Australia's Construction Industry: A Key Driver of Economic Growth

The construction industry in Australia is a significant contributor to the country's economy, accounting for 8% of GDP and employing over 1.1 million people. The sector has experienced rapid growth, with commercial and residential projects increasing by 9.5% and 7.3%, respectively, in 2018. However, there are concerns about a potential downturn in the industry, which could negatively impact employment rates. To mitigate this risk, the government should focus on supporting the construction industry through initiatives that promote growth and development. Furthermore, building regulations play a crucial role in ensuring safety and sustainability in construction work, with standards such as fire resistance, services and equipment, structure adequacy, access and egress, provisions for health and amenity, and sustainability and energy efficiency being key considerations.

Construction Industry in Australia

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Construction Industry in Australia
Table of Contents
Introduction.................................................................................................................................................2
Objectives................................................................................................................................................2
Background Information..............................................................................................................................2
Government and Politics.........................................................................................................................3
Demography............................................................................................................................................3
Economy..................................................................................................................................................4
Construction industry..................................................................................................................................4
Economy and employment......................................................................................................................5
Building regulation..................................................................................................................................5
Conclusion...................................................................................................................................................5
References...................................................................................................................................................7

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Construction Industry in Australia
Introduction
This paper has been explored to study the construction industry in Australia. The aim of this
paper is to gain an insight into the construction industry as well as an understanding of the
challenges and opportunities available in the construction industry of Australia. This study will
also help in improving the capacity to deal with the difficulties in the construction project and
deliver quality services. To accomplish this paper, background information about the
construction industry of Australia has been provided. Apart from this, discussion on government
and politics, demography, economy, construction industry including economy and employment,
and building regulations have been explored.
Objectives
The objective of this paper is to provide an overview of the construction industry of Australia
along with its impact on the economy of Australia.
Background Information
Australia is a country as
well as a continent. In
terms of area, Australia is
the smallest continent in
the world. On the other
hand, Australia is the sixth
largest country in the world. It is located between the Indian
and

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Construction Industry in Australia
Pacific oceans. It is also surrounded by extensive seas. There are several plants and animals in
Australia which are found nowhere in the world. The official name of Australia is “The
Commonwealth of Australia.” It is made up of six states in which five are on the mainland such
as Queensland, Western Australia, Victoria, New South Wales, and South Australia (Williams et
al., 2018). The sixth one is the island states of Tasmania. The national capital of Australia is
Canberra. There are two territories on the mainland of Australia such as the small Australia
Capital Territory as well as the large Northern Territory. Sydney (New South Wales) is the most
populous city of Australia. Sydney is also the largest city of Australia in terms of area. Total land
area of Australia is 7,617,930 sq. km while total water area is 68,920 sq. km. Thus, total area
including land and water is 7,686,850 sq. km. The length of Australia is 3,155 km and width is
4,042 km.

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Construction Industry in Australia
Government and Politics
The administrative system of Australia is a federation of six states. It is two self-governing
territories and both territories have their own constitutions, laws, governments, as well as
parliaments. The central government of the country is called the Commonwealth government or
the federal government. The territory government, as well as the state government, is based on
the same principles of parliamentary government. The federal government has been established
by the constitution of Australia by facilitating for the executive government, parliament, as well
as judicature (Grant and Drew, 2017). These three are also called as three arms of the
government. Some features of the government system of Australia are not set down in the
constitution. But those features are based on the convention as well as custom.
Demography
The ancestors of most of the Australians are the British Isles. It has been found that only 3% of
the Australians are considered aboriginal or indigenous people. Australia's population is around
24 million people. More than 90% of the population of the country lives in urban areas. Australia
is the ethnically most diverse country in the world (Biddle et al., 2015). More than 25% of the
population of the country is from outside of Australia which makes it a highly culturally diverse
country. Most of the people in Australia speak English. Australia is one of the most developed
countries in the world.
Economy
The freedom score of the economy of Australia is 80.9. Thus, the economy of Australia is the 5th
freest economy in the world in the 2019 index. Among the Asia-Pacific nations, Australia is one
of the wealthiest nations. It has experienced economic expansion for more than two decades. The

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Construction Industry in Australia
economy of Australia is characterized by a mixed economy. The GDP of the country in the year
2018 was $1.5 trillion. In the same year, the country became the largest country in terms of
median wealth per adult (Findlay and Garnaut, 2017). The country is also the 20th largest
importer while 25th largest exporter of the products. The GDP growth rate is 0.2% in the 4th
quarter of 2018. The economy of the country is mostly dominated by the service sector which
comprises of 61.1% of GDP. It also contributes 79.2% in employment (Rees et al., 2016).
Construction industry
The construction industry of Australia is one of the fastest as well as the largest growing sector.
Commercial construction work in Australia was increased by 9.5% in 2018. Residential and
public works was also increased by around 7.3%. The construction industry in Australia is
growing very rapidly. It shares a larger share in the overall GDP of the country which is 8% of
the total GDP. It contributes $134.2 billion in the Australian economy. It also contributes
significantly to increasing the rate of employment. The construction industry significantly
influences the population growth of the country, labor forces, technology, as well as housing
(Ferguson et al., 2017). It is being expected that the investment in the construction industry will
further increase because the size, productivity, as well as the value of the construction industry is
increasing considerably (Rahmani et al., 2017).
Economy and employment
The construction work in Australia is continued to rise by 2% every quarter. Productivity has
also been increased in the construction industry by 2.8% annually. More than 1.1 million people
are engaged in the construction industry as an employee. It is also being expected that the
construction industry will boost employment generation by 3% by the next year. It is also being

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Construction Industry in Australia
expected that prefabricated construction will grow by 5% every year (Detsimas et al., 2016). The
construction industry is the third largest employer in the country after healthcare as well as the
retail sector. However, it is also being forecasted that the construction industry is down turning
and construction activities are reducing which is not a good sign for the country. Thus, the
government should focus on construction industry and help in its growth and development so
that the rate of unemployment can be reduced. Currently, the unemployment rate is 5.2% which
is one of the major concerns of the government.
Building regulation
There is a need to follow certain standards in order to ensure safety in construction work. NCC
(The National Construction Code) has designed guidelines which have entitled minimum
necessary requirements for sustainability, health, safety, and amenity while designing as well as
constructing new buildings (Meacham, 2016). The following are the standards which should be
followed;
 Fire resistance
 Services and equipment
 Structure adequacy
 Access ad egress
 Provisions for the health and amenity
 Sustainability and energy efficiency
Building Act 1975 of Australia governs all the building work in Australia. It also empowers
regulations of some aspects of building as well as structures.
Building Act 2002 helps in controlling building activities along with the use of the building.

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Construction Industry in Australia
Conclusion
It can be concluded that the construction industry of Australia is very effective in contributing to
the overall GDP of the country. It also contributes significantly to generating employment within
the country. However, the construction industry is facing a downturn which should be improved
in order to mitigate the negative impact of the construction industry on the economy of the
country.

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Construction Industry in Australia
References
Biddle, N., Khoo, S.E. and Taylor, J., 2015. Indigenous Australia, white Australia, multicultural
Australia: the demography of race and ethnicity in Australia. In The international
handbook of the demography of race and ethnicity (pp. 599-622). Springer, Dordrecht.
Detsimas, N., Coffey, V., Sadiqi, Z. and Li, M., 2016. Workplace training and generic and
technical skill development in the Australian construction industry. Journal of
Management Development, 35(4), pp.486-504.
Ferguson, M., Eaton, M.H., Procter, N. and Caston, M., 2017. THE IMPACT OF MATES IN
CONSTRUCTION: A MIXED-METHODS STUDY OF GAT AND CONNECTOR
TRAINING IN THE SOUTH AUSTRALIAN CONSTRUCTION INDUSTRY.
Findlay, C. and Garnaut, R., 2017. The political economy of manufacturing protection:
Experiences of ASEAN and Australia. Routledge.
Grant, B. and Drew, J., 2017. Local Government in Australia. History, Theory and Public Policy.
Singapore: Springer.
Meacham, B.J., 2016. Sustainability and resiliency objectives in performance building
regulations. Building Research & Information, 44(5-6), pp.474-489.
Rahmani, F., Maqsood, T. and Khalfan, M., 2017. An overview of construction procurement
methods in Australia. Engineering, Construction and Architectural Management, 24(4),
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Rees, D.M., Smith, P. and Hall, J., 2016. A Multi‐sector Model of the Australian Economy.
Economic Record, 92(298), pp.374-408.
Williams, A.N., Ulm, S., Sapienza, T., Lewis, S. and Turney, C.S., 2018. Sea-level change and
demography during the last glacial termination and early Holocene across the Australian
continent. Quaternary Science Reviews, 182, pp.144-154.