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Engineering Construction Activity, Australia methodology

Reference period
June Quarter 2019
Released
25/09/2019

Explanatory notes

Introduction

1 This publication contains estimates of engineering construction activity in Australia by both public and private sector organisations. The estimates were compiled from the Engineering Construction Survey (ECS).

2 These estimates together with results from the Australian Bureau of Statistics (ABS) Building Activity Survey provide a complete quarterly picture of building and construction activity in Australia.

Scope and coverage

3 The ECS aims to measure the value of all engineering construction work undertaken in Australia. This value excludes the cost of land and repair and maintenance activity, as well as the value of any transfers of existing assets, the value of installed machinery and equipment not integral to the structure and the expenses for relocation of utility services. However, a contract for the installation of machinery and equipment which is an integral part of a construction project is included.

4 Where projects include elements of both building and engineering construction (for example, electricity generation, heavy industrial plant) every effort is taken to exclude the building component from these statistics.

5 From the September quarter 2002, engineering construction activity in the External Territories of Australia is included in these statistics. Jervis Bay is included in New South Wales, while Christmas Island and Cocos (Keeling) Islands are included in Western Australia.

​​​​​​​Statistical unit

6 In the Engineering Construction Survey, the statistical unit used to represent businesses, and for which statistics are reported, is the Australian Business Number (ABN) unit, in most cases. The ABN unit is the business unit which has registered for an ABN, and thus appears on the Australian Taxation Office (ATO) administered Australian Business Register. This unit is suitable for ABS statistical needs when the business is simple in structure. For more significant and diverse businesses where the ABN unit is not suitable for ABS statistical needs, the statistical unit used is the Type of Activity Unit (TAU). A TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment data for similar economic activities. When a minimum set of data items is available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry subdivision and the TAU is classified to the predominant ANZSIC subdivision.

7 Further details about the ABS economic statistical units used in this survey, and in other ABS economic surveys (both sample surveys and censuses), can be found in Chapter 2 of the Standard Economic Sector Classifications of Australia (SESCA) 2008 (cat. no. 1218.0).

​​​​​​​Relationship with national accounts

8 Data on the value of work done on the construction of new residential buildings, alterations and additions to residential buildings, private sector non-residential buildings (from Building Activity, Australia (cat. no. 8752.0)) and the value of engineering construction activity (from Engineering Construction Activity, Australia (cat. no 8762.0)) are the major source data which are used to compile the national accounts estimates for private gross fixed capital formation on dwellings, and other buildings and structures. However, there are some adjustments to the survey data which are made in the process of compiling these national account series. Allowances are made for the value of building activity which is out of scope of the Building Activity Survey and the Engineering Construction Survey. Such activity includes work done on projects which fall below the size cut-offs used for the Building Activity Survey and also the value of work done which is undertaken without obtaining a building permit, either because such a permit is not required or because the requisite permit is not obtained. The national accounts estimates also make allowances for purchases (less sales) of buildings and other structures from (to) the public sector.

Sample revision

9 The survey frames and samples are revised each quarter to ensure that they remain representative of the survey population. The timing for creating each quarter's survey frame is consistent with that of other ABS surveys. This provides for greater consistency when comparing data across surveys.

​​​​​​​Classification

10 Ownership. Projects are classified as private sector or public sector according to the expected ownership of the project at the time of completion. When a project is undertaken as a Private Public Partnership (PPP), or other similar arrangement, these projects will be classified according to the expected ownership of the asset at the time of completion. Projects undertaken as PPP's may be classified as private sector although ownership of the asset could eventually reside with the public sector.

11 Sector. The public sector includes Commonwealth Departments and Authorities, State Departments and Authorities, Local Government Authorities, Water, Sewerage and Electricity Authorities and government owned businesses and Statutory Authorities. All remaining organisations are classified as private sector. This publication contains separate estimates for the private sector and:

Commonwealth, State and Territory Government
Local Government.

12 Type of construction. A project is classified to a category of construction without regard to end use. For example, a project involving coal handling equipment at an electricity generating plant is included under 'Heavy industry - Oil, gas, coal, bauxite, aluminia and other minerals' and not under 'Electricity generation, transmission and distribution'. Where a project involves more than one category of construction the project is included under the category which accounts for the major part of the contract in terms of value.

Reliability of the estimates

13 Since the estimates for private sector and public sector organisations are based on a sample of organisations they are subject to sampling error; that is, they may differ from the figures that would have been obtained if information for all organisations for the relevant period had been included in the survey. A measure of the likely difference is given by the relative standard error (RSE) of each estimate. There are about 2 chances in 3 that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all units had been included, and about 19 chances in 20 that the difference will be less than 2 standard errors. Approximate RSEs of the estimates can be found in datacubes in the Data downloads section.

14 An example of the use of RSEs is as follows. If the total value of work done during the quarter is $2,500m and the associated RSE is 0.5% then there are about 2 chances in 3 that the value which would have been obtained if there had been a complete collection would have been within the range $2,488m to $2,513m and about 19 chances in 20 that the value would have been within the range $2,475m to $2,525m.

15 Estimates that have an estimated relative standard error between 10% and 25% are annotated with the symbol ‘^’. These estimates should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with an RSE between 25% and 50% are annotated with the symbol ‘*’, indicating that the estimate should be used with caution as it is subject to sampling variability too high for most practical purposes. Estimates with an RSE greater than 50% are annotated with the symbol ‘**’ indicating that the sampling variability causes the estimates to be considered too unreliable for general use.

16 The imprecision due to sampling variability, which is measured by the RSE, should not be confused with inaccuracies that may occur because of inadequacies in the source of information, imperfections in reporting by respondents, and errors made in the coding and processing of data. Inaccuracies of this kind are referred to as non-sampling error, and may occur in any enumeration whether it be a full count or only a sample. Every effort is made to reduce the non-sampling error to a minimum by the careful design of questionnaires, efforts to obtain responses for all selected organisations, and efficient operating procedures.

17 Caution is advised in respect of the value of work commenced (and consequently, the value of work yet to be done) reported by the public sector. It is known that data reported for value of work commenced are a combination of the following: annual works budget estimates which are reported as commencements in the September quarter (and in some cases may subsequently be undertaken by the private sector); genuine commencements as defined in the Glossary, and reported quarterly; commencements being reported as equal to the value of work done for the quarter; commencements of major stages in the case of long-term projects.

​​​​​​​Seasonal adjustment

18 Since seasonally adjusted statistics reflect both irregular and trend movements, an upward or downward movement in a seasonally adjusted series does not necessarily indicate a change of trend. Particular care should therefore be taken in interpreting individual quarter to quarter movements.

19 From the June quarter 2003, the seasonally adjusted estimates are produced by the concurrent seasonal adjustment method which takes account of the latest available original estimates. The concurrent method improves the estimation of seasonal factors and, therefore, the seasonally adjusted and trend estimates for the current and previous quarters.

20 The revision properties of the seasonally adjusted and trend estimates have been improved by the use of autoregressive integrated moving average (ARIMA) modelling. ARIMA modelling relies on the characteristics of the series being analysed to project future period data. The ARIMA model is assessed as part of the annual reanalysis. For more information on the details of ARIMA modelling see feature article: Use of ARIMA modelling to reduce revisions in the October 2004 issue of Australian Economic Indicators (cat. no. 1350.0).

21 A more detailed review of concurrent seasonal factors will be conducted annually, generally prior to the release of data for the March quarter.

Trend estimates

22 Seasonally adjusted series can be smoothed to reduce the impact of the irregular component in the adjusted series. This smoothed seasonally adjusted series is called a trend estimate.

23 The trend estimates are derived by applying a 7-term Henderson moving average to the seasonally adjusted series. The 7-term Henderson average (like all Henderson averages) is symmetric but, as the end of a time series is approached, asymmetric forms of the average are applied. Unlike weights of the standard 7-term Henderson moving average, the weights employed here have been tailored to suit the particular characteristics of individual series.

24 While the smoothing technique described in paragraphs 22 and 23 enables trend estimates to be produced for recent quarters, it does result in revisions to the estimates for the most recent three quarters as additional observations become available. There may also be revisions because of changes in the original data and as a result of the re-estimation of the seasonal factors. For further information, see Information Paper: A Guide to Interpreting Time Series - Monitoring Trends, 2003 (cat. no. 1349.0).

​​​​​​​Chain volume measures

25 Chain volume estimates of the value of work done are presented in original, seasonally adjusted and trend terms in electronic tables 1 and 2.

26 While current price estimates of value of work done reflect both price and volume changes, chain volume estimates measure changes in value after the direct effects of price changes have been eliminated and therefore only reflect volume changes. The direct impact of the Goods and Service Tax is a price change, and hence is removed from chain volume estimates. The deflators used to revalue the current price estimates in this publication are derived from the same price data underlying the deflators compiled for the dwellings and new other building components, and the new engineering construction component, of the national accounts aggregate ‘Gross fixed capital formation’.

27 The chain volume measures of work done appearing in this publication are annually reweighted chain Laspeyres indexes referenced to current price values in a chosen reference year. The reference year is updated annually in the September quarter publication. Each year’s data in the value of work done series are based on the prices of the previous year, except for the quarters of the latest incomplete year which are based upon the current reference year. Comparability with previous years is achieved by linking (or chaining) the series together to form a continuous time series.

28 Chain volume measures do not, in general, sum exactly to the extrapolated total value of the components. Further information on the nature and concepts of chain volume measures is contained in the ABS Information Paper: Introduction of Chain Volume Measures in the Australian National Accounts (cat. no. 5248.0).

29 The factors used to seasonally adjust the chain volume measures are identical to those used to adjust the corresponding current price series.

Acknowledgment

30 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.

31 Users may also wish to refer to the following publications:

Building Activity, Australia (cat. no. 8752.0)
Building Approvals, Australia (cat. no. 8731.0)
Construction Work Done, Australia, Preliminary (cat. no. 8755.0)

ABS data available on request

32 As well as the statistics included in this and related publications, the ABS may have other relevant data available on request. Inquiries should be made to the National Information and Referral Service on 1300 135 070. The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.

Appendix - list of electronic tables

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Electronic tables

Not all series in the table go back to the earliest start date.

Engineering construction activity
Electronic table no.Start date
Value of work done: chain volume measures1September 1984
Value of work done, states and territories: chain volume measures2September 1986
Value of work done: current prices3September 1986
Value of work done, states and territories: current prices4September 1986
Activity, states and territories: original5September 1986
Activity, by type, Australia: original6September 1986
Work commenced by the private sector, by type, original7September 1986
Work done by the private sector, by type, original8September 1986
Work yet to be done by the private sector, by type, original9September 1986
Activity by the public sector, by type, original10September 1986
Activity for the public sector, by type, original11September 1986
Value of work commenced, by type and sector: original - New South Wales12September 1986
Value of work done, by type and sector: original - New South Wales13September 1986
Value of work yet to be done, by type and sector: original - New South Wales14September 1986
Value of work commenced, by type and sector: original - Victoria15September 1986
Value of work done, by type and sector: original - Victoria16September 1986
Value of work yet to be done, by type and sector: original - Victoria17September 1986
Value of work commenced, by type and sector: original - Queensland18September 1986
Value of work done, by type and sector: original - Queensland19September 1986
Value of work yet to be done, by type and sector: original - Queensland20September 1986
Value of work commenced, by type and sector: original - South Australia21September 1986
Value of work done, by type and sector: original - South Australia22September 1986
Value of work yet to be done, by type and sector: original - South Australia23September 1986
Value of work commenced, by type and sector: original - Western Australia24September 1986
Value of work done, by type and sector: original - Western Australia25September 1986
Value of work yet to be done, by type and sector: original - Western Australia26September 1986
Value of work commenced, by type and sector: original - Tasmania27September 1986
Value of work done, by type and sector: original - Tasmania28September 1986
Value of work yet to be done, by type and sector: original - Tasmania29September 1986
Value of work commenced, by type and sector: original - Northern Territory30September 1986
Value of work done, by type and sector: original - Northern Territory31September 1986
Value of work yet to be done, by type and sector: original - Northern Territory32September 1986
Value of work commenced, by type and sector: original - Australian Capital Territory33September 1986
Value of work done, by type and sector: original - Australian Capital Territory34September 1986
Value of work yet to be done, by type and sector: original - Australian Capital Territory35September 1986
Value of work done by the private sector, states and territories: original36September 1986
Value of work done by the public sector, states and territories: original37September 1986
Value of work done for the public sector, states and territories: original38September 1986
Data cubes
Excel format
Relative standard errors; by sector, stage and type of construction; Australiaavailable
Relative standard errors; by sector, stage and type of construction; States and Australiaavailable
Data Items Available by Sectoravailable

If the information you require is not available as a standard product or service, then ABS Consultancy Services can help you with customised services to suit your needs. Inquiries should be made to the National Information and Referral Service on 1300 135 070. The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.

Glossary

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Activity

Activity refers to value of a specific stage of the construction undertaken, e.g. work commenced, work done or work yet to be done.

Bridges

Includes those for the support of roads, railways, causeways and elevated highways.

Commencements (value of work commenced)

A project is regarded as having commenced when the site works begin, with the following exceptions:

  • Some public sector authorities are unable to report on this basis. In such cases, the authorities report the value of their annual works budget in September quarter each year.
  • For very large projects, where a significant amount of work is done off-site, the project may be commenced before the site works begin.
     

​​​​​​​Electricity generation, transmission and distribution

Includes power stations; substations; hydro-electric generating plants; associated work i.e. towers; chimneys; transmission and distribution lines.

​​​​​​​Harbours

Includes boat and yacht basins; breakwaters; retaining walls; docks and piers; terminals; wharves; dredging works; marinas.

​​​​​​​Heavy industry

This category is the total of ‘Oil, gas, coal, bauxite, aluminia and other minerals’ and ‘Other heavy industry’.

Oil, gas, coal, bauxite, aluminia and other minerals

Includes construction of production, storage and distribution facilities; refineries; pumping stations; construction of mines.

Other heavy industry

Includes construction of chemical plants; blast furnaces; steel mills; other industrial processing plants; ovens.

Pipelines

Includes oil and gas pipelines; urban supply mains for gas; pipelines for refined petroleum products, chemicals, foodstuffs, etc.

Railways

Includes tracklaying; overhead power lines and signals; platforms; tramways; tunnels for underground railways; fuel hoppers.

​​​​​​​Recreation

Includes golf courses; playing fields; racecourses; stadiums; swimming pools; landscaping; park construction.

Roads, highways and subdivisions

Includes parking areas; cycle paths; airport runways; pedestrian and vehicle overpasses; traffic lights; roundabouts; associated road drainage works; street and highway lighting; road resurfacing, kerbing and guttering, road tunnels.

Sewerage and drainage

Includes sanitary and storm sewers; sewage treatment plants; stormwater drains; drainage systems.

Telecommunications

Includes mobile phone, radio, television, microwave and radar transmission towers; telephone lines and underground cables; coaxial cables.

Type

Type refers to the category of construction undertaken, e.g. Roads, highways and subdivisions; Bridges; Railways; etc.

Value of work done

The value of work done for the private sector consists of the value of work done on prime contracts, plus speculative contracts, plus work done on own account. The value of work done for the public sector is the work done by the organisation’s own workforce and subcontractors.

Value of work yet to be done

The value of outstanding work for the project at the end of the period. Rise and fall and other cost variations can lead to increases or decreases in the value of work yet to be done.

​​​​​​​Water storage and supply

Includes dams; weirs; reservoirs; embankments for water diversion; water pipelines; mains and treatment plants; flood prevention and erosion; aqueducts; water conduits; systems conveying water to residences, commercial and industrial establishments.

Quality declaration - summary

Institutional environment

For information on the institutional environment of the Australian Bureau of Statistics (ABS), including the legislative obligations of the ABS, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.

Relevance

The Engineering Construction Survey measures the value of all engineering construction work undertaken in Australia (including Australian Territorial Waters and External Territories) and provides estimates by state, commodity and sector (public and private). It does not include construction of buildings i.e. houses, offices etc. For building construction see Building Activity, Australia (cat. no. 8752.0).

The main output from the survey is the value of work done and is available at the State and Territory level by the type of construction. Projects are classified as private sector or public sector according to the expected ownership of the project at the time of completion and are classified to a category of construction without regard to end use. The value of Engineering construction activity reported excludes the cost of land, repair and maintenance activity, the value of any transfers of existing assets, installed machinery and equipment not integral to the structure and the expenses for relocation of utility services. The installation of machinery and equipment which is an integral part of a construction project is included (see Directory of Statistical Sources for additional details).

Data is collected from the primary contractor (not subcontractor) of projects and selections are made from any business which may undertake Engineering Construction activity.

Timeliness

The survey is run quarterly with reference periods ending on March, June, September and December each year. Data is published in Engineering Construction Activity, Australia (cat. no. 8762.0) which is released approximately 14 weeks after the end of the reference period.

Accuracy

The sample of businesses approached each quarter is between 3000 and 3500 taken from the ABS business register. The response rate is normally between 90-95% and data is imputed for non-responding units. Selected businesses report on all of the engineering projects they are undertaking. A project is classified to a category of construction (bridges, roads) rather than to its end use eg mining. Data is collected separately for operations in each state. The sample is augmented by supplementary units which are identified from coverage checks as undertaking significant engineering construction work. The classification of work done for Public Private Partnerships and Joint Ventures can pose problems and may be classified as private sector although eventual ownership of the asset may reside with the public sector.

There are two principal sources of error in surveys, sampling error and non-sampling error. Non-sampling error arises from inaccuracies in collecting, recording and processing the data. Every effort is made to minimise non-sampling error by the careful design and testing of questionnaires, detailed checking of the reported data and direct follow up with providers where significant errors are detected. At the time of selections there is some undercoverage due to the way the population frame is constructed. An ongoing coverage exercise is conducted to identify significant engineering projects which improves coverage.

Sampling error occurs when a sample or subset of the population is surveyed rather than the entire population. One measure of the likely difference resulting from not including all of the population in the survey is given by the relative standard error. The relative standard errors for the main published tables are small and therefore the estimates can be used with confidence. However, some estimates of finer breakdown in engineering type such as the 'Value of Work Yet to be Done' for 'Recreation' should be used with caution. Further information on the reliability of estimates is available in the Explanatory Notes.

Revisions are made to the survey data as required as a result of new and updated information available from providers. Generally revisions are confined to the last 2 - 3 quarters.

Coherence

This data along with the value of work done on residential and non-residential buildings from Building Activity, Australia (cat. no. 8752.0) are the major source data used to compile the national accounts estimates for private gross fixed capital formation on dwellings, and other buildings and structures in Australia.

The collection has been undertaken since September 1986. From the September quarter 1999, the methodology of the survey was changed to use the ABS central business register which is stratified according to industry, using the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat no. 1292.0) and employment. The most recent impact on the survey was the change in ANZSIC classification from ANZSIC '93 to ANZSIC '06 from the September 2007 quarter. There has been no break in series resulting from the implementation of this change.

The change of the Telstra Corporation from the public sector to the private sector in November 2006 impacted on the public sector and private sector estimates from March 2007 quarter. See the paper Future Treatment of Telstra in ABS Statistics, 2007 (cat. no. 8102.0). Caution should be taken when comparing data across this period.

Preliminary estimates of the data are available in Construction Work Done, Australia (cat. no. 8755.0) along with preliminary estimates of building activity data.

Interpretability

There are a number of derived statistics and data transformations published to aid interpretation of the data. These include chain volume estimates, trend and seasonally adjusted estimates as well as the original estimates. While current price (original) estimates reflect both price and volume changes, chain volume estimates measure changes in value after the direct effects of price changes have been eliminated and hence only reflect volume changes. For further information please refer to the Explanatory Notes.

Engineering Construction Activity, Australia (cat. no. 8762.0) contains Explanatory Notes and a Glossary which provide further information about data sources, terminology and other technical aspects of the series.

Accessibility

If the information you require is not available as a standard product or service, then ABS Consultancy Services can help you with customised services to suit your needs. Inquiries should be made to the National Information and Referral Service on 1300 135 070. Alternatively, please email client.services@abs.gov.au. The ABS Privacy Policy outlines how the ABS will handle any personal information you provide to us.

Abbreviations

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$bbillion (thousand million) dollars
$mmillion dollars
ABNAustralian Business Number
ABSAustralian Bureau of Statistics
ACTAustralian Capital Territory
ANZSICAustralian and New Zealand Standard Industrial Classification
ATOAustralian Taxation Office
Aust.Australia
ECSEngineering Construction Survey
NSWNew South Wales
NTNorthern Territory
qtrquarter
QldQueensland
RSErelative standard error
SASouth Australia
Tas.Tasmania
TAUtype of activity unit
Vic.Victoria
WAWestern Australia