Abstract
Australian construction productivity has grown slowly since 1985 and remains arguably stagnant. The importance of this study is therefore to examine several factors through to be drivers of construction productivity and to understand possible avenues for improvement. The drivers tested are research and development, apprentices, wage growth, unionisation and safety regulation. Expenditure on research and development and the number of apprentices were found to be drivers of productivity growth in Victoria, New South Wales and Western Australia. These findings are important because collectively, these three states account for a majority of construction activity in Australia.
Highlights
The decision to focus on the productivity drivers began with the perception of slow productivity growth in the Australian construction industry, as indicated in official statistics (Australian Bureau of Statistics, 2013a)
The national level productivity findings in this paper indicated that construction productivity growth in Australian construction appeared to be growing slowly
Note the disruption to the time series from 2000 to 2002, caused by the introduction of the Australian Goods and Services Tax system which influenced the timing of construction activity (Australian Bureau of Statistics, 2007)
Summary
The decision to focus on the productivity drivers began with the perception of slow productivity growth in the Australian construction industry, as indicated in official statistics (Australian Bureau of Statistics, 2013a). Toner et al (2001) undertook an international comparison and found that Australia had one of the most productive construction industries in the world and was “within the top three OECD countries in terms of construction output per person employed” (Toner et al, 2001, p.104) Such comparisons are often faced with measurement challenges including the comparability of international data, exchange rate fluctuations and purchasing power differences. State based construction data availability dictated a shorter time series analysis, allowed for a segmented analysis of the Australian construction industry. These productivity estimates were derived using Färe-Primont Data Envelopment Analysis (DEA) based Total Factor Productivity (TFP) as in O’Donnell, (2011) and O’Donnell, (2014). Consider the Tasmanian construction industry, which is small and isolated with a mix of building and engineering construction
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