• Summary
• Downloads
• Explanatory Notes
• Related Information
• Past Releases

INTRODUCTION

1 This publication contains preliminary estimates of building and engineering construction work done during the quarter. The estimates of building work done are from the quarterly Building Activity Survey and are based upon a response of approximately 85% of the value of work done during the quarter. The estimates of engineering work done are from the quarterly Engineering Construction Survey and are based upon a response of approximately 80% of the value of work done during the quarter. More comprehensive and updated results will be available shortly in Building Activity, Australia (Cat. no. 8752.0) and Engineering Construction Activity, Australia (Cat. no. 8762.0).


SCOPE AND COVERAGE

2 The scope of the Building Activity Survey is building activity which includes construction of new building, and alterations and additions to existing buildings. Value of building activity includes the costs of materials fixed in place, labour, and architects fees. It excludes the value of land and landscaping and non-building components such as fencing, paving, roadworks, tennis courts, outdoor pools and car parks.

3 The building statistics were compiled on the basis of returns collected from builders and other individuals and organisations engaged in building activity. From the March quarter 2002, the quarterly survey consists of a sample survey of private sector building jobs involving residential building jobs valued at $10,000 or more and non-residential building jobs valued at $50,000 or more and a complete enumeration of all such public sector building jobs.

4 The scope of the Engineering Construction Survey is the value of all engineering construction work undertaken in Australia. For the Engineering Construction Survey all management units recorded on the ABS central register of businesses and classified to the construction industry and all other units known to be undertaking engineering construction work (from trade journals, newspapers, etc.), are included in the survey framework.

5.The cost of land and the value of building construction is excluded from the scope of the Engineering Construction Survey. Where projects include elements of both building and engineering construction every effort is taken to exclude the building component from the engineering construction statistics. Repair and maintenance activity is also excluded as are the value of any transfers of existing assets, the value of installed machinery and equipment not integral to the structure and the expenses for relocation of utility services. A contract for the installation of machinery and equipment which is an integral part of a construction project is included.


RELATIONSHIP WITH NATIONAL ACCOUNTS

6 Data on the value of work done on the construction of new residential buildings, alterations and additions to residential buildings, private sector non-residential buildings and the value of total and new engineering construction activity are the major sources of data which are used to compile the national accounts estimates for private gross fixed capital formation on dwellings, and other buildings and structures. However, there are some adjustments to the survey data which are made in the process of compiling these national accounts series. Allowances are made for the value of building activity which is out of scope of the Building Activity Survey and the Engineering Construction Survey. Such activity includes work done on projects which fall below the size cut-offs used for the surveys and also the value of work done which is undertaken without obtaining a building permit, either because such a permit is not required or because the requisite permit is not obtained. The national accounts estimates also make allowances for purchases (less sales) of buildings and other structures from (to) the public sector.


TREATMENT OF THE GST

7 Statistics on value of work (current prices) show residential building work done on a GST inclusive basis and non-residential work and engineering construction work done on a GST exclusive basis. This approach is consistent with that adopted in the Australian National Accounts which is based on the conceptual framework described in the 1993 edition of the international statistical standard System of National Accounts (SNA93).

8 SNA93 requires value added taxes (VAT), such as the GST, to be recorded on a net basis where:

(a) both outputs of goods and services and imports are valued excluding invoiced VAT;

(b) purchases of goods and services are recorded including non-deductible VAT.

Under the net system, VAT is recorded as being payable by purchasers, not sellers, and then only by those purchasers who are not able to deduct it. Almost all VAT is therefore recorded in the SNA93 as being paid on final uses - mainly on household consumption. Small amounts of VAT, may however, be paid by businesses in respect of certain kinds of purchases on which VAT may not be deductible.

9 The ABS records value of work done inclusive of GST in respect of residential construction and exclusive of GST in respect of non-residential construction and engineering construction. Purchasers of residential structures are unable to deduct GST from the purchase price. For non-residential structures and engineering construction, the reverse is true in most circumstances.

10 Total construction work is derived by adding total building work and total engineering construction work. To derive total building activity it is appropriate to add the residential and non-residential components. Valuation of the components of the total is consistent, since, for both components, the value of work done is recorded inclusive of non-deductible GST paid by the purchaser. As such, total building activity and total construction includes the non-deductible GST payable on residential building.

11 As estimates for engineering work are provided on a GST exclusive basis, and the majority of construction materials used were exempt from Wholesale Sales Tax, the introduction of the GST had little direct effect on the estimates of engineering construction.


DEFINITIONS

12 A building is defined as a rigid, fixed and permanent structure which has a roof. Its intended purpose is primarily to house people, plant, machinery, vehicles, goods or livestock. An integral feature of a building’s design, to satisfy its intended use, is the provision for regular access by persons.

13 A dwelling unit is defined as a self-contained suite of rooms, including cooking and bathing facilities and intended for long-term residential use. Units (whether self-contained or not) within buildings offering institutional care, such as hospitals, or temporary accommodation such as motels, hostels and holiday apartments, are not defined as dwelling units. The value of units of this type is included in non-residential building.

14 A residential building is defined as a building predominantly consisting of one or more dwelling units. Residential buildings can be either houses or other residential buildings:

• A house is defined as a detached building predominantly used for long-term residential purposes and consisting of only one dwelling unit. Thus, detached ‘granny flats’ and detached dwelling units (such as caretakers’ residences) associated with non-residential buildings are defined as houses for the purpose of these statistics.

• An other residential building is defined as a building which is predominantly used for long-term residential purposes and which contains (or has attached to it) more than one dwelling unit (e.g. includes townhouses, duplexes, blocks of flats, apartment buildings, etc.).

	%
New private residential building	0.9
Total private residential building	0.8
Private non-residential building	1.0
Total private building	0.7
Total residential building	0.8
Total non-residential building	1.0
Total building	0.6
Engineering for the private sector	2.1
Total engineering	1.3