Construction Industry Snapshot
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- Mervyn Gray
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1 Construction Industry Snapshot Employment Growth Strong growth has been driven by the housing and commercial needs of an expanding population, as well as ongoing investment in public and private infrastructure. Employment growth in construction slowed with the onset of the Global Financial Crisis in 2008, to a rate of 0.5% per annum over the five years to February 2013 (compared with 1.5% per annum across all industries). More recently, however, employment growth in the industry has improved, with employment growing by 2.9% (or 28,800) over 2014, well above the 0.5% growth recorded across all industries. This is a sign that conditions in the industry are improving in response to lower interest rates and a subsequent increase in housing prices, building approvals and building commencements. Construction industry employment level, Feb 1994 to Feb 2014 ( 000) Sources: ABS, Labour Force, Australia, Detailed, Quarterly, cat. no trend Feb 94 Feb 95 Feb 96 Feb 97 Feb 98 Feb 99 Feb 00 Feb 01 Feb 02 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Sectoral Employment The DoE reports 21 that the largest contributor to employment in construction is the building installation services sector 22, employing 236,000 workers (or 27.1% of industry employment) as at February Other large employing sectors include building completion services (177,700 or 20.4%), other construction services (94,500 or 10.9%) and residential building construction (89,900 or 10.3%). 21 Industry Outlook, Construction. Australian Government Department of Employment, June The Construction industry is divided into eight sectors by the Department of Employment (DoE): Residential Building Construction; Non-Residential Building Construction; Heavy and Civil Engineering Construction; Land Development and Site Preparation Services; Building Structure Services; Building Installation Services; Building Completion Services; and Other Construction Services. Building Installation Services includes Plumbing Services, Electrical Services, Air Conditioning and Heating Services, Fire and Security Alarm Services and Other Building Installation Services. Building Completion Services includes Plastering and Ceiling Services, Carpentry Services, Tiling and Carpeting Services, Painting and Decorating Services and Glazing Services. Other Construction Services includes Landscape Construction Services, Hire of Construction Machinery with Operator and Other Construction Services not elsewhere classified (such as waterproofing of building, and scaffolding construction) 86 CPSISC - ENVIRONMENTAL SCAN : SECTION 1 - LATEST INTELLIGENCE
2 Over the five years to February 2014, the building installation services sector recorded the largest sectoral growth (up by 19,600 or 9.1%), with heavy and civil engineering construction 23 also recording large growth (15,500 or 22.5%). Building completion services (down by 19,300 or 9.8%) and building structure services (17,500 or 18.1%) were the only two sectors to record a decline over this period. Employment level and five year change to Feb 2014, by construction industry sector ( 000) Sources: ABS, Labour Force, Australia, Detailed, Quarterly, cat. no Department of Employment trend Building Installation Services Building Completion Services Other Construction Services Residential Building Construction Heavy and Civil Engineering Construction Building Structure Services Land Development and Site Preparation Services Non-Residential Building Construction Employment by Region The majority of employment in the construction industry is concentrated in NSW, VIC and QLD, which together account for 75.4% of construction employment. Five year construction industry employment growth by region ( 000) Source: ABS, Labour Force, Australia, Detailed, Quarterly, cat no four quarter average of original data Employment Growth - Five years to Feb 2014 n Increase of 2000 or more n Increase of 1000 to 1999 n Increase of up to 999 n Decrease 23 CPSISC Training Packages do not cover heavy and civil engineering construction CPSISC - ENVIRONMENTAL SCAN : SECTION 1 - LATEST INTELLIGENCE 87
3 Age Profile In 2013, 17.2% of workers were aged 15 to 24 years, and the median age was 38 years. The industry is also the largest employer of young full time workers, employing 154,600 or 17.6% of all full time workers aged in the year to February Employed persons by age, Feb 2014 (% share of employment) Souirce: ABS, Labour Force, Australia, Detailed, Quarterly, cat no four quarter average of original data and over Gender and Full-Time/Part-Time 79.8% of workers are males employed full-time, compared with 45.1% across all industries. The construction industry has the highest share of male employment of all 19 broad industries, with male workers accounting for 88.3% of the workforce (compared with 54.3% across all industries) in February Male representation is particularly high in building completion services (92.1%) and building structure services (91.6%). In February 2014, full-time employment accounted for 85.6% of total employment in the industry, compared with 69.9% across all industries. Furthermore, all sectors within construction had a share of full-time workers that was higher than across all industries, with non residential building construction (94.3%) and heavy and civil engineering (92.2%) recording particularly high shares. Educational Qualifications The share of construction industry workers who have a level of educational attainment above Year 12 or equivalent is 59.7%, similar to the corresponding share across all industries (59.6%). The critical role of trade skills in the construction industry, however, is reflected in the 45.3% share of construction industry workers who have completed a Certificate III/IV qualification, which is significantly higher than the corresponding share across all industries (20.7%). By contrast, the construction industry s share of workers who have attained a Bachelor Degree or higher (7.8%) is significantly lower than the corresponding share across all industries (28.4%). 88 CPSISC - ENVIRONMENTAL SCAN : SECTION 1 - LATEST INTELLIGENCE
4 Highest education attainment - share of employment (%) Souirce: ABS Survey of Education and Work, 2013 Postgraduate Qualification Bachelor Degree Advanced Diploma and Diploma Certificate III and IV Year 12 Year 10 and Below Year Main Employing Occupations The three largest employing occupations in construction in 2013 (latest available data) were carpenters and joiners (109,500), electricians (88,000) and plumbers (78,600), reflecting the importance to the construction industry of building trades. The construction industry s top 20 occupations also feature nontrade occupations such as construction managers, building and plumbing labourers, earthmoving plant operators and bookkeepers, which highlights the range of skills required by the industry. Main employing occupations in the construction industry ( 000) Souirce: ABS Labour Force Survey, four quarter average, custom data request, 2013 Carpenters and Joiners Electricians Plumbers Construction Managers Painting Trades Workers Building and Plumbing Labourers Earthmoving Plant Operators Concreters Plasterers Architectural, Building and Surveying Technicians Gardeners Bricklayers and Stonemasons Bookkeepers Handypersons Structural Steel Construction Workers Accounting Clerks Wall and Floor Tilers Truck Drivers Structural Steel and Welding Trades Workers Office Managers CPSISC - ENVIRONMENTAL SCAN : SECTION 1 - LATEST INTELLIGENCE 89
5 Future Employment Growth in construction will be supported by historically low interest rates and the housing needs of Australia s steadily growing population and economy. Over the five years to November 2018, employment in the construction industry should grow relatively strongly, increasing by 8.0% (or 83,500 workers) compared with a growth rate of 7.2% for employment as a whole. The industry is expected to account for 9.3% of Australia s total employment growth over the period, compared with its share of 8.9% of total employment nationally as of February Employment growth over the five years to November 2018 is projected to be largest in the building completion services sector (up by 23,600), followed by building installation services (19,700) and other construction services (14,700). Only the heavy and civil engineering construction sector is expected to record a decline over the period (down by 8800) as the mining boom transitions from a labour-intensive construction phase to a production and export phase. Projected employment growth ( 000) by construction industry sector - five years to Nov 2018 Building Completion Services 23.6 Building Installation Services 19.7 Other Construction Services 14.7 Land Development and Site Preparation Services 4.8 Residential Building Construction 4.6 Building Structure Services 3.5 Non-Residential Building Construction 0.3 Heavy and Civil Engineering Construction Construction Trades Trades workers dominate this industry with construction trades comprising around one third of the workforce. The DoE reports that although most labour markets for construction trades remain adequately supplied, shortages re-emerged for a small number of trades (solid plasterer and stonemason) in Three of the ten consistently assessed construction trades were in national shortage in 2013, compared with all trades in 2007 and 2008, and just one in Apprenticeship commencements have fallen over recent years, impacted by subdued business sentiment and soft residential construction activity. Higher activity levels together with low apprenticeship numbers may result in the re-emergence of shortages across construction trades occupations over the next few years - shortages have already become apparent in some locations. 90 CPSISC - ENVIRONMENTAL SCAN : SECTION 1 - LATEST INTELLIGENCE
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