could be expected to rise somewhere around the rate of CPI inflation, which totalled 35.8 per cent and averaged 2.2 per cent a year between 2007 and 2021. Over that period Building IVA increased by 120 per cent, Engineering IVA by 117 per cent, and Construction services by 50 per cent. More significantly, IVA per person employed for Building increased by 61.6 per cent, for Engineering by 57.3 per cent, but for Construction services only 27.7 percent, suggesting that is where the productivity ‘problem’ lies. However, the IVA and GVA figures are contradictory, with the latter showing better performance. 

 

 

Figure 2. Nominal output per employee

Source: ABS, CER

 

IVA per employee again highlights differences in the capital requirements of industries. In the long run, investment in GFCF determines industry growth rates and their level of labour productivity. Labour intensive industries like Construction services have a low level of IVA per person employed, but also have lower capital requirements. Engineering has always been more capital intensive than Building, but the gap seems to have closed with the increase in residential high-rise activity after 2016. 

 

Conclusion

 

Construction productivity estimates are usually given for Total construction, and typically show little or no growth over many decades. However, Total construction is measure of the combined performance of three different industries: Building, Engineering and Construction services. This post compared the deflated GVA per person employed to the nominal IVA per person employed for Building, Engineering and Construction services (the trades), and Total construction.

 

The deflated GVA per person employed data is a proxy for productivity because the value of output is adjusted for price changes, As a combination of deflated output and employment GVA per person employed looks like a measure of productivity, but while it is indicative that is not really the case. Although similar to the output and input data needed to calculate productivity, indexes of output and input are used for productivity analysis, not the original data, and hours worked not numbers employed used. 

 

When the mostly flat chain volume measures of GVA per person employed are compared to the current dollar IVA per person employed there is a clear upward trend in IVA all three industries, with increasing nominal value of output as prices rise faster than the number of people employed. IVA per person in Building and Engineering has increased at nearly twice the rate of CPI inflation, but Construction services by less since 2007. 

 

Construction services IVA per person employed grew significantly less than Building and Engineering. However, the GVA per person employed performance was much better, the only one of the three industries to register a gain on this measure. Construction services have a large impact on productivity because they account for 60 per cent or more of Construction output. 

 

The usefulness of both GVA and IVA per person employed as a proxy for productivity per person is limited, but indicative. In both cases the difference in capital intensity appears to be the determining factor in the level of productivity (measured as dollars per person employed), and the increase in apartment building would explain the rapid rise in Building IVA per person employed. The effect of changes in output (the mix of buildings and structures delivered) will be explored in another post. Why that increase in Building IVA per person employed was not picked up in the GVA per person employed estimates is also an interesting question. 

Employment Trends in Australian Built Environment Industries

 Record High in Built Environment Employment

The number of people employed in the 16 industries that make up the Australian Built Environment Sector reached 2.23 million in 2020-21, an increase of nearly 10 percent over the previous year, contributing 17 percent to total employment in Australia. 

Figure 1

The largest industry is Construction, which employed 1.2 million people (54%), followed by Property and real estate with 333,000 (15%), Professional services 269,000 (12%) and Building services 206,000 (9%). These four industries include a dozen smaller industry groups, and account for 90 percent of persons employed in construction and maintenance of Australia’s built environment. 

 

Figure 2

The big increase in 2021 was a rebound after the 1.3 percent fall in total BES employment in 2019-20. In all industries, with the exception of Water and Waste, employment fell in 2020, and by over three percent in Property and real estate services. In the post-lockdown recovery employment growth in 2020-21 was strong, at over eight percent in Construction and over six percent in both Building services and Professional services. 

 

Figure 3

In the decade from 2007 to 2017 there was a small increase in total built environment employment, however the rate of employment growth since 2018 has been much stronger. The only industry that has not increased employment is Property and real estate services, but in 2020-21 the other industries all had record numbers of people employed after a significant increase in employment. However, this was an unusually large upturn and much larger than the annual increase in output for these industries. 

 

Figure 4

The average growth rate of total employment in the five years to 2021 has been one percent higher than the 15 year average, at 2.5 percent a year. The highest 5 year average rates of growth in employment were five percent a year in the combined Water supply, sewerage and drainage services and Waste collection, treatment and disposal services, and over four percent a year in Professional services. Also of note is the growth in manufacturing employment after a decade of decline. 

 

Figure 5

The Australian Built Environment Sector

 

The Australian Built Environment Sector uses data provided in the Australian Bureau of Statistics annual publication Australian Industry, produced from a combination of directly collected data from the annual Economic Activity Survey conducted by the ABS, and Business Activity Statement data provided by businesses to the Australian Taxation Office. The data includes all operating business entities and Government owned or controlled Public Non-Financial Corporations. Australian Industry excludes the finance industry and public sector, but includes non-profits in industries like health and education and government businesses providing water, sewerage and drainage services. The industries included account for around two-thirds of GDP. Industries are groups of firms with common characteristics in products, services, production processes and logistics.

 

Figure 6

Data on the construction industry captures the onsite activities of contractors and subcontractors. However, onsite work brings together suppliers of materials, machinery and equipment, products, components and other inputs required to deliver the buildings and structures that make up the built environment. Consultants provide professional services such as design, engineering, urban planning, cost planning and project management as inputs into building and construction projects. There are also inputs from transport, finance and legal services, although data for these services is not available. 

 

Other industries like tourism and defence are structured around such value chains and production networks, and when firms from different industries share sufficient characteristics they are described as an industry cluster or sector. In the case of tourism an annual satellite account that combines the industries involved is produced by the ABS.

 

Table 1. Industries included in the Australian Built Environment Sector

Supply industries	Demand industries	Maintenance industries
Non-metallic mining and quarrying	Residential property	Water, sewerage and drainage
Building construction	Non-residential property	Waste collection, and disposal
Heavy and civil engineering	Real estate services	Building and industrial cleaning
Construction services		Building pest control services
Architectural services		Gardening services
Surveying and mapping services
Engineering design and consulting
Manufacturing industries

 

 

Comparisons of Construction to Manufacturing Use Flawed Data

 

Construction productivity has been negatively compared with manufacturing (e.g. McKinsey), and the comparisons are typically between all of construction and all of manufacturing. The problem is that both are averages of extremely varied economic activities of firms, based on data collected by the standard industrial classification (SIC) system. This makes useful comparisons between the two difficult, as this post using UK data argues. The post first breaks down industry statistics on UK construction and manufacturing to show the structural differences, and then compares construction to the car industry, showing a comparison between the two requires including repair and maintenance with vehicle manufacture. Lessons from other industries and their production methods and processes can be useful and informative, however, comparing performance between industries is very difficult without adjustments to make the subjects comparable.

 

The production of building elements and components somewhere other than the construction site has been variously called prefabrication, pre-cast and pre-assembly construction, and offsite manufacturing (OSM). The degree of OSM and preassembly varies from basic sub-assemblies to entire modules, and the use of OSM varies greatly from country to country. Types of offsite construction are panelised systems, volumetric systems with partial assembly of rooms, units or pods offsite, and factory built modular components or homes. Offsite manufacture is used to describe factory production and preassembly of components, elements or modules. Prefabrication is used to describe offsite production of components that are installed onsite. The idea that OSM and prefabrication are the solution to problems of poor quality and low productivity in construction became central to the movement to ‘reform’ construction by making it more like manufacturing.

 

Advocates of industrialized building argued for construction to adopt similar production practices to manufacturing, particularly car manufacturing. However, while there are some factory made buildings, the number and type of standardized buildings is limited, whereas opportunities for producers of standardized construction products are widespread. Onsite production is organized around those standard parts and materials but manufacturing, in contrast, is organized around standardised products and continuous production runs. 

 

In UK construction the largest grouping by number of enterprises and employment is specialised construction, typically single trade contractors (there are 17 individual industries or trades under SIC 43). The largest group by turnover is building contractors, including residential and non-residential building with only two SIC sub-categories. Civil engineering contractors have the smallest number of enterprises and employment but the highest average number of employees and highest average turnover per enterprise. Civil engineering work is typically of larger scale compared to building work.

 

Table 1. UK Construction turnover 2019

Source:  Meikle, J. and de Valence, G. 2022. Construction products and producers: One industry or three, in Best, R. and Meikle, J. (eds.) Describing Construction: Industries, projects and firms, London: Taylor and Francis. Data from ONS Annual Business Survey 2018.

 

Data on construction turnover by size of firm includes the value of subcontracting and construction work by non-contractors. The distribution of construction turnover by number and size of firm and average turnover per firm is: 99% of construction firms have less than 50 employees and are responsible for just over 50% of turnover; and 94% of firms have less than 10 employees and are responsible for around 35% of turnover. At the other end of the size scale, less than 1% of firms, those with 50 or more employees, are responsible for the other 50% of turnover. Around 0.1%, a few hundred, are responsible for around 30% of turnover and each of these has an annual turnover averaging around £275 million. The structure of the construction typically takes this form.   

 

Table 2. Construction firms by employment 2019

Source:  Meikle, J. and de Valence, G. 2022. Construction products and producers: One industry or three, in Best, R. and Meikle, J. (eds.) Describing Construction: Industries, projects and firms, London: Taylor and Francis. Data from ONS Annual Business Survey 2018.

 

Although the SIC groups all construction firms into a single category, that is for statistical convenience based on conventions developed originally for classifying manufacturing. The exclusion of design from construction output while included in manufacturing and the inclusion of R&M in construction but not in manufacturing is one result.[i] Another is the view of construction as a single industry, producing and maintaining buildings and structures, despite their many different types and the differences in the producers and processes used in their delivery. 

 

Manufacturing in the UK comprises 24 two-digit industrial groups (SIC 10 to SIC 33), for example, food products (SIC 10), manufacture of paper and paper products (SIC 17) and manufacture of motor vehicles, trailers and semi-trailers (SIC 29); and 325 individual industries.  Manufacturing of fabricated metal products except machinery and equipment (SIC 25) is the largest two-digit group with 22 individual industries, 26,301 total group enterprises and total group turnover of  £23.6 billion; the smallest is the single industry group of manufacture of tobacco products (SIC 12) with nine enterprises and a turnover of £12 million.  Manufacturing is not only relatively large but extremely diverse and industry policies have reflected that by targeting specific industries such as IT and automobiles for example.

 

The table below shows that total UK Construction turnover is less than 50% of Manufacturing turnover, although it is much larger than any individual manufacturing industry.  Manufacturing has 21% of firms that are small and medium size, construction has 6%, and manufacturing turnover is more concentrated in the larger firms.

 

 

Table 3. UK construction and manufacturing compared by size of firm

Source: Meikle, J. and de Valence, G. 2022. Construction products and producers: One industry or three, in Best, R. and Meikle, J. (eds.) Describing Construction: Industries, projects and firms, London: Taylor and Francis. Data from ONS Annual Business Survey 2018.

 

The largest UK manufacturing industry in 2018 was motor vehicles, with 22% of construction turnover and 5.5% of construction employment, and it is manufacture of motor vehicles that is often compared with construction and used as the example to be followed in OSM. Based on turnover per employee (an imperfect but indicative measure of productivity), vehicle manufacturing (&07,965) is over three times as productive as construction (197,902). This might be the case, or it may be a statistical illusion, created by the framework of the SIC.

 

 

Table 4. Comparing UK construction and vehicle manufacture 2018

Source: Meikle, J. and de Valence, G. 2022. Construction products and producers: One industry or three, in Best, R. and Meikle, J. (eds.) Describing Construction: Industries, projects and firms, London: Taylor and Francis. Data from ONS Annual Business Survey 2018.

 

 

Table 5 breaks down construction to its main components and adjusts manufacturing by including both the manufacture and repair and the maintenance of motor vehicles.  All construction includes both new construction and the repair and maintenance of existing buildings and works. The manufacture of motor vehicles does not. In order to adjust for this, maintenance of vehicles (SIC 45.2) should be added to manufacture of vehicles (SIC 29.1) to make the groups more comparable. When vehicle maintenance is added to manufacture, turnover increases by 58% but employment increases by almost 180%.  

 

This allows a more realistic comparison and reveals that motor vehicles and their maintenance (SIC 29.1 plus SIC  45.2) has almost the same turnover per worker  (1.6mn) as building construction (1.4mn), twice that of specialist construction (0.9mn) but less than engineering construction (2.1mn).  Turnover per worker is a metric of productivity and, on this basis, all construction is less productive than all manufacturing and much less productive than motor vehicle production. However, when repair is added to manufacture, the car industry is on a par with building, the largest part of construction. 

 

 

Table 5. Turnover and employment by SIC division 2018

Source:  Meikle, J. and de Valence, G. 2022. Construction products and producers: One industry or three, in Best, R. and Meikle, J. (eds.) Describing Construction: Industries, projects and firms, London: Taylor and Francis. Data from ONS Annual Business Survey 2018.

 

With the differences in these industries in terms of firm size, turnover and employment, it is difficult to draw clear conclusions from a comparison of their structure, economic performance or productivity. Vehicle manufacture and, to a lesser extent vehicle repair and maintenance, are capital intensive businesses. Construction, generally, is not, although a few activities like tunnelling and prefabricated housing are. Comparisons between manufacturing and construction based on the figures from the SIC are not helpful or accurate without adjustment.   

 

Nevertheless, on the basis of these comparisons, for the last three decades advocates for applying production methods from car manufacturing to offsite manufacturing in construction have argued this is necessary to improve construction productivity and products. Despite the distinctly different characteristics of manufacturing and construction there have been and are many attempts to industrialize construction. However, after decades of efforts to promote OSM, the market share of OSM remains small, estimates are low single digits of total construction work in the UK, US and Australia. Success elsewhere is restricted to specific markets such as fast food outlets and hotels, or house manufacturers like the Japanese and Scandinavian firms Sekisui and Ikea. 

 

The US and UK governments have both supported OSM, with the UK government funding research, publishing case studies and promoting OSM in construction for decades.[i] In the US a Technology Roadmap for Advanced panelised construction was produced in 2003 for the Department of Housing and Urban Development as a Partnership for Advanced Technology in Housing (PATH[ii]). Despite these efforts, offsite production is not industry practice in either country. Although pre-cast concrete and panelised construction are widely used, OSM has not led to significant advances in mechanization or required a thorough reorganization of project management methods.  

 

OSM markets exist mainly in housing and institutional building, wherever it is the most effective or efficient piece of technology available and there is a lot of repetition from project to project. This manufacturing-centric view of progress in construction, endorsed by numerous government and industry reports, was the end point of the development trajectory from the first to the third industrial revolutions. Despite all efforts this has not become the primary system of construction of the built environment because OSM does not deliver a decisive advantage over onsite production for the great majority of projects. Instead, construction has a deep, diverse and specialised value chain that resists integration because it is flexible and adapted to economic variability.

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[i] Farmer, M. 2016. Modernise or die, London: Construction Leadership Council.

[ii] PATH, 2004. Technology Roadmap: Advanced panelised construction, 2003 Progress Report. Partnership for Advanced Technology in Housing (PATH), Department of Housing and Urban Development, Office of Policy Development and Research, Washington, D.C.

[i] Despite the importance of repair and maintenance, only Canada has an annual business capital and repair expenditures survey. Between 2006 and 2016 construction R&M by firms averaged nine percent of their total capital expenditure, or around 1.2 percent of GDP, ranging between one percent of GDP in 2006 and 1.3 percent in 2012. Statistics Canada. Table: 34-10-0035-01 Capital and repair expenditures, non-residential tangible assets