THE CONSTRUCTION INDUSTRY IN

AUSTRALIA

Course: Technical English

Name: Edinson Vargas Charaja

Cycle: X

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 CONTENTS
Introduction .................................................................................................................................. 3
THE CONSTRUCTION INDUSTRY IN AUSTRALIA ........................................................................... 4
An industry snapshot .............................................................................................................. 5
Occupational composition..................................................................................................... 7
Qualifications profile ............................................................................................................... 8
Training in construction ......................................................................................................... 8
Employer support for training .............................................................................................. 9
Conclusions ............................................................................................................................. 10

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Introduction

The construction industry in Australia employs nearly 600 000 persons

accounting for over 7% of total employment.' The industry is comprised of housing
construction, other non dwelling building, and engineering construction, such as
roads, and land sub division and telecommunications rollouts. The industry is
heavily dominated by male, full -time employment, with males making up nearly
88% of the workforce and full -time work accounting for 86% of the total jobs.

Employment in the industry tends to be cyclical and there are different economic
factors that operate on the sub sectors of the industry. This means that, at times,
some parts of the industry are in recession while others are growing. The non
residential and engineering construction sub sectors have been growing over the
last three years,

while the housing sector has recovered from a slump from about mid -1997
onwards. Over the last decade or so, the industry has seen two peaks in
employment in the late 1980s and in the mid 1990s. Employment declined in the
early 1990s and began a recovery from about 1993. Chart 5.1 shows the levels
of employment in the industry as at November over the last 12 years.

Only about two thirds of the workers in the construction industry are classified as
employees, whereas about 85% of all workers are in this category. This reflects
the subcontracting nature of much work in the industry. This characteristic,
combined with the often short duration and uncertain nature of employment,
contributes to the industry's relatively poor performance in the provision of
industry-based structured training.

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 THE CONSTRUCTION INDUSTRY IN AUSTRALIA

The occupational structure of the industry is very different from the workforce as
a whole. Whereas only about 13% of all workers are classified in the trades group,
in construction half the workforce are tradespersons. This highlights both the
great dependency of the industry on the vocational education and training (VET)
sector in general and its specific reliance on structured apprenticeship training in
particular for its supply of skills.

While immigration has contributed to the supply of skills in this industry, overseas
born workers are no more numerous in the construction industry than they are in
the workforce overall, making up about 24% of both. The construction workforce
is more concentrated in the middle -age groups than the total workforce. In other
words, it employs both slightly fewer under -25 year olds and slightly fewer over
-45 year olds than are found in the total workforce.

The qualifications profile of the industry reflects its high trades content. However,
there are fewer workers with formal trade qualifications than there are workers in
the trades category, indicating that there are substantial numbers of workers
lacking formal qualifications in the trades area. Some of these workers could have
received formal trades recognition without receiving an educational credential.

The 1996 Australian Bureau of Statistics (ABS) training expenditure survey found
that employers in construction provided much less structured training to their
employees than the average employer, spending only about $100 per employee
in the survey period, July to September 1996, compared with the all industry
average of $185. Employers in the industry are generally very satisfied with the
provision of VET, giving one of the highest ratings of all industries in the survey
on employer satisfaction with VET for 1997 (ESS), compiled by the National
Centre for Vocational Education Research (NCVER). Similarly, technical and
further education (TAFE) graduates surveyed in the TAFE graduate destination
survey 1997 (GDS), also compiled by NCVER, who were working in the
construction industry rated most aspects of their course at a higher level than did
graduates in general. Graduates working in the industry gave their TAFE course
the highest rating of all graduates for its relevance to their work.

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Graduates who had undertaken a course of study in the architecture and building
field gained material benefits from their course. Over 40% believed that their
course had led to an increase in earnings and over 20% said it had led to a
promotion.

An industry snapshot

The construction industry in Australia can be divided into the residential and
nonresidential building sectors, and engineering construction. These sectors tend
to be driven by different economic factors and hence do not always follow the
same economic cycles. In 1996 -1997 the value of work done in these three
sectors was:

 residential $15 564 million

 non- residential building $12 689 million
 engineering construction $15 215 million

Within the residential sector the major component of activity was in the
construction of new houses, which accounted for about 59.5% of all residential
work, while other residential buildings accounted for 24.0% and alterations and
additions worth more than $10 000 made up the remaining 16.5 %. The housing
sector even has a small part in the export market. In 1995 -1996 pre- fabricated
buildings worth over $29 million were exported from Australia. Over the three
years to 1996 -1997 the value of housing construction activity fell away by over
20 %. However, there has been a recovery in the housing construction sector
since early 1997, assisted by low interest rates and greater competition among
lenders. The latest national data on the number of dwelling approvals (for January
1998) show a trend increase of 15.6% over the corresponding period in the
previous year. Further growth is expected during 1998. In the non residential
building sector the main areas of activity in 1996 -1997 were in shops (16.7 %),
offices (14.7 %), other business premises (13.9 %), and in entertainment and
recreational buildings (12.6 %). Other important areas in non residential building

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were educational buildings (10.8 %), factories (9.7 %), and hotels (7.9 %). The
nonresidential and engineering construction sectors have shown growth in
activity over the last three years (to 1996 -1997) of 25.5% and 13.2% respectively
and growth in these sectors appears to be continuing quite strongly although
there are mixed signals coming from the market. Non residential construction
activity is expected to continue to grow throughout the rest of 1998.

In engineering construction, roads, highways and land sub division made up the

major component (29.8 %), with telecommunications (18.3 %), heavy industry
(16.3%), and electricity generation, transmission and distribution (9.9 %) also
prominent. In 1996 -1997, 62.6% of the engineering construction activity was
undertaken on behalf of the public sector. A considerable stock of unfinished work
currently exists in the engineering construction sector in mining and road
construction.'

In November 1997 there were 597 100 persons estimated to be employed in the
construction industry, accounting for just over 7% of the total Australian employed
labour force. Employment in this sector is cyclical, in response to a range of
factors, especially interest rates, housing affordability and large infrastructure
projects. In November 1997 the almost 600 000 persons employed in the industry
were divided into the two sub divisions of general construction and construction
trade services employing, respectively, 224 200 and 373 000 persons.
Employment in these sub divisions has tended to follow similar cyclical patterns
over the last decade, as is shown in chart 5.1. Employment in construction trade
services has risen over the last decade by about 5.2% and in general construction
by 6.4% but, as the chart shows, there has been considerable fluctuation in the
industry's employment level.

Employment in the industry is, however, below the high point for the last decade,
which occurred in early 1990 at almost 620 000. Employment in the construction
industry is usually full time. Only 13.7% of jobs in the industry are part time, and
only 12.4% of the industry's workforce are females. This makes the industry the
second most male- dominated sector after mining, with only 11% of its workforce
females. Only 65% of the workers in the industry are classified as employees,
compared with nearly 85% of the total workforce. Nearly 27% of the construction

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industry workforce is classified as 'own account workers' and the remaining 7%
is employers. This reflects the sub contracting practices in the industry and the
small business structure that dominate the industry. There are more businesses
classified to the construction sector in Australia than to any other industry. In 1994
-1995 there were 151 500 businesses classified in the construction sector, of
which 149 700 were small businesses. Construction accounted for 16.4% of all
businesses in Australia at that time. The second largest category, with 138 700
businesses, was in retailing.

Occupational composition

The occupational profile of the construction industry is unique in that over half the
workforce is classified as tradespersons, over 99% of whom are male. The
industry has both a lower- than average proportion of professionals and associate
professionals, and of clerical /sales /service workers.

The industry also has a large number of trades occupations that are heavily
concentrated in the industry, as is shown in table 5.3 with the industry accounting
for at least 75% of employment in eight separate trades occupations.

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 Qualifications profile

The qualifications profile of the construction industry reflects its occupational

structure, with relatively few workers in construction possessing a university

credential and the largest category of qualification being skilled vocational. This
directly corresponds with the large group of tradespersons in the industry. It is
also worthy of note that a relatively small number of workers in the

construction industry, 42 %, lack a post school qualification, compared with the

total workforce's 49.4 %. Around half of the industry's workforce, therefore, is
dependent upon the VET sector for their training.

There is, however, a sizeable gap between the number of tradespersons in the
industry, about 300 000, and the number of workers possessing a formal skilled
vocational qualification, about 218 000. This shows that there is a substantial
body of trades -level workers in the industry lacking a formal qualification. It is
possible that some of these workers have received recognition for their level of
skill but have not obtained a TAFE trade certificate. 1996 Census data
reproduced in tables A5.5 and A5.6 in the appendix show that about one third of
those working as tradespersons in the industry lack formal qualifications. A similar
proportion of those classified as managers and administrators also lack formal
qualifications according to the 1996 Census data in those tables. As well, about
30% of those classified in the professional and associate profesional occupations
in construction lack formal qualifications according to the same data

Training in construction

Government funded training for building and construction largely falls under the
ANTA- defined training area of the same name. In 1995, 8.1% of government
training activity occurred in this area. In using this figure it should be kept in mind
that only about 57% of total government funded training activity was designated
to a specific industry- related area. The remaining 43% was in broader categories,
such as computing, and business and clerical, which have relevance across all
industry sectors, including construction. In 1996 this allocation was expected to

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decline slightly and in 1997 the level was expected to be about 7.6% (see table
A5.1 in the appendix). For 1995 this meant that there were about 38 hours of
government funded training provided person employed in the construction
industry, well above the all- sector average of 27 hours. Enrolment statistics in
VET identify those undertaking studies in construction áreas in two ways by
discipline group, built environment, and by field of study, architecture and
building. For 1996 total annual hours of student enrolments in the field of study,
architecture and building, amounted to over 20 million hours, or 7.3% of total
hours.'

Total annual hours of enrolments in the discipline group, built environment,

amounted o about 17.6 million hours.

The main enrolment category in the field of study, architecture and building, in
1996 was for trade -level courses, making up one -third of all hours for this field
of study. The other major areas of enrolment were in operatives: initial 16.7 %,
paraprofessional 9.7 %, and trades (other) 9.3 %. Over 89% of the enrolments
were by male students.

Module pass rates in the built environment discipline group are well above
average for all courses at 72.4 %, compared with overall pass rates of 60.5 %.

Employer support for training

In the 1997 GDS a moderately high 64.5% of graduates working in the

construction industry who had been working in the industry in their final semester
of study received some form of financial support from their employer, usually paid
time off work or payment of fees. Across all industries around 51% of graduates
had some form of financial support from their employer. The ABS employer
training expenditure survey of 1996 showed that construction industry employers
spent considerably less than the average employer on structured training. They
spent just over $100 per employee in the three -month survey period, well below
the all industry average of $185 and well down on their level of expenditure in the
same 1993 survey, which saw per employee spending at $135. Only 11.6% of

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employers in the industry provided structured training, again below the all-
industry average of 18% and well below the 19% in the 1993 survey.

Employers in the non building part of construction spent far more than those in
the building sector $267 per employee against $67. The ABS employer training
practices survey of February 1997 obtained information on training provision by
industry over the previous 12 months, rather than the three month period covered
in the training expenditure survey. The training practices survey found a higher
level of employer provided structured training across the board.

Construction was, however, still below average in that only 29% of employers
provided structured training against the all- industry average of 35 %. The
construction industry's provision of unstructured training was also below the all-
industry average.

Conclusions

Construction Training Australia, the national ITAB, has raised the following five

industry training issues which are relevant to the industry or which require further

research and evaluation:

 the requirements of training package delivery

 the need for quality staff with access to well - designed professional
development programs
 the need for a major promotion and publicity campaign to help highlight
initiatives such as New Apprenticeships
 the need for research on the effects of technological change on skills
development

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