Defining an Industry: What is the Size and Scope of the Australian Building and Construction Industry

Gerard De Valence

doi:10.5130/ajceb.v10i1/2.1594

Abstract

This is a reprint from Vol 1, no 1, which has not previously been available in electronic format.The analysis and understanding of the conduct and performance of an industry begins with a study of its structure. However, before analysing an industry's structure it is necessary to define the industry and identify its size, scope and scale to establish its true economic contribution. This paper discusses the size and scope of the Australian building and construction industry, firstly froma traditional industry economics approach by firm size and business characteristics using data fron three construction industry surveys done over 15 years by the ABS. Secondly, data from an industry 'cluster' perspective is shown. The objective of the paper is to compare the differences found in industry size and scope in the structure-conduct-performance approach and the alternative industry cluster approach. Each model reveals different characteristics of the industry. The conclusion finds that the building and construction industry is a case where the traditional structure-conduct-performance model cannot be easily applied.&nbsp

Highlights

The traditional structure-conductperformance approach to industry economics originated in the US in the 1930s with the work of Mason (1939) and Bain (1959)
This paper has presented data from two different perspectives on the size and scope of the Australian construction industry
The industry activity data from the Australian Bureau of Statistics (ABS) and the Construction Industry Survey data is in this form

Summary

Introduction

The traditional structure-conductperformance approach to industry economics originated in the US in the 1930s with the work of Mason (1939) and Bain (1959). Some analysts see the construction industry as a manufacturing system, similar to the automotive industry This view underpins the recommendations in the Egan Report (1998) in the UK, which emphasises lean thinking in construction. This analogy argues the industry in Australia has a few very large key players whose task it is to 'assemble' constructed items, complete buildings or transport facilities for example. These key firms play the same role in both 'production' and innovation as the automotive assemblers, except that they do not have a fixed place of assembly. The objective of this paper is to review the current data available on industry size and scope and compare differences between the structure-conduct-performance approach and the alternative industry cluster approach

Industry Clusters

The Construction Industry

Residential Building

Industry Size

Industry gross product

The Construction Production Chain

Built Environment

Machinery and Equipment Supplies

Total Employed

Policy Implications

Findings

Conclusion