SUMMARY OF FINDINGS


INTRODUCTION

This publication presents results from an Australian Bureau of Statistics (ABS) survey of Construction businesses. The survey was conducted in respect of the 2011-12 financial year and provides detailed measures of the performance, structure and activity of Construction businesses operating in Australia. It includes aspects such as: the composition of income earned, details of expenses incurred and the characteristics of the workforce. A State/territory dimension is also presented in this publication.

The survey scope included employing and non-employing private sector and public trading businesses in Australia. Construction activity includes: Building construction, Heavy and civil engineering construction and Construction services.

For ease of reading, businesses within the scope of the survey are collectively referred to as Construction businesses. Businesses predominantly involved in Residential building and Non-residential building construction are referred to as 'Building construction' and businesses predominantly involved in Construction Trade Services (concreting, carpentry, plumbing, etc), are referred to as 'Construction services'.


SUMMARY OF OPERATIONS

At the end of June 2012, there were 209,783 businesses in the Construction industry. This comprised of 172,697 Construction services, 31,297 Building construction and 5,789 Heavy and civil engineering construction businesses.

During 2011-12, businesses in the Construction industry generated total income of $305.5b, incurred $275.4b in total expenses and had employment of 950,000 persons. Total industry value added by these businesses was $99.4b.

Operating profit before tax (OPBT) for these businesses was $30.3b and operating profit margin (OPM) was 10.1%.


EMPLOYMENT

At the end of June 2012 there were 950,000 persons working in the Construction industry. Two-thirds (67.0% or 636,000 persons) worked for the Construction services sector followed by 16.8% (or 160,000 persons) in Building construction and 16.2% (or 154,000 persons) in Heavy and civil engineering construction.

The main occupations of persons within these businesses were tradespeople with 33.1% (or 314,000 persons) and labourers with 20.4% (or 194,000 persons).

Small businesses (employment range of 0-19) employed the majority of persons with 62.1% (or 590,000), followed by medium size businesses (employment range of 20-199) with 19.3% (or 183,000) and large size businesses (employment range of 200 or more people) with 18.6% (or 177,000).

INCOME

During 2011-12, businesses in the Construction industry generated total income of $305.5b. Of the total income, Construction services accounted for 44.5% (or $135.9b), Building construction for 33.2% (or $101.6b) and Heavy and civil engineering construction for 22.3% (or $68.0b).

The major source of income (76.3% or $233.2b) was from trade services, building and construction, followed by sales of goods and other services (22.1% or $67.5b).


Primary and subcontracting income

Of the income from trade services, building and construction, primary contracting income accounted for 59.9% (or $139.6b), while subcontracting income accounted for 40.1% (or $93.6b).

The following graph shows that income from trade services, building and construction was primarily for new work and improvements (excludes improvements to houses and other buildings).

EXPENDITURE

During 2011-12, Construction businesses incurred $275.4b in total expenses of which purchases accounted for 29.8% (or $82.1b), followed by payments to other businesses for trade services, building and construction work with 28.2% (or $77.7b).

Labour costs accounted for 21.9% (or $60.4b) of total expenses. This represents an average labour cost per person employed for all in scope Construction businesses of $63.6k. Heavy and civil engineering construction recorded higher labour costs per person employed with $113.5k followed by Building construction ($66.6k) and Construction services ($50.7k).


BUSINESS SIZE

Small Construction businesses (employment range 0-19) accounted for 97.7% (or 204,949) of all Construction businesses and the largest share of total income with 49.0% (or $149.8b). The total OPBT of these businesses was $22.4b. In contrast, large construction businesses (employment range of 200 or more) accounted for 0.1% (or 186) of all Construction businesses and generated just over a quarter of total Construction income (27.3% or $83.5b). The total OPBT of these businesses was $2.6b.
PROFIT

In 2011-12, Construction businesses generated $30.3b in OPBT, almost three-quarters of this (71.6% or $21.7b) was attributable to Construction services. Heavy and civil engineering construction showed the largest average OPBT with $263.1k per business followed by Building construction with $225.8k and Construction services with $125.5k.

Construction businesses had an OPM of 10.1%. This margin was higher for Construction services (16.1%) than for Building construction (7.1%) and Heavy and civil engineering construction (2.3%).


STATE AND TERRITORIES

Queensland and New South Wales recorded the greatest share of income from the sale of goods and services, each with 24.1% (or $72.6b). Comparatively, these states' population shares were 20.1% and 32.1% respectively. Although Western Australia's share of the population was 10.7%, they accounted for 18.3% (or $55.2b) of income from sales of goods and services.

In terms of average salaries in the Construction industry, Western Australia's average salary was $76.6k. This was followed by Queensland ($59.2k), Victoria ($51.9k) and Northern Territory ($51.6k).

The share of wages and salaries to total operating expenses in the Construction industry varied across states, with Western Australia recording the highest level (22.6%). The lowest share of wages and salaries to total operating expenses were in South Australia (15.3%) and the Australian Capital Territory (13.3%).