8731.0 - Building Approvals, Australia, May 2004  
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Feature Article - Focus on the Queensland Construction Industry


This feature article is only published electronically on the website and relates to the publication Building Approvals, Australia (cat. no. 8731.0), May Issue 2004.


DEFINING THE CONSTRUCTION INDUSTRY

The construction industry consists of those businesses engaged mainly in the construction of residential and non-residential buildings (including alterations and additions), engineering structures and related trade services. This includes, for example, the construction of dwellings and recreational facilities, schools and hospitals, and infrastructure for transport, water and electricity supply and telecommunications.

Division E of the Australian and New Zealand Standard Industry Classification (ANZSIC) is devoted to the Construction industry and is subdivided into General construction and Construction trade services. General construction includes Building construction, which incorporates Residential building (houses, flats etc.), Non-residential building (offices, shops, hotels etc.) and Non-building or Engineering construction (roads, bridges etc.). Construction trade services includes Site preparation services and Building structure services (bricklaying, concreting etc.), Installation trade services (plumbing, electrical etc.), Building completion services (painting and decorating, glazing etc.) and Other construction services (landscaping etc.).

CONTRIBUTION TO GROSS STATE PRODUCT

In 2002-03 the Construction industry in Queensland contributed 7.7% to the Gross State Product (GSP), making it the fourth largest industry behind Manufacturing (9.9), Property and business services (9.2%), and Mining (7.7%). Nationally, construction contributed an estimated 6.7% to Gross Domestic Product (GDP) in 2002-03.

The impact on the Construction industry of the introduction of The New Taxation System in July 2000 can be seen in graph 1. There was an increase in construction activity in 1999-2000 as work was brought forward prior to the introduction of The New Tax System, followed by a larger downturn in 2000-01 after its implementation. The First Home Owner Grant (FHOG) and the Commonwealth Additional Grant (CAG) coincided with a recovery in construction activity from 2000-01.

Graph 1 shows that the Construction industry in Queensland contributed to GSP at a higher level for the five year period than the contribution of the Australian Construction industry to GDP. In 2002-03, the Queensland Construction industry's contribution to GSP reached its highest level for the last five years.

GRAPH 1. CONTRIBUTION OF CONSTRUCTION TO GSP AND GDP
Graph: Contribution of Construction to GSP and GDP, Qld.

ACTIVITY

The value of construction activity in Queensland, in current price terms, rose from $10,795.8 million in 1998-99 to $14,442.4 million in 2002-03, an increase of 33.8% over the five year period. Growth in the value of the construction activity in Queensland during this period was similar to the Australian level (up 31.9%).

GRAPH 2. TOTAL CONSTRUCTION ACTIVITY, Value of Work Done - Qld.
Graph: Total construction activity, value of work done, Qld.



Movement in the value of construction activity in Queensland over the five years from 1998-99 to 2002-03 was driven mainly by Residential building. The value of Residential building activity rose from $3,572.9 million in 1998-99 to $6,426 million in 2002-03, an increase of 79.9% ($2,853.1 million), compared to the Australian increase of 54.1%. Over this five year period, the value of work done on Houses in Queensland increased 76.8% ($2,011.1 million), while the value of work done on other residential building rose 88.3% ($842.1 million). In 2002-03, Residential building activity accounted for 44.5% of total construction activity in Queensland, equal to the Australian level.

After Residential building, Engineering construction experienced the next largest increase in value from 1998-99 to 2002-03. Over the five year period the value of Engineering construction activity rose from $4,574.7 million in 1998-99 to $5,560.9 million in 2002-03, an increase of 21.6%. This is less than the increase experienced at the Australian level where it rose 29.1% over the same period. In 2002-03, Engineering construction activity contributed 38.5% of total construction activity in Queensland, compared to 34.5% of total construction activity nationally.

In Queensland the value of Non-residential building activity decreased from $2,648.2 million in 1998-99 to $2,455.5 million in 2002-03, a fall of 7.3%. Nationally, Non-residential building activity increased 3.9% over the same period. The fall in the value of work done in Non-residential building was largely the result of a 6.4% decrease from 1999-2000 to 2000-01 with no corresponding rebound in following years. Consequently, in 2002-03 the value of Non-residential building activity was $192.7 million below the value five years earlier. Over the five years Non-residential building's share of total construction activity in Queensland has progressively fallen from 24.5% in 1998-99 to 17.0% in 2002-03. A similar situation occurred nationally with the value contribution of Non-residential building to total construction activity falling from 26.7% in 1998-99 to 21.0% in 2002-03.

Over the five year period the largest increases to the value of construction occurred from 2000-01 to 2001-02 when the value of Residential building activity increased 42.6% and Non-residential construction increased 1.4%. For Engineering construction activity the largest increase (20.2%) occurred from 2001-02 to 2002-03.

VALUE OF WORK DONE, Construction Industry - Qld.

1998-99
1999-2000
2000-01
2001-02
2002-03
Type of activity
$m
$m
$m
$m
$m

Residential building
Houses
2,619.1
3,380.4
2,499.3
3,835.6
4,630.2
Other residential building
953.7
991.3
1,046.3
1,220.0
1,795.8
Total
3,572.9
4,371.7
3,545.6
5,055.6
6,426.0
Non-residential building
2,648.2
2,585.1
2,419.0
2,453.1
2,455.5
Engineering construction
4,574.7
5,221.4
4,744.4
4,627.5
5,560.9
Total construction
10,795.8
12,178.2
10,709.0
12,136.2
14,442.4

Source: Building Activity, Australia (cat. no. 8752.0); Engineering Construction Activity, Australia (cat. no. 8762.0).

BUSINESS INVESTMENT

Over the five years from 1998-99 to 2002-03, private new capital expenditure in the Queensland Construction industry increased 20.1%, from $323 million in 1998-99 to $388 million in 2002-03. In contrast, nationally over the five year period, private new capital expenditure in the construction industry increased 10.6% to $1,980 million in 2002-03.

PRIVATE NEW CAPITAL EXPENDITURE, Construction Industry - Qld.

1998-99
1999-2000
2000-01
2001-02
2002-03
$m
$m
$m
$m
$m

Total construction
323
351
258
283
388

Source: ABS data available on request, Private New Captial Expenditure and Expected Expenditure, Australia.

INDUSTRIAL DISPUTES

Over the five years to 2002-03, industrial disputes in the Construction industry in Queensland reached its highest level in 2002-03 at 57 disputes. In 2002-03 industrial disputes in the Construction industry involved 11,200 employees and resulted in 34,000 working days lost.

In 1998-99, the Queensland Construction industry recorded 358 working days lost per thousand employees due to industrial disputes. In the following two years this number was halved, but rose to 279 in 2001-02. In 2002-03 the number of working days lost per thousand employees in Queensland increased to 373, compared to the national rate of 235.

INDUSTRIAL DISPUTES, Construction Industry - Qld.

1998-99
1999-2000
2000-01
2001-02
2002-03

Number of disputes (no.)
32.0
31.0
26.0
40.0
57.0
Employees involved ('000)
5.4
8.2
6.5
12.1
11.2
Working days lost ('000)
30.5
14.8
14.4
25.1
34.0
Working days lost per '000 employees
358.0
159.3
163.4
278.6
373.1

Source: ABS data available on request, Industrial Disputes, Australia.

EMPLOYMENT

Number of employed persons

The Construction industry is one of the largest employing industries in Queensland. In 2002-03, the Construction industry employed 8.4% of the state's total workforce, making it the fifth largest employing industry behind Retail trade (16.2%), Property and business services (10.6%), Manufacturing (10.3%) and Health and community services (9.7%). Over the five years to 2002-03, the number of persons employed in Construction increased 9.5% from 136,500 persons in 1998-99, to 149,400 persons in 2002-03. Nationally, employment increased 15.1%.

Of the 149,400 persons employed in the Construction industry in Queensland in 2002-03, 65.3% were employed in Construction trade services and 34.7% were employed in General construction. Between 1998-99 and 2002-03, the number of persons employed in General construction increased by 3.2% and in Construction and trade services by 13.0%.

Over the five years from 1998-99 to 2002-03, the majority of Construction trade services recorded increases in employment. The largest percentage increase in the number of persons employed occurred in Other construction services increasing 66.3%, followed by Installation trade services (11.0%) and Building construction (10.8%). The only falls occurred in Site preparation services, decreasing 5.6%, and Non-building construction, decreasing 16.4%.

NUMBER OF EMPLOYED PERSONS(a), Construction Industry - Qld.

1998-99
1999-2000
2000-01
2001-02
2002-03
('000)
('000)
('000)
('000)
('000)

General construction
Building construction
36.2
37.9
37.3
41.2
40.1
Non-building construction
14.0
19.3
16.6
15.2
11.7
Total(b)
50.2
57.2
53.9
56.3
51.8
Construction trade services
Site preparation services
9.0
6.9
7.4
6.2
8.5
Building structure services
14.8
13.9
13.8
13.4
15.3
Installation trade services
26.4
26.9
22.8
26.1
29.3
Building completion services
27.3
27.3
28.1
27.0
29.7
Other construction services
8.9
11.4
11.5
10.2
14.8
Total(b)
86.3
86.3
83.6
82.9
97.5
Construction(b)
136.5
143.5
137.5
139.2
149.4

(a) Average for year ending May.
(b) Discrepancies may occur between sums of industry components and totals due to rounding.
Source: ABS data available on request, Labour Force Survey, Australia.

Status of employment

Of persons employed in the Construction industry in Queensland in 2002-03, 63.5% (99,900) were employees, compared to 65.5% nationally. The second highest percentage of workers were engaged on an 'own account' basis and constituted 28.9% (45,400) of persons employed in Construction in Queensland in 2002-03. This is similar to the national level of 27.9% (graph 3). Employers and Contributing family workers accounted for 6.9% (10,800 persons) and 0.8% (1,200 persons) of the Queensland Construction industry respectively, similar to their share of the Australian Construction industry at 6.0% and 0.6%.

GRAPH 3. OWN ACCOUNT WORKERS AS A PERCENTAGE OF INDUSTRY EMPLOYMENT (a), 2002-03
Graph: Own account workers as a percentage of industry employment, Qld.

Hours worked

Persons employed in the Construction industry in Queensland worked an average of 38.7 hours per week in 2002-03, compared to 38.4 hours per week nationally. In Queensland, the average number of hours worked per week differed between General construction and Construction trade services in 2002-03, with persons employed in General construction working an average of 40.3 hours per week, and those employed in Construction trade services working an average of 37.8 hours per week.

AVERAGE HOURS WORKED PER WEEK, Construction Industry - Qld.

1998-99
1999-2000
2000-01
2001-02
2002-03
hrs
hrs
hrs
hrs
hrs

Construction
37.9
39.1
38.7
38.1
38.7
General construction
39.5
40.8
40.3
39.3
40.3
Construction trade services
37.0
38.0
37.7
37.3
37.8

Source: Labour Force Survey, Australia (cat. no. 6291.9.55.001)

For further information on this article, please contact Rachel Smith on (08) 8237 7324.