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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.















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.































About the Blog

This blog is concerned with the organisation of the building and construction industry, in the economic sense of combining factors of production to create output.

 

The modern industry's origins in the 19th century can still be seen in many of its characteristic features, and many contemporary issues are also found in projects from the past.

 

Like many industries, it is being reshaped by unprecedented rapid and widespread advances in materials, technology and capability.

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