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

Valence, Gerard de

doi:10.5130/ajceb.v1i1.2280

Cited by 6 publications

(4 citation statements)

References 8 publications

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“…In relation to data inputs of the model, project-specific data will be sourced from the respective project costs. The inputs for the model were based on the factor inputs typically used in construction-related projects; labour, material and plant and equipment hire services (de Valence, 2001). The input data for these cost categories is obtained from the resource requirements and work breakdown structures developed during the planning stage of the project (Wong et al, 2004).…”

Section: Proposed Conceptual Modelmentioning

confidence: 99%

Application of a bottom-up approach to estimate economic impacts of building maintenance projects: cladding rectification program in Australia

Teo

Gajanayake

Jayasuriya

et al. 2021

ECAM

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PurposeThis paper critically reviews economic impact assessment methods adopted in construction-related projects, to develop and present a novel bottom-up approach suitable to estimate regional economic impacts of building maintenance projects.Design/methodology/approachA thorough literature review of economic impact assessment in construction projects is carried out to identify the most relevant approach to estimate wider economic impacts of building maintenance projects. Based on these findings, a model based on the bottom-up approach to estimate wider economic impacts is developed. The applicability and face validity of the developed model is demonstrated through a case of cladding replacement program in Australia.FindingsThe literature review revealed that bottom-up models are better suited for estimating regional economic impacts of maintenance projects, given the challenges of obtaining micro-level economic data in the maintenance sector. In relation to the total economic impacts (direct and indirect), the results show that for every $1 of government spending on similar projects the Gross State Product would increase by $1.34. In terms of employment impact, over 70% of the direct economic value addition is driven by the increase in labour, where close to 3 FTE jobs will be required for each $1 million of spending on cladding replacement projects.Originality/valueThis paper presents a model to estimate the wider economic impacts of building maintenance projects, which is typically overlooked in the construction management field. The proposed model is developed to incorporate the variability of different building maintenance projects so that the economic impact resulting from these projects could be estimated more accurately. This model can be used by local government decision-makers to justify and prioritise maintenance projects in a similar manner to new construction projects.

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Section: Proposed Conceptual Modelmentioning

confidence: 99%

Application of a bottom-up approach to estimate economic impacts of building maintenance projects: cladding rectification program in Australia

Teo

Gajanayake

Jayasuriya

et al. 2021

ECAM

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“…In a similar analysis of the Australian industry, de Valence (2001/2010) compared the size and scope of construction, first using data from a construction industry survey done by the ABS (1998), and second from an industry cluster perspective. The cluster analysis approach was used by the AEGIS (1999) to include SIC industry sectors that provide services before and after construction in an approach that focussed on the linkages and interdependencies between firms in a chain of production.…”

Section: Boundaries Of the Industrymentioning

confidence: 99%

“…In Squicciarini and Asikainen (2011), the definitions are built around “narrow” and “wide” approaches, and like Ruddock and Ruddock (2009), used the Pearce report approach with a “construction sector”. Carassus (1998) had a “construction system”, and de Valence (2001/2010) and Carassus et al (2006) an industry “cluster”. It would be helpful to agree on a common usage.…”

Section: The Built Environment Sectormentioning

confidence: 99%

Reframing construction within the built environment sector

Valence

2018

ECAM

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Purpose Official statistics on the output of the construction industry capture on-site activities of contractors and sub-contractors; however, the role of the industry linking suppliers of materials, machinery, products, services and other inputs is also widely recognised. These two views have been called broad and narrow, with the narrow industry defined as on-site work and the broad industry as the supply chain of materials, products and assemblies, and professional services. An argument is made for using the term “built environment sector” (BES) for the broad industry definition of construction. The paper aims to discuss these issues. Design/methodology/approach Construction industry statistics capture the on-site activities of contractors and sub-contractors. This paper reviews research that adds to construction output the contributions of suppliers of materials, machinery and equipment, products and components, professional services and other inputs required to deliver the buildings and structures that make up the built environment. Findings The same term, “construction”, has been used in a number of ways in different definitional studies of the narrow and broad industry. The term that best encompasses the large number and range of participants in the creation and maintenance of the built environment, from suppliers to end users, is the BES. Research limitations/implications Construction economics makes an important contribution to researching the macroeconomic role of the BES. There is also a special role for construction economics in researching both the boundaries of the BES and the data available on the industries that contribute to the BES. Practical implications Measuring the BES would improve the understanding of its macroeconomic role and significance. Social implications Measuring the BES would contribute to city policies and urban planning. Originality/value The paper proposes a new approach to defining and measuring the industries that contribute to the production, maintenance and management of the built environment. It introduces a new name for the combination of those industries.

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“…All factors that are assumed away in the mathematical models of neoclassical economists. Further, the capital stock in construction is also very difficult to define (Briscoe 2006, de Valence 2001 and measure (Lowe 1990). This is a wider set of changes to pricing theory than a few modifications to auxiliary statements will allow.…”

Section: Price Setting In Constructionmentioning

confidence: 99%

Graham Ive and the methodology of construction economics

Valence

Runeson

2015

Construction Management and Economics

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Graham Ive's central contribution to our methodological debate was his insistence on the firm as the analytical unit. Ive argues we should reject theories if the aspect of construction we are examining does not satisfy the assumptions of a particular theoretical model. We see this in his rejection of neoclassical economic theories in the two topics discussed in this paper: the adoption of innovations in construction; and microeconomic analysis as it relates to price determination in the market for construction. The former requires studying not just participants in the building process, but also participants in the innovation process, and the latter uses post-Keynesian pricing theory where prices are set according to markup procedures and vary with costs, but not directly with demand. This is in contrast to the general equilibrium, perfectly competitive price setting of neoclassical economics. Ive and his collaborators show a way towards better research in their emphasis on theory and the insistence that for building economics the analytical units are the industry and the firm, not the project. Ive's concern is that the processes involved in organising the production of buildings should be seen as a distinctive and defining element of our analysis of the industry.

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

Cited by 6 publications

References 8 publications

Application of a bottom-up approach to estimate economic impacts of building maintenance projects: cladding rectification program in Australia

Application of a bottom-up approach to estimate economic impacts of building maintenance projects: cladding rectification program in Australia

Reframing construction within the built environment sector

Graham Ive and the methodology of construction economics

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