Meriton Company Analysis: Construction, Market, and Robotics Impact

This report provides a comprehensive analysis of the Meriton Group Company, a prominent player in the Australian construction industry. It begins with an overview of Meriton's operations, its contributions to the Australian economy, and its services including residential apartment development and property management. The report then delves into the Australian construction industry, highlighting its significant contribution to the nation's GDP, employment figures, and market structure, characterized as monopolistic competition. A key focus is on the recent introduction of the Hadrian X robot by Fastbrick Robotics, examining its potential effects on market supply, price, and quantity. The analysis concludes by discussing the likely impacts of this technological advancement on the housing market and the broader construction landscape. References and links to relevant sources are also provided.

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AN ANALYSIS OF MERITON GROUP COMPANY
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Company and Industry Description
An overview of Meriton Group Company
Meriton Group Company is a privately owned Australian construction company which
deals with the development of apartments and building of residential homes. The
company was founded during the year 1963 by the managing director, Harry Triguboff
AO. The company has a significant contribution to the Australian construction sector
and the entire economy. It has been ranked as the Australian largest apartment
developer and also the biggest constructor of residential homes in Australia. The
company solely bases its operations in Australia having majorly focused on Queensland
and New South Wales. It has its headquarters in New South Wales in Sydney city which
is among the biggest cities in Australia. Since its establishment, the company has built
more than 75000 residential apartments some of which are ranked among the tallest
towers made for residential purpose in Australian east coast region “(Anon, Managing
Director)”. Apart from construction of residential apartments, the company also offers
various services some of which include leasing, sales, and management of the property
and also luxurious accommodation services under its brand by the name Meriton suites
which operate in more than 18 locations in Australia. The total number of qualified staff
employed by the company is estimated to be 950 “(Anon, TOP 500 PRIVATE
COMPANIES, 2018)”. This is quite a huge number as compared to many construction
companies which only employ less than 20 employees. The company contributes
approximately 0.05% of the gross domestic product of Australia. This is a significant
contribution towards the Australian economic growth as a few companies can
individually reach this level especially in the construction industry where the majority of
companies are small while others are sole proprietorships which rarely employ people.
In a nutshell, Meriton Group Company has been performing well since its establishment
and has expanded at a fast pace and better results are anticipated in the future as the
Australian housing sector is doing well.
“An Overview of the Australian Construction Industry”
The Meriton Group Company is in the Australian construction industry. The construction
industry of Australia contributes significantly to the nation’s economic growth. It has
been ranked position three industry in Australia after the mining and the finance
industries. The industry has its operations both in the Australian private and public
sectors in three main categories of activities namely the Engineering construction,
residential and non-residential constructions. Businesses operating in the sector are
approximated to be 348400 according to the “Australian Bureau of Statistics” register.
The industry raises an estimate of $365 billion in terms of revenue to the Australian
economy. With this revenue, the industry contributes around 8 percent of the Australian
total gross domestic product which is a significant contribution towards the nation’s
economic growth (“Australian Industry Group, 2015”). Considering employment,
currently the industry employs more than one million people which statistics showing
that employment in the industry has been on the rise since the year 2012. This
represents approximately 9 percent of the total Australian labor force. The following
data shows the industry’s total employment from the year 2012 to 2018.

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Year
Number of employees
(000s)
2012 983.5
2013 989.4
2014 1027.1
2015 1040.6
2016 1088.4
2017 1131.7
2018 1179.1
The graph for the data is as shown below.
2012201320142015201620172018
850
900
950
1000
1050
1100
1150
1200
Number of employees (000s)
Number of employees
(000s)
Year
Employed People (000s)
From the data obtained, it is evident that the industry has been expanding for the past
years with statistics showing that the industry’s productivity has been increasing by
approximately 2.8 percent on an annual basis. The industry’s growth is estimated to be
2.5 percent for the five years and hence its contribution towards the nation’s overall
economic growth is anticipated to increase in the future. The industry’s excellent growth
has been contributed by various factors such as the Australian population growth rate
which has been noted to be 1.6 percent on annual basis, improvement in the Australian
housing sector (Paris 2017, p.17) and the nation’s improvement in construction
technology especially the adoption of construction software which enables the industry
to save over $25 billion annually among others.
The Market Structure of the Australian Construction Industry
Based on the number of businesses and the market share, the Australian construction
industry can be categorized as a monopolistic competition market structure (Bertoletti
and Etro 2016, p.1217). The industry consists of many businesses which are estimated
to be 348400. The businesses operating in the industry are classified into sole

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proprietors, who are non-employing, small with less than 20 employees, medium with
20 to 199 employees and large businesses with 200 and above employees. Sole
proprietors consist of many small businesses approximately more than 200000 and
account for 60 percent of the total market share. Small businesses are approximately
131546 in number and account for 38 percent of the total market share. Medium
businesses are approximately 4698 accounting for 1.3 percent of the total market share.
Large businesses which consist of the key players in the industry account for only 0.1
percent of the total market share having been estimated to be 197 in number. Some of
these key players include CPB Contractors, Lendlease, CIMIC Group, Metricon, Meriton
Group and Probuild among others (Gold 2015, p.26). Due to the huge number of
companies in the industry which have limited market share, the companies end up
making a normal economic profit as it is with firms in the monopolistic competition
market structure in the long-run period as shown in the graph below.
From the above diagram, businesses in the industry maximize profit at a point whereby
the marginal cost and revenue are equal. At this point, the businesses make normal
economic profits (Feenstra 2010, p.1) and any attempt to hike prices may lead to severe
losses and make the business to be competed out of the industry.
An Analysis of a Recent Event in the Australian Construction Industry
Introduction of Hadrian X Robot by Fastbrick Robotics
Recently, Fastbrick Robotics under the leadership of its Chief Executive Officer Mark
Pivac responded to the increased demand for housing and a decline in the construction
skilled labor force in Australia by introducing a construction robot by the name Hadrian
X “(Freelancer, 2018)”. the robot has specialized technology and is capable of
constructing a residential house within 2 days. The robot can adjust accordingly to

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climatic changes and avoid inaccuracy in bricklaying as it uses “precision technology
Dynamic Stabilization Technology (DST)”. The robot is accurate and fast approximately
by close to 20 times as compared to human beings. During the month of November
2018, the robot was able to construct a 180-square three bedroom and two-bath home
in less than 72 hours after it was tested for compliance with various requirements in
building “(Anon, 2018)”.
Likely Effects of Hadrian X Introduction on Market Supply
The introduction of Hadrian X robot in construction is likely to increase the market
supply for housing in Australia. This is due to the fact that the machine is speed and
accurate and has the capability for constructing houses within a short period of time.
Evidence is available as it was able to construct a three bedroom house within 72
hours. The increase in market supply will be of benefit to Australians as the demand for
affordable housing is currently high with the growing Australian population (Bogue 2018,
p.1).
Likely Effects on Market Price and Quantity
The introduction of Hadrian X will definitely lower the market price for houses and
increase the quantity supplied as well as that demanded. This is explained by the use of
the diagram below.
The introduction of Hadrian X is likely to increase the aggregate supply for housing in
Australia and hence this will shift the aggregate supply curve towards the right direction
from point AS0 to AS1. This will lead to an increase in the market quantity from Q0 to Q1
whilst on the other hand the market price will decrease from P0 to P1 as indicated in the
diagram above.

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References
Bertoletti, P. and Etro, F., 2016. Monopolistic competition when income matters. The
Economic Journal, 127(603), pp.1217-1243.
Bogue, R., 2018. What are the prospects for robots in the construction
industry?. Industrial Robot: An International Journal, 45(1), pp.1-6.
Feenstra, R.C., 2010. Measuring the gains from trade under monopolistic
competition. Canadian Journal of Economics/Revue canadienne d'économique, 43(1),
pp.1-28.
Gold, A., 2015. Giants of industry. Property Australia, 29(2), p.26.
Paris, C., 2017. Housing Australia. Macmillan International Higher Education, 47(63),
pp.17-43.
Links
Anon, 2018. Aussie bricklaying robot takes on tradies, building three-bed house in 72
hours. SmartCompany. Available at:
https://www.smartcompany.com.au/startupsmart/news/aussie-bricklaying-robot-house-
three-days/ [Accessed May 26, 2019].
Anon, Managing Director, Harry Triguboff. Meriton. Available at:
https://www.meriton.com.au/about-us/harry-triguboff/ [Accessed May 26, 2019].
Anon, TOP 500 PRIVATE COMPANIES 2018. Meriton Properties Pty Limited. Available
at: https://www.ibisworld.com.au/australian-company-research-reports/construction/
meriton-properties-pty-limited-company.html [Accessed May 26, 2019].
Freelancer, 2018. There's a Robot That Can Lay a Residential House in 2
Days. Particle. Available at: https://particle.scitech.org.au/tech/new-robotics-technology-
set-change-construction-industry/ [Accessed May 26, 2019].
https://particle.scitech.org.au/tech/new-robotics-technology-set-change-construction-
industry/