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8772.0 - Private Sector Construction Industry, Australia, 2011-12 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 27/06/2013   
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EXPLANATORY NOTES

Classifications
Scope
Coverage
Definition of key terms
Survey design
Data comparability
Further information

INTRODUCTION

1 This publication presents estimates of the economic and financial performance of the Construction industry for 2011-12. This is the sixth time the ABS has conducted the survey. Previous statistics were released for 1978-79, 1984-85, 1988-89, 1996-97 and 2002-03. The primary purpose of these estimates is to present detailed information on the financial performance and type of activity of businesses primarily engaged in the provision of Construction activity.


Reference period

2 The period covered by the collection is intended to be the 12 months ended 30 June. Where businesses are unable to supply information on this basis, an accounting period for which data can be provided is used for data other than that relating to employment. Such businesses make a substantial contribution to some of the estimates presented in this publication. As a result, the estimates can reflect trading conditions that prevailed in periods outside the twelve months ended June in the relevant year.

3 Although financial data estimates relate to the full 12 months, employment estimates relate to the last pay period ending in June of the given year. As a result, estimates of wages and salaries per person employed can be affected by any fluctuations in employment during the reference period.

4 Financial data presented incorporate all units in scope of the Construction collection that were in operation at any time during the year. They also include any temporarily inactive units, i.e. those units which were in the development stage or which were not in production, but which still existed and held assets and liabilities and/or incurred some non-operating expenses (e.g. depreciation, administration costs).


CLASSIFICATION

5 The businesses that contribute to the statistics in this publication are classified by:

SCOPE

6 The scope of the collection was all employing and non-employing private and public trading sector businesses on the ABS Business Register, classified to Division E - Construction - of the Australian and New Zealand Standard Industrial Classification (ANZSIC). ANZSIC Division E consists of businesses mainly engaged in:
  • Residential building construction (ANZSIC Classes 3011 and 3019) - businesses mainly engaged in the construction of houses or residential buildings, or in carrying out alterations, additions or renovations or in organising or managing these activities.
  • Non-residential building construction (ANZSIC Class 3020) - businesses mainly engaged in the construction of non-residential buildings such as hotels, motels, hostels, hospitals, prisons or other buildings, in carrying out alterations, additions or renovations to such buildings, or in organising or managing these activities.
  • Heavy and civil engineering construction (ANZSIC Classes 3101 and 3109) - businesses mainly engaged in the construction or general repair of roads, bridges, aerodrome runways, parking lots, railway permanent way, dams, irrigation systems, harbour or river works, water or gas supply systems, oil refineries, pipelines or construction projects not elsewhere classified, in the on-site assembly of furnaces or heavy electrical machinery from prefabricated components or in the general repair of such structures, machinery or equipment or in organising or managing these activities.
  • Construction services (ANZSIC Classes 3211 and 3212, 3221 to 3224, 3231 to 3234, 3239, 3241 to 3245, 3291, 3292 and 3299) - businesses mainly engaged in providing special building or construction trade services, such as land development and subdivision, site preparation services, concreting services, bricklaying services, roofing services, structural steel erection services, plumbing services, electrical services, air-conditioning and heating services, fire and security alarm installation services, other building installations services, plastering and ceiling services, carpentry services, tiling and carpentry services, painting decorating services, glazing services, landscaping services, hire of construction machinery and other construction services n.e.c.

7 Businesses were only included in the scope of the collection if their turnover exceeded a threshold level, or the business was identified as being an employing business (based on ATO information), as at the end of the reference period. Turnover thresholds were set for each ANZSIC class so that the contribution of businesses in the scope of the collection accounted for approximately 97.5% of total industry class turnover as determined by Business Activity Statement (BAS) data.

8 The scope of the collection excludes entities classified to SISCA Sector 3 General government. Government-owned or controlled Public Non-Financial Corporations are included.

9 The scope excluded activity undertaken by private individuals for their own use.

COVERAGE

10 This section discusses frame, statistical units, coverage issues and improvements to coverage.


Frame

11 Businesses contributing to the estimates in this publication are sourced from the ABS Business Register (ABSBR), which has two components as described below.


Statistical Units

12 The ABS uses an economic statistics units model on the ABSBR to describe the characteristics of businesses, and the structural relationships between related businesses. Within large and diverse business groups, the units model is also used to define reporting units that can provide data to the ABS at suitable levels of detail.

13 In mid 2002, the ABS commenced sourcing its register information from the ABR and at that time changed its business register to a two population model. The two populations comprise what is called the Non-Profiled Population and the Profiled Population. The main distinction between businesses in the two populations relates to the complexity of the business structure and the degree of intervention required to reflect the business structure and the degree of intervention required to reflect the business structure for statistical purposes.

Non-Profiled Population

14 The majority of businesses included on the ABS Business Register are in the Non-Profiled Population. Most of these businesses are understood to have simple structures. For these businesses, the ABS is able to use the ABN as the basis for a statistical unit. One ABN equates to one statistical unit.

Profiled Population

15 For a small number of businesses, the ABN unit is not suitable for ABS economic statistical purposes and the ABS maintains its own units structure through direct contact with businesses. These businesses constitute the Profiled Population. This population consists typically of large or complex groups of businesses. The statistical units model below caters for such businesses:
  • Enterprise group: This is a unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991), including legal entities such as companies, trusts and partnerships. majority ownership is not required for control to be exercised.
  • Enterprise: The enterprise is an institutional unit comprising:
      • a single legal entity or business entity, or
      • more than one legal entity or business entity within the same enterprise group and in the same institutional subsector (i.e. they are all classified to a single Standard Institutional Sector Classification of Australia (SISCA) subsector).
  • Type of activity (TAU): The TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an enterprise group that can report production and employment data for similar economic activities. When a minimum set of data items is available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the ANZSIC). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry subdivision.
Coverage issues

16 The ANZSIC-based industry statistics presented in this publication are compiled differently from activity statistics. Each ABN unit or TAU on the ABSBR has been classified (by the ATO and the ABS respectively) to a single predominant industry class irrespective of any diversity of activities undertaken. A Construction business is one predominantly engaged in construction activities, but the data collected for it cover all activities of the business (including any non-construction activities). Conversely, there are some businesses predominantly engaged in non-construction activities which also undertake limited construction activities; these are excluded from the Construction statistics collection.

17 The ABS attempts to maintain a current understanding of the structure of the large, complex and diverse business groups that form the ABS maintained population on the ABSBR, through direct contact with those businesses. Resultant changes in their structures on the ABSBR can affect:
  • the availability of such businesses (or units within them) for inclusion in the annual economic collections,
  • the delineation of the units, within those groups, for which data are to be reported.

18 The ABS attempts to obtain data for those businesses which ceased operation during the year, but it is not possible to obtain data for all of them.


Improvements to coverage

19 Data in this publication have been adjusted to allow for lags in processing new businesses to the ABSBR, and the omission of some businesses from the register. The majority of businesses affected, and to which the adjustments apply, are small in size. As an example, the effect of these adjustment is generally 4% or less for most ANZSIC industry divisions and for most states and territories.

20 For more information on these adjustments, please refer to the ABS publication Information Paper: Improvements to ABS Economic Statistics, 1997 (cat. no. 1357.0).


DEFINITION OF KEY TERMS

21 Selected key terms are described below.


Industry performance measures

22 This publication presents a wide range of data that can be used to analyse business and industry performance.

23 Differences in accounting policy and practices across businesses and industries can lead to some inconsistencies in the data input to the statistics. Although much of the accounting process is subject to standards, there is still a great deal of flexibility left to managers and accountants in the accounting policy and practices that they adopt. For example, the way profit is measured is affected by management policy about such issues as depreciation rates, bad debt provisions and write off, and goodwill write off. The varying degree to which businesses consolidate their accounts may also affect any industry performance measures calculated.

24 The above limitations are not meant to imply that analysis based on these data should be avoided, only that they should be borne in mind when interpreting the data presented in this publication.


Australian International Financial Reporting Standards

25 The new Australian International Financial Reporting Standards (AIFRS) were progressively implemented in Australia from 1 January 2005. As a result, a number of items in the financial accounts of Australian businesses have been affected by changed definitions, which have in turn affected both Income Statements and Balance Sheets. A range of ABS economic collections source data from financial accounts of businesses, and use those data to derive economic statistics. There have been no changes in the associated economic definitions.

SURVEY DESIGN

26 The frame (from which the sample was selected) was stratified using information held on the ABSBR. Businesses were then selected from the frame using stratified random sampling techniques. A sample of 3,524 businesses classified to the Construction industry division was selected for the survey. Each business was asked to provide data sourced primarily from financial statements, mainly by mail out questionnaires. Businesses were also asked to supply key details of their operations by state and territory, enabling production of the state/territory estimates.


State and territory estimates

27 State and territory summary estimates are presented in this publication. To enable the production of these estimates, businesses included in the mail out survey were asked to report data for employment, income from sales of goods and services, wages and salaries, and total expenses, for each state and/or territory in which they operated, if more than one. The relevant data for all other businesses, including those whose contribution was sourced from BAS data, were allocated to their state/territory of operations as recorded on the ABSBR.


Effects of rounding

28 Where figures have been rounded, discrepancies may occur between totals and the sums of the component items.

29 Proportions, ratios and other calculated figures shown in this publication have been calculated using unrounded estimates and may be different from, but are more accurate than, calculations based on the rounded estimates.


DATA COMPARABILITY

Comparison with other ABS statistics

30 Key annual industry data for ANZSIC Subdivisions 30 Building construction, 31 Heavy and civil engineering construction and 32 Construction services are published in Australian Industry (cat. no. 8155.0). There are important differences between statistics published in Australian Industry and Private Sector Construction Industry publications. Construction Industry Survey was partially integrated with Division E (Construction) in Australian Industry for 2011-12. Partial integration means that the different sample sizes have been used for producing the Construction Survey and Australian Industry estimates. Different sample sizes have resulted in minor variations between estimates due to presence of sampling error. Users should exercise caution when making comparisons between the two sets of estimates.

31 In some cases estimates provided in this publication may differ slightly from those from other sources. These differences may be the result of sampling or non-sampling error, or may result from differences in scope, coverage, definitions or methodology i.e. businesses in the bottom 2.5 percentile of BAS sales are excluded, this has a significant impact on businesses counts in Construction, where 30% of non-employing businesses are part of the bottom 2.5 percentile.

FURTHER INFORMATION

32 A range of further information is available, as described below.


Related publications

33 The following ABS publications present economy wide and industry specific data:

Other information available

34 The ABS also issues a daily Release Advice on the web site which details products to be released in the week ahead.

35 Inquiries should be made to the National Information and Referral Service on 1300 135 070.


Acknowledgement

36 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated; without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


Use of Australian Taxation Office (ATO) data in this publication

37 The results of these studies are based, in part, on tax data supplied by the ATO to the ABS under the Income Tax Assessment Act 1936, which requires that such data are only used for statistical purposes. No individual information collected under the Census and Statistics Act 1905 is provided back to the ATO for administrative or regulatory purposes. Any discussion of data limitations or weaknesses is in the context of using the data for statistical purposes, and is not related to the ability of the data to support the ATO's core operational requirements.

38 Legislative requirements to ensure privacy and secrecy of these data have been followed. Only people authorised under the Australian Bureau of Statistics Act 1975 have been permitted to view data about any particular organisation and/or persons in conducting these analyses. No information about individual taxpayers (persons) has been released to the ABS. Aggregated personal income tax data are confidentialised by the ATO before release to the ABS. In accordance with the Census and Statistics Act 1905, results have been confidentialised to ensure that they are not likely to enable identification of a particular person or organisation.


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