Tradies continue to lead the way in $568b Construction industry

In 2011-12 the ABS released Private Sector Construction Industry data showing that tradies lead the way in a $305b construction industry. Recent ABS data shows that tradies still very much lead the industry, which generated $568b in total income in 2022-23.

The Construction industry represents a significant proportion of the Australian economy, ranking as the fourth largest employing industry (1.3 million people), according to 2022-23 Australian Industry data. In 2022-23, the industry also contributed $163b in industry value added making it the third largest in the Australian economy.

The Construction industry is composed of three subdivisions. The largest is the Construction services subdivision, which groups businesses providing services largely to other construction businesses (commonly referred to as tradies). The two remaining subdivisions are comprised of businesses engaged in Building construction and Heavy and civil engineering construction.

This year the ABS is collecting additional Construction Industry data for the first time since 2011-12, to allow us to better understand the size and performance of the Construction industry within Australia. This additional data will feature additional income breakdowns and more detailed industry classifications and is expected to be released in mid-2025.

Ahead of the additional Construction Industry data release next year, let’s first take a look at what we currently know about the Construction industry using existing data from Australian Industry 2022-23.

• Total income across the Construction industry in 2022-23 was $568b. Total income is primarily comprised of sales and service income ($560b).
• Both Construction services and Building construction represent a large proportion of total income, contributing $248b and $217b respectively.
• Total income showed strong rises in all three sectors of the Construction industry in 2021-22 and 2022-23.
• Almost a third of Construction industry sales and service income was generated in New South Wales in 2022-23 ($184b). The next largest shares of revenue were in Victoria ($153b) and Queensland ($106b).

The 2011-12 data showed that 40.1% of Construction industry income was from subcontracting, with this rising to 79.1% for the Construction services subdivision. The detailed breakdowns contained in the upcoming 2023-24 Australian Industry release will provide an update into contracting and subcontracting income across the industry.

• In 2022-23, total expenses in the Construction industry amounted to $517b, which is mainly composed of purchases of goods and materials ($242b), other selected expenses ($165b), and labour costs ($100b).
• Construction services and Building construction account for the vast majority of total expenses across the industry, with $215b and $204b respectively in 2022-23.
• Recent increases in total expenses can be attributed to increases in the price of construction materials, volume of work and fluctuations in labour costs. Most recently, there was a $119b (29.9%) increase in total expenses from 2020-21 to 2022-23 across the Construction industry, reflecting rises in purchases of goods and materials ($71b), labour costs ($20b) and other selected expenses ($31b).

The 2011-12 data showed that 28.2% of expenses in Building construction and Heavy and civil engineering construction were payments made to other business for trade services, building and construction work. The detailed breakdowns contained in the upcoming 2023-24 Australian Industry release will provide an update into operating expenses across the Construction industry.

• In 2022-23, labour costs totalled $100b with Construction services accounting for 57.1% ($57b), Building construction contributing 21.7% ($22b), and Heavy and civil engineering construction contributing 21.2% ($21b). This is a product of 68.6% of Construction industry employment being concentrated within Construction services in 2022-23.
• Recent increases in labour costs can be attributed to labour and skills shortage in the industry, which has led to upward wage pressures across the Construction industry. In 2022-23 total labour costs increased 13.3% compared to 2021-22.
• The Building construction and Heavy and civil engineering construction industries have smaller workforces due to their reliance on subcontracting businesses engaged in Construction services.

• The Construction industry generated an operating profit before tax of $52b in 2022-23, with Construction services representing approximately two thirds of the total profit figure.
• Challenging market conditions after the outbreak of COVID-19 have seen operating profit for Building construction fall since 2020, with profits stabilising in 2022-23. These drops in operating profit were the first seen in Building construction since 2014-15. Operating profit declines were somewhat subdued by stimulus packages offered across the residential construction sector in response to COVID-19.
• Whilst Heavy and civil engineering construction saw a fall in profit in 2020-21, the subdivision has since rebounded, as profits rose to above pre-COVID levels in 2022-23. 
• Construction services profits grew substantially in 2022-23, representing the strongest percentage increase in the industry since the beginning of Australian industry's published time series (2006-07).

We know a lot about the Construction industry, and we are going to learn even more after we release 2023-24 Australian Industry data.

Australian Industry data for the 2023-24 financial year is scheduled for release on May 30, 2025 at 11:30am AEDT.

This will be supplemented by the additional release of detailed Construction industry data in mid-2025.