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INTRODUCTION

1 This publication contains estimates of engineering construction activity in Australia by both public and private sector organisations. The estimates were compiled from the Engineering Construction Survey (ECS).

2 These estimates together with results from the ABS Building Activity Surveys provide a complete quarterly picture of building and construction activity in Australia.


SCOPE AND COVERAGE OF THE SURVEY

3 The ECS aims to measure the value of all engineering construction work undertaken in Australia. The scope of the survey includes 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.).

4 The cost of land and the value of building construction is excluded from the scope of the survey. Where projects include elements of both building and engineering construction (for example, electricity generation, heavy industrial plant) every effort is taken to exclude the building component from these statistics.

5 Repair and maintenance activity is excluded from the survey 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.

6 A contract for the installation of machinery and equipment which is an integral part of a construction project is included in the statistics.


RELATIONSHIP WITH NATIONAL ACCOUNTS

7 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 (from Building Activity, Australia, Cat. no. 8752.0) and the value of engineering construction activity (from the Engineering Construction Survey) are the major source 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 account 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 Building Activity Survey 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.


SAMPLE REVISION

8 The survey frames and samples are revised each quarter to ensure that they remain representative of the survey population. The timing for creating each quarter's survey frame is consistent with that of other ABS surveys. This provides for greater consistency when comparing data across surveys.


RELIABILITY OF THE ESTIMATES

9 Since the figures for private sector and public sector organisations are derived from information obtained from a sample of organisations they are subject to sampling error; that is, they may differ from the figures that would have been obtained if information for all organisations for the relevant period had been included in the survey. A measure of the likely difference is given by the relative standard error of each estimate. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all units had been included, and about nineteen chances in twenty that the difference will be less than two standard errors. Approximate relative standard errors of the estimates are shown in tables 21, 22 and 23.

10 An example of the use of standard errors is as follows. If the total value of work done during the quarter is $2,500m and the associated standard error is 0.5% then there are about two chances in three that the value which would have been derived if there had been a complete collection would have been within the range $2,488m to $2,513m and about nineteen chances in twenty that the value would have been within the range $2,475m to $2,525m.

11 The imprecision due to sampling variability, which is measured by the relative standard error, should not be confused with inaccuracies that may occur because of inadequacies in the source of information, imperfections in reporting by respondents, and errors made in the coding and processing of data. Inaccuracies of this kind are referred to as non-sampling error, and may occur in any enumeration whether it be a full count or only a sample. Every effort is made to reduce the non-sampling error to a minimum by the careful design of questionnaires, efforts to obtain responses for all selected organisations, and efficient operating procedures.

12 Caution is advised in respect of the value of work commenced (and consequently, the value of work yet to be done) reported by the public sector. It is known that data reported for value of work commenced are a combination of the following: annual works budget estimates which are reported as commencements in the September quarter (and in some cases may subsequently be undertaken by the private sector); genuine commencements as defined in the Glossary, and reported quarterly; commencements being reported as equal to the value of work done for the quarter; commencements of major stages in the case of long-term projects.


SEASONAL ADJUSTMENT

13 Seasonally adjusted statistics for engineering construction activity are shown in tables 1 and 2. As happens with all seasonally adjusted series, the seasonal factors are reviewed annually to take account of each additional year's data. The results of the latest review are included in the December quarter issue each year. Information regarding the methods used in seasonally adjusting the series, is available on request.

14 Since seasonally adjusted statistics reflect both irregular and trend movements, an upward or downward movement in a seasonally adjusted series does not necessarily indicate a change of trend. Particular care should therefore be taken in interpreting individual quarter to quarter movements.


CHAIN VOLUME MEASURES

15 Chain volume estimates of the value of work done are presented in original and seasonally adjusted terms in Table 1.

16 While current price estimates of the value of work done reflect both price and volume changes, chain volume estimates measure changes in value after the direct effects of price changes have been eliminated and therefore only reflect volume changes. The deflators used to revalue the current price estimates in this publication are derived from the same price data underlying the deflators compiled for the new engineering construction component of the national accounts aggregate ‘Gross fixed capital formation’.

17 The chain volume measures of work done appearing in this publication are annually reweighted chain Laspeyres indexes referenced to current price values in a chosen reference year (currently 1999-2000). The reference year will be updated annually in the June quarter publication. Each year’s data in the value of work done series are based on the prices of the previous year, except for the quarters of the latest incomplete year (i.e. for the 2001-02 financial year) which are based upon the current reference year (i.e. 1999-2000). Comparability with previous years is achieved by linking (or chaining) the series together to form a continuous time series. Further information on the nature and concepts of chain volume measures is contained in the ABS Information Paper: Introduction of Chain Volume Measures in the Australian National Accounts, (Cat. no. 5248.0).

18 The factors used to seasonally adjust the chain volume measures are identical to those used to adjust the corresponding current price series.


ACKNOWLEDGEMENT

19 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.


RELATED PUBLICATIONS

20 Users may also wish to refer to the following building and construction publications and special products which are available on request.

• Building Approvals, Australia (Cat. no. 8731.0) issued monthly

• Building Activity, Australia: Dwelling Unit Commencements, Preliminary (Cat. no. 8750.0) issued quarterly

• Building Activity, Australia (Cat. no. 8752.0) issued quarterly

• Construction Work Done, Australia, Preliminary (Cat. no. 8755.0) issued quarterly