Productivity measurement of the construction industry in Australia

This research adopts the Malmquist total factor productivity model with Lovell's decomposition and renovated partial factor model to evaluate changes of productivity levels in Australia's construction industry. Research results find that the average annual productivity levels for Australian states are slowly growing, except for Queensland's total factor and capital productivities.

Input–output structures of the Australian construction industry

The Australian construction industry continues to play an important role in the national economy. Analysis using input–output tables makes it possible to understand the role of the construction industry in Australia’s economy and its relationships to other major industries over years. This study applies several economic indicators to investigate the construction industry’s contributions to gross national product and gross national income, as well as its backward and forward linkage indicators, and its output and input multipliers. The paper also investigates the purchases of goods and services by the construction industry from other sectors and its sales to other industries over the analysis period. Findings from this research may help policymakers to better understand the economic linkages between the construction industry and other major industries, and the structural changes in its inputs and outputs in relation to these others.

Using input-output data in life cycle inventory analysis

The impacts on the environment from human activities are of increasing concern. The need to consider the reduction in energy consumption is of particular interest, especially in the construction and operation of buildings, which accounts for between 30 and 40% of Australia's national energy consumption. Much past and more recent emphasis has been placed on methods for reducing the energy consumed in the operation of buildings. With the energy embodied in these buildings having been shown to account for an equally large proportion of a building's life cycle energy consumption, there is a need to look at ways of reducing the embodied energy of buildings and related products. Life cycle assessment (LCA) is considered to be the most appropriate tool for assessing the life cycle energy consumption of buildings and their products. The life cycle inventory analysis (LCIA) step of a LCA, where an inventory of material and energy inputs is gathered, may currently suffer from several limitations, mainly concerned with the use of incomplete and unreliable data sources and LCIA methods. These traditional methods of LCIA include process-based and input-output-based LCIA. Process-based LCIA uses process specific data, whilst input-output-based LCIA uses data produced from an analysis of the flow of goods and services between sectors of the Australian economy, also known as input-output data. With the incompleteness and unreliability of these two respective methods in mind, hybrid LCIA methods have been developed to minimise the errors associated with traditional LCIA methods, combining both process and input-output data. Hybrid LCIA methods based on process data have shown to be incomplete. Hybrid LCIA methods based on input-output data involve substituting available process data into the input-output model minimising the errors associated with process-based hybrid LCIA methods. However, until now, this LCIA method had not been tested for its level of completeness and reliability. The aim of this study was to assess the reliability and completeness of hybrid life cycle inventory analysis, as applied to the Australian construction industry. A range of case studies were selected in order to apply the input-output-based hybrid LCIA method and evaluate the subsequent results as obtained from each case study. These case studies included buildings: two commercial office buildings, two residential buildings, a recreational building; and building related products: a solar hot water system, a building integrated photovoltaic system and a washing machine. The range of building types and products selected assisted in testing the input-output-based hybrid LCIA method for its applicability across a wide range of product types. The input-output-based hybrid LCIA method was applied to each of the selected case studies in order to obtain their respective embodied energy results. These results were then evaluated with the use of a number of evaluation methods. These evaluation methods included an analysis of the difference between the process-based and input-output-based hybrid LCIA results as an evaluation of the completeness of the process-based LCIA method. The second method of evaluation used was a comparison between equivalent process and input-output values used in the input-output-based hybrid LCIA method as a measure of reliability. It was found that the results from a typical process-based LCIA and process-based hybrid LCIA have a large gap when compared to input-output-based hybrid LCIA results (up to 80%). This gap has shown that the currently available quantity of process data in Australia is insufficient. The comparison between equivalent process-based and input-output-based LCIA values showed that the input-output data does not provide a reliable representation of the equivalent process values, for material energy intensities, material inputs and whole products. Therefore, the use of input-output data to account for inadequate or missing process data is not reliable. However, as there is currently no other method for filling the gaps in traditional process-based LCIA, and as input-output data is considered to be more complete than process data, and the errors may be somewhat lower, using input-output data to fill the gaps in traditional process-based LCIA appears to be better than not using any data at all. The input-output-based hybrid LCIA method evaluated in this study has shown to be the most sophisticated and complete currently available LCIA method for assessing the environmental impacts associated with buildings and building related products. This finding is significant as the construction and operation of buildings accounts for a large proportion of national energy consumption. The use of the input-output-based hybrid LCIA method for products other than those related to the Australian construction industry may be appropriate, especially if the material inputs of the product being assessed are similar to those typically used in the construction industry. The input-output-based hybrid LCIA method has been used to correct some of the errors and limitations associated with previous LCIA methods, without the introduction of any new errors. Improvements in current input-output models are also needed, particularly to account for the inclusion of capital equipment inputs (i.e. the energy required to manufacture the machinery and other equipment used in the production of building materials, products etc.). Although further improvements in the quantity of currently available process data are also needed, this study has shown that with the current available embodied energy data for LCIA, the input-output-based hybrid LCIA appears to provide the most reliable and complete method for use in assessing the environmental impacts of the Australian construction industry.

A comparative study of construction industry size and structure between the UK and Australia and the significance of industry fragmentation

While comparing both the size and structure between the UK and Australian construction industries, this study reveals that the UK construction industry is about two and a half times larger than the Australian construction industry, and both industries are dominated by the proportion of small firms. The issue of fragmentation is characteristic of the construction industries in these two countries, and beyond. This study then develops a self recruiting-subletting cost indifference point model to explain why fragmentation occurs. Although the high proportion of small firms in the construction industry has been criticised as it prevents the exploitation of economies of scale, the self recruiting-subletting cost indifference point model theoretically proposes that subletting is usually profitable for construction firms. Thus the size distribution of the construction industry has a propensity to skew towards small firms.

Using a knowledge management evaluation framework for improving an ERP system - a Hong Kong construction industry case study

Organisations need to rely on leadership, information support and human capital in order to ensure a knowledge advantage over their competitors. Knowledge management (KM) provides organisations with sustainable competitive advantage, because it becomes extremely difficult for an organisation to cut expenditure and increase revenue by simply reengineering its business model. Project delivery and success has been traditionally viewed and measured as management of a three-legged stool, with the legs defined as cost, schedule and quality. However, KM can be linked to success by organisations becoming more effective as well as being more efficient.

This paper uses a KM framework, the Knowledge Advantage (K-Adv), developed initially for use by construction organisations. It assesses the impact of leadership and its supporting information communication technology infrastructure on the ability of people (by effectively creating, sharing, disseminating and using knowledge) to facilitate sustainable competitive advantage.

A case study that is presented is based upon the experience of a leading construction company using an Enterprise Resources Planning (ERP) system to demonstrate the effectiveness of KM from a cost management business unit perspective. Results are evaluated using a capability maturity model (CMM) - that forms the core of the K-Adv tool - to help improve processes that meet the needs of the organisation operating in a highly dynamic business environment. The case study is part of a broader doctoral research project that uses action learning to facilitate and measure ERP improvement.

Benchmarking the implementation of continuing professional development in the Victorian construction industry

In the state of Victoria, the state government has taken a leadership position on the potential benefit of introducing voluntary continuing professional development (CPD) for registered building practitioners (RBPs) in the construction industry. Benefits are believed to accrue to the Victorian community through a more highly skilled and managed SME construction sector, improved quality buildings with fewer defects and greater efficiencies gained by a reduction in industry internal and external operating costs. This research has identified appropriate industry and community benchmarks to enable a quantification of the costs and benefits that result from this policy. These benchmarks will enable the policymaking body of Victoria, the Building Commission (BC) to evaluate the effects of the implementation of its policy and contribute to informing the debate about the merits and possible drawbacks of such a policy in the construction industry in Victoria.

The proposed Victorian CPD policy will affect a whole industry sector. This pioneering policy approach is already being viewed as a touchstone for other jurisdictions in Australia and abroad. Consequently, this research project is considered by our industry partner to be pivotal in the leadership position that they are taking in Victoria. This investigation is being conducted by the research team under the auspices, guidance and with the cooperation of the Building Commission (BC) and the Building Practitioners Board (BPB) of Victoria. This policy research evaluation is necessary to assess the proposed implementation of CPD in the Victorian construction industry. The identification and creation of agreed and significant industry benchmarks are crucial to evaluating this policy initiative. These benchmarks will serve as independent yardsticks for assessing the impact of the new policy and are described and discussed in this paper.

Pathways to industry : work practices of undergraduate students in construction programs in Australia

This research reports the impact of work on undergraduate students enrolled in construction programs. Students responded to a questionnaire on the nature of their paid work while enrolled in full-time study in six universities across Australia. The results indicate that students are working on average 19 hours per week during semester time. The results indicate that students in the early years tend to undertake casual work that is not related to their degree. However, this pattern changes in the later years of the program, where students switch to roles in construction that does relate to their coursework. The students start working on average 16 hours in the first year of their degree, and the number rises to 24 hours in their final year. Past research suggests that students may be working to an extent beyond what is considered beneficial to their studies. Past research has shown that working long hours has a negative effect on the study patterns of undergraduate students. The implications of the amount of time working and the type of work are discussed. The paper concludes by suggesting that universities need a greater awareness of the impact of paid employment on student engagement.

Labour productivity measurement with variable returns to scale in Australia's construction industry

As an important productivity indicator, the change of labour productivity is one indispensable marker in determining the rise or fall of overall industrial performance. This study aims to address whether the labour productivity level of the Australian construction industry has, in fact, shown a huge improvement during the last few decades. This article constructs a measuring method estimating labour productivity changes based on the data envelopment analysis technique with variable returns to scale. By adopting a production frontier approach, the labour productivity index can be broken down into components attributable to efficiency change, technological progress and capital accumulation. The numerical results exemplified by a single-input and single-output system indicate that the average annual labour productivity levels of the construction industry are slowly growing in all the Australian states and territories. However, the year-on-year change in the overall labour productivity performance does not maintain a long-term increase over the period 1990–2008. The study forms the basis for further industrial productivity research. Proposals and recommendations are expected to be beneficial for making policy and strategic decisions to improve the performance of the construction industry.

Incentive or deterrent: which encourages greater focus on health and safety in the Victorian construction industry?

The Australian Government commissioned a Royal Commission into the building industry in Australia that reported to Parliament in August 2002. Volume 6 of this report, released in February 2003, discussed certain aspects in occupational health and safety in Australia and leaned toward deterrents as a means of achieving reform. This research defines both incentives and deterrents used to increase awareness of, and improve safety on, building sites in Victoria, a state of Australia. A pilot survey questionnaire was developed following a literature review and industry employer representatives were invited to participate. Industry awareness of Government incentive programmes was found to be low, with less than a quarter stating they read Government strategies. One fund that provides actual research monies into health and safety was known to very few of the respondents. Of the employers surveyed, the majority agreed that financial fines do act as a valid deterrent. Increases in worker compensation premiums were seen as the greatest deterrent due to the effect on company overheads and thus competitive tendering bids. Deterrent programmes were more readily acknowledged by employers as they had an element of self promotion with employers attempting to avoid their application.

Validation of the use of input-output data for embodied energy analysis of the Australian construction industry

This paper evaluates a recently developed hybrid method for the embodied energy analysis of the Australian construction industry. It was found that the truncation associated with process analysis can be up to 80%, whilst the use of input-output analysis alone does not always provide a perfect model for replacing process data. There is also a considerable lack in the quantity and possibly quality of process data currently available. These findings suggest that current best-practice methods are sufficiently accurate for most typical applications, but this is heavily dependant upon data quality and availability. The hybrid method evaluated can be used for the optimisation of embodied energy and for identifying opportunities for improvements in energy efficiency.

A comparative study on economic factors of construction industries in Australia and China

The construction sector produces the facilities needed for a large majority of the production of goods and services, in which a sizeable proportion of Gross Domestic Product is generated. Recent trends in the globalisation of construction markets indicate that many countries consider construction industry competitiveness as crucial, and are working to increase construction productivity, in particular where the construction industries play an important role in their economic development. This paper first points out the research importance in international construction. Based on economic analyses of construction industries, a study is then carried out to focus on the economic sizes and benefits of the Chinese construction industry and to compare them with the Australian construction industry. Results derived from such an international construction comparison will assist in the Australian construction communities understanding the construction markets and industries in China and will benefit in international construction participation and cooperation.

Investigating relationships of construction prices in Australia using cointegration analysis

Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Finds of this study reveal that the economic system in which the construction industry participants operate is characterized by a highly competitive, integrated marketplace, Especially in Melbourne and Sydney. But exclude Northern Territory and Queensland. Furthermore, the results of long term relationships estimation suggest that there are 15 pairs of regional construction prices have long term equilibrium relationships. Additionally, the causalities and diffusion among the construction price indices in six states and two territories of Australia are estimated in this study. These outcomes suggest that causal links between regions mainly exist among adjoining states.

Malmquist indices of total factor productivity changes in the Australian construction industry

Construction is an important industry and forms a vital part of national economics in the world. Factors affecting the productivity of the construction industry should be measured appropriately to reflect its development situation and economic performance. The Malmquist index method with a novel decomposition technique is employed to estimate the total factor productivity of the Australian construction industry during the period 1990-2007 and to analyse the factors affecting the technological change in the industry. Research results exemplified by two input variables and one output variable elaborate how construction technology, pure technical efficiency and scale economy take effect in the change of construction productivity. In addition, based on temporal and spatial comparisons, the analysis for construction productivities reveals their changes over time and across the country. Proposals and recommendations are expected to be beneficial for policy making and strategic decisions to improve the performance of the Australian construction industry.

The activities and impacts of part-time employment on full time undergraduate students in property and construction courses in Australia

This paper examines the extent of part-time employment of undergraduate students enrolled in property and construction related courses in five universities across Australia. Forty five percent of the students responded to a questionnaire on their part-time work. Past research reveals that there is need for a more accurate understanding as to why students seek part-time work to the extent that they do and that working long hours has a negative effect on the study patterns of undergraduate students. Increased employer work demands results in less time available for study and an inability to attend lectures because of work. There is growing concern that students are increasingly disinterested in connecting with the broader and total university experience and are instead, seeking to adopt a minimalist approach to education.

Analysis of current research for Property and construction students’ results reveals that students are working on average 18 hours per week during semester time. The students therefore appear to be working beyond what is considered beneficial to their studies, although their contextual understanding and work ethic improves.

The paper concludes with some approaches that could re- engage students into the learning process. It may be helpful to develop a partnership between the University and the industry thereby providing work experience that complements the program of study. Otherwise students may not get the range of experience they need and may struggle to find the linkages between theory and practice.