CONSTRUCTION ACTIVITY

CONSTRUCTION WORK DONE

Construction activity includes the construction of buildings and engineering works, such as roads, bridges and railways, and is carried out by both the private and public sectors. In 2010–11, the value of construction work done (in volume terms) for the public sector (by both the private and public sectors) was $48 billion (graph 21.4). After a decline in 2009–10, the value of construction work done for the private sector increased by 6% in 2010–11, to $119 billion.

The composition of construction work done has changed significantly over time among the three broad areas of construction – residential building, non-residential building and engineering construction.

Engineering construction activity has grown steadily, surpassing the value of residential building activity in 2005–06 and reaching $86 billion in 2010–11 (graph 21.5). In 2010–11, the value of residential building construction was $47 billion and the value of non-residential building work done was $35 billion.




RESIDENTIAL BUILDING

Residential buildings are primarily used for long-term residential purposes, whereas non-residential buildings are used for other purposes. Residential buildings are categorised as separate houses or other residential buildings (such as semi-detached houses, townhouses, flats, units and apartments). Building work is categorised as either new work or an alteration or addition to an existing building (including conversions of buildings from non-residential to residential use).

Approvals

Building approvals are used as a key indicator of future building activity, as construction generally commences in the months after approval is given.

Graph 21.6 shows the number of dwelling units approved as new houses, new other residential dwellings and total dwellings. Total dwelling unit approvals have fluctuated in recent years. In 2010–11, the total number of dwelling unit approvals was 163,052, which was a small decrease (5%) on the previous year.

New houses make up the largest component of dwelling unit approvals. In 2010–11, the number of new house approvals was 99,473, a decrease of 13% since 2009–10. In contrast to new houses, the number of new other residential dwellings rose 11% between 2009–10 and 2010–11, to 62,144.




In 2010–11, the number of dwelling units approved in new semi-detached, row or terrace houses and townhouses fell by 7% over the previous year (table 21.7). There was a decrease (18%) in new one storey dwelling units in this category, partly offset by an increase (7%) in those with two or more storeys.

The number of dwelling units approved in new flat, unit or apartment buildings increased by 26% in 2010–11, with a decrease of 55% in buildings with one or two storeys and a substantial increase of 70% in those with four or more storeys.

21.7 NEW OTHER RESIDENTIAL DWELLING UNITS APPROVED
	2009–10	2010–11
New semi-detached, row or terrace houses, townhouses, etc
One storey	13 311	10 861
Two or more storeys	10 915	11 629
Total	24 226	22 490
New flats, units or apartments in a building
One or two storeys	8 981	4 085
Three storeys	3 966	4 073
Four or more storeys	18 567	31 496
Total	31 514	39 654
Total	55 740	62 144
Source: Building Approvals, Australia (8731.0).

Commencements

Graph 21.8 shows the number of dwelling units commenced each year between 2000–01 and 2010–11. In 2010–11, work commenced on 155,951 dwellings, which included 96,497 new houses and 58,340 dwellings in new other residential buildings.




Graph 21.9 shows the estimated completion value (in volume terms) of residential work commenced each year from 2000–01 to 2010–11. In 2010–11, the value of new houses commenced was $26 billion and the value of new other residential building work commenced was $14 billion. The total value of residential work commenced in 2010–11, which includes alterations and additions to existing residential buildings, was $47 billion.




Building work done

Between 2009–10 and 2010–11, the value (in current prices) of total residential building work done increased by 5%, to $48 billion (table 21.10). There was a decrease of 2% in the value of work done for new houses, while the value of work done on new other residential buildings increased by 19% and work done on alterations and additions to existing residential buildings increased by 7%.

	New houses	New other residential	Total new residential	Alterations and additions	Total residential
	$m	$m	$m	$m	$m
2009–10	27 823	11 374	39 197	6 878	46 075
2010–11	27 372	13 576	40 948	7 393	48 341
(a) Current prices.
Source: Building Activity, Australia (8752.0).

NON-RESIDENTIAL BUILDING

The value (in current prices) of non-residential building work approved decreased by 30%, from $40 billion in 2009–10 to $28 billion in 2010–11 (table 21.11). Educational and health facilities contributed most to this decrease, with reductions of $12 billion and $3 billion respectively. Small increases in the value of approvals occurred for most other building types.

The value of non-residential building work done was steady overall at $35 billion in both 2009–10 and 2010–11, with several small falls and rises. The largest decrease was for Other non-residential buildings n.e.c, which decreased by $427 million. The largest increase was for Health facilities ($529 million).

21.11 VALUE OF NON-RESIDENTIAL BUILDING WORK(a)(b)
		Approved		Work done
		2009–10	2010–11	2009–10	2010–11
		$m	$m	$m	$m
Commercial
	Retail and wholesale trade	3 956	4 764	4 455	4 822
	Transport	476	586	782	615
	Offices	4 309	4 827	5 532	5 119
	Other commercial buildings n.e.c.	231	209	246	241
	Total	8 971	10 386	11 015	10 798
Industrial
	Factories	851	1 248	984	948
	Warehouses	1 911	2 101	1 797	2 075
	Agricultural and aquacultural	148	149	211	311
	Other industrial buildings n.e.c.	167	224	282	228
	Total	3 078	3 722	3 274	3 562
Other non-residential
	Educational	16 664	5 089	10 851	10 648
	Religious	187	186	154	215
	Aged care facilities	627	687	928	703
	Health	5 994	2 949	2 844	3 373
	Entertainment and recreation	1 399	1 932	1 966	2 012
	Accommodation	720	1 107	989	789
	Other non-residential buildings n.e.c.	2 270	1 835	2 881	2 454
	Total	27 860	13 785	20 613	20 195
Total non-residential building		39 909	27 894	34 902	34 554
(a) Valued at $50,000 or more.
(b) In current prices.
Source: Building Activity, Australia (8752.0); Building Approvals, Australia (8731.0).

ENGINEERING CONSTRUCTION

Graph 21.12 shows the total value of engineering construction work done (in volume terms) each year from 2000–01 to 2010–11, for the private sector and for the public sector. The value of engineering construction work done for the private sector has exceeded that done for the public sector since 2002–03 and, in 2010–11, reached $56 billion, or 65% of the total value of engineering construction work done. In 2010–11, the value of engineering construction work done for the public sector was $30 billion, of which 51% was done by the private sector for the public sector and 49% was done by the public sector directly.



Table 21.13 shows the contribution of the public and private sectors to the value of work done (in current prices) for different categories of engineering construction. In 2010–11, the most significant categories in terms of the value of engineering construction work done were for facilities (excluding buildings) for Oil, gas, coal and other minerals; Roads, highways and subdivisions; and Electricity generation, transmission and distribution.

The value of engineering construction work done in 2010–11 for mining facilities for Oil, gas, coal and other minerals was $29 billion, almost all of which was for the private sector. The value of work done on Roads, highways and subdivisions was $16 billion, of which 68% was for the public sector. For Electricity generation, transmission and distribution, the value of work done was $11 billion, of which 60% was for the public sector.

The largest changes in the value of engineering construction work done between 2009–10 and 2010–11 were for mining facilities (Oil, gas, coal and other minerals), with an increase of nearly $5 billion (19%) and Roads, highways and subdivisions, with an increase of nearly $2 billion (13%).

21.13 VALUE OF ENGINEERING CONSTRUCTION WORK DONE(a)(b)
	2009–10			2010–11
	For the private sector	For the public sector	Total	For the private sector	For the public sector	Total
	$m	$m	$m	$m	$m	$m
Roads, highways and subdivisions	4 867	9 493	14 360	5 185	11 060	16 245
Bridges	46	1 215	1 261	110	1 157	1 268
Railways	1 336	3 327	4 663	1 968	4 022	5 990
Harbours	1 412	713	2 125	2 612	722	3 334
Water storage and supply	1 735	4 129	5 864	2 946	2 933	5 879
Sewerage and drainage	517	2 329	2 845	652	2 806	3 458
Electricity generation, transmission and distribution	4 260	6 764	11 024	4 213	6 447	10 660
Pipelines	994	15	1 009	1 734	33	1 767
Recreation	1 517	1 088	2 606	1 592	1 279	2 871
Telecommunications	3 656	181	3 837	3 630	271	3 901
Oil, gas, coal and other minerals	24 210	166	24 377	28 847	57	28 904
Other heavy industry	494	9	503	859	8	866
Other	1 279	240	1 519	784	111	895
Total	46 324	29 668	75 993	55 133	30 906	86 039
(a) In current prices.
(b) Public sector includes work done by the private sector for the public sector and public sector work.
Source: Engineering Construction Activity, Australia (8762.0).