EXPLANATORY NOTES


INTRODUCTION

1 This publication presents details of building work approved.


SCOPE AND COVERAGE

2 Statistics of building work approved are compiled from:

• permits issued by local government authorities and other principal certifying authorities;
• contracts let or day labour work authorised by commonwealth, state, semi-government and local government authorities; and
• major building approvals in areas not subject to normal administrative approval e.g. building on remote mine sites.

3 The scope of the collection comprises the following:

• construction of new buildings;
• alterations and additions to existing buildings;
• approved non-structural renovation and refurbishment work; and
• approved installation of integral building fixtures.

4 Construction activity not defined as building (e.g. roads, bridges, railways, earthworks, etc.) are excluded. Statistics for this activity can be found in Engineering Construction Activity, Australia (cat. no. 8762.0).

5 The coverage of these statistics has changed over time:

• From July 1990, the statistics include all approved residential building valued at $10,000 or more and all approved non-residential building valued at $50,000 or more.
• From July 1988 to June 1990, the statistics include all approved residential building valued at $10,000 or more and all approved non-residential building valued at $30,000 or more.
• From July 1975 to June 1988, the statistics include all approved residential and non-residential building valued at $10,000 or more.
• Up to June 1975, the statistics include all approved new building, and alterations and additions involving a structural change or floor area expansion.

ROUNDING

6 Estimates in this publication are rounded and this may result in discrepancies between the sums of component items and their totals. Rounding may also cause differences between the movements (e.g. percentage changes) shown in this publication and the movements calculated by users from unrounded data. Where a discrepancy occurs, the published movement will be more accurate.


REVISIONS TO ORIGINAL DATA

7 The information provided to the Australian Bureau of Statistics (ABS) and included in estimates for any month may be revised or corrected in later months. This can occur as a result of corrections made by a provider of data, the late provision of approval records and, occasionally, by approvals being identified after construction work has commenced. Where revisions or corrections are made to the original data for prior months, the aggregate impact on dwelling approval estimates are provided on page 2 under 'REVISIONS THIS MONTH'.


VALUE DATA

8 Statistics on the value of building work approved are derived by aggregating the estimated ‘value of building work when completed’ as reported on building approval documents provided to local councils or other building approval authorities. Conceptually these value data should exclude the value of land and landscaping but include site preparation costs associated with building activity. These estimates are usually a reliable indicator of the completed value of ‘houses’. However, for other buildings they can differ significantly from the completed value of the building as final costs and contracts have often not been established before council approval is sought and gained.

9 The ABS generally accepts values provided by approving bodies. Every effort is made to ensure data are provided on a consistent basis, however, there may be instances where value reported does not reflect the building completion value. For example, the reported value for most project homes is the contract price, which may include the cost of site preparation and landscaping. In other cases where a builder is contracted to construct a dwelling based on the owner’s plans, the value may only be the builder’s costs. Some data providers do not use the value on approval documents, instead deriving a value based on floor area and type of structure.

10 From July 2000, value data includes the Goods and Services Tax (GST) for residential and non-residential building approvals.


BUILDING JOB DATA

11 In these statistics a 'building job' is a construction project comprising work to one or more buildings. Building jobs data are based on the building approval records within the scope of the collection received each month.


OWNERSHIP

12 Building ownership is classified as either public or private sector and is based on the sector of the intended owner of the completed building at the time of approval. Residential buildings constructed by private sector builders under government housing authority schemes are classified as public sector when the authority has contracted, or intends to contract, to purchase the building on or before completion.


BUILDING CLASSIFICATIONS

13 Building approvals are classified by Type of Building (e.g. 'residential', 'non-residential') and by Type of Work.

14 Type of Building is the building's intended predominant function according to the ABS Functional Classification of Buildings 1999 (Revision 2011) (cat. no. 1268.0.55.001).

• Except where specified in the Functional Classification of Buildings, a building which is ancillary to other buildings, or forms a part of a group of related buildings, is classified to the function of the building and not to the function of the group as a whole. For example, in the case of a factory complex, a detached administration building would be classified to Offices, a detached cafeteria building to Retail/wholesale trade, while factory buildings would be classified to Factories. An exception to this rule is the treatment of group accommodation buildings where, for example, a student accommodation building on a university campus would be classified to Educational.
• For a significant multi-function building which at the time of approval is intended to have more than one purpose (e.g. a hotel/shops/casino project), the ABS endeavours to split the approval details according to each main function. Where this is not possible because separate details cannot be obtained, the building is classified to the predominant function of the building.

15 Type of Work consists of 'new', 'alterations and additions', and 'conversions'. Conversions are considered to be a special type of alteration, and these jobs have been separately identified as such from the July 1996 reference month, though they have only appeared separately in this publication from the January 1998 issue. Prior to that issue, conversions were published as part of the 'Conversions, etc.' category or included elsewhere within a table.


SEASONAL ADJUSTMENT AND TREND ESTIMATES

16 Seasonal adjustment is a means of removing the estimated effects of seasonal and calendar related variation from a series so that the effects of other influences can be more clearly recognised. It does not remove the effect of irregular or other influences (e.g. the approval of large projects or a change in the administrative arrangements of approving authorities).

17 State/territory series are seasonally adjusted independently of the Australian series. In general, the sum of the state/territory estimates are reconciled to equal the Australian total estimates.

18 Seasonally adjusted estimates are produced by a seasonal adjustment method which takes account of the latest available original estimates. A detailed review of seasonal factors is conducted annually, generally prior to the release of data for May. The timing of this review may vary and when appropriate will be notified in the 'Data Notes' section of this publication.

19 The ABS produces trend estimates to best represent the underlying behaviour in a series. Trend estimates are created by smoothing seasonally adjusted series to reduce the impact of the irregular component of the seasonally adjusted series. Abnormally high or low values (outliers) are discounted or excluded from the trend estimates.

20 Seasonally adjusted and trend estimates may be revised as new periods of data become available. Generally, revisions become smaller over time. Revisions to original data may also lead to revisions to seasonally adjusted and trend estimates.

21 Care should be exercised when using the seasonally adjusted value of non-residential building jobs at the state level, due to the difficulties in estimating the seasonal pattern for these data series.

22 Further information on seasonally adjusted and trend estimates can be found in the ABS Information papers An Introductory Course on Time Series Analysis - Electronic Delivery, January 2005 (cat. no. 1346.0.55.001) and A Guide to Interpreting Time Series - Monitoring Trends, 2003 (cat. no. 1349.0).


CHAIN VOLUME MEASURES

23 Chain volume estimates reflect changes in the volume of building work approved after the direct effects of price changes have been eliminated. The chain volume measures appearing in this publication are annually reweighted chain Laspeyres indexes referenced to current price values in a chosen reference year.

24 Chain volume measures are released quarterly in the April, July, October and January issues. The reference year is updated annually in the October issue.

25 Chain volume measures do not, in general, sum exactly to the extrapolated total value of the components. Further information on the nature and concepts of chain volume measures is contained in the ABS Information Paper Australian National Accounts, Introduction of Chain Volume Measures and Price Indexes, September 1997 (cat. no. 5248.0).


GEOGRAPHIC CLASSIFICATION

26 Building approvals are classified to the Australian Statistical Geography Standard (ASGS), 2011 Edition (cat. no. 1270.0.55.001) effective from July 2011.

27 From 1 July 2002, approvals in the Territories of Jervis Bay, Christmas Island and Cocos (Keeling) Islands are included in these statistics. Jervis Bay is included in New South Wales, while Christmas Island and Cocos (Keeling) Islands are included in Western Australia. This differs to their treatment in the ASGS, where these Territories are included in 'Other Territories'.


RELATED PUBLICATIONS

28 Users may also wish to refer to the following publications:

Building Activity, Australia (cat. No. 8752.0)
Construction Work Done, Australia, Preliminary (cat. no. 8755.0)
Engineering Construction Activity, Australia (cat. no. 8762.0)
House Price Indexes: Eight Capital Cities (cat. no. 6416.0)
Housing Finance, Australia (cat. no. 5609.0)
Producer Price Indexes, Australia (cat. no. 6427.0)
Construction Activity: Chain Volume Measures, Australia (cat. no. 8782.0.65.001)

ABS DATA AVAILABLE ON REQUEST

29 As well as the statistics included in this and related publications, the ABS may have other relevant data available on request. Inquiries should be made to the National Information and Referral Service on 1300 135 070. The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.