Depleted: The end of the mining boom has constrained revenue growth

Divergent trends in key building and infrastructure industries have constrained the Construction division's performance over the past five years. Building industries have grown their revenue over the period, supporting divisional revenue growth. However, reduced non-building construction activity has affected the division's performance. This revenue contraction has stemmed from the completion and winding back of major mining and engineering construction projects over the past five years.Divisional revenue is expected to expand only marginally over the five years through 2019-20, increasing at an annualised 0.5% to $423.7 billion. This includes an anticipated decline by 2.1% during the current year, associated with weaker investment in the infrastructure and building markets...read more.

Industry Statistics & Market Size
Revenue
$424bn
Annual Growth 15-20
0.5%
Forecast Growth 20-25
Profit
Employment
1.1m
Businesses
378,400

Industry Threats & Opportunities

  • Divergent demand trends have affected the division’s performance over the past five years
  • Contractors have derived some stimulus from investment in large-scale apartment developments
  • Wider profit margins across building and infrastructure markets will aid divisional profitability
  • Industry Report - Industry Investment Chapter

    The Construction division displays low capital intensity. Operators in the division primarily provide skilled trade and construction management services. The division's labour costs are expected to account for 18.1% of revenue in 2019-20, while depreciation charges (a proxy for capital input) account for an estimated 1.3% of revenue. Consequently, for every dollar invested in capital equipment, $13.92 is spent on labour in the current year.Operators across the construction industries extensively use capital equipment, including low-cost power tools and motor vehicles. The Construction division heavily relies on dry hire of plant and equipment on short-term arrangements, which reduces overall capital expenditure. Dry hire is the renting of equipment without an operator. Sev...purchase to read more.

    Additional Insights for the Construction Industry

    IBISWorld has determined the most important Key Success Factors for the Construction are:

  • Ability to expand and curtail operations rapidly in line with market demand
  • Having contacts within key markets
  • Ability to compete on tender
  • IBISWorld analysts also discuss how external factors such as Private non-residential construction capital expenditure and Capital expenditure on private dwellings in the Construction industry impact industry performance..

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    What's in this report

    What is the Construction Industry?

    Construction firms primarily construct buildings, roads, railroads, harbour or river works, transmission lines, pipelines and oil refineries. These firms are also involved in civil engineering and irrigation projects, and construct water, gas, electricity and sewerage infrastructure. Some construction firms also carry out repairs and renovations, prepare mine sites, install utilities, and take part in demolitions and excavations.

    Industry Products
  • Heavy industry and civil engineering construction
  • Residential building construction
  • Non-residential building construction
  • Building completion services
  • Building structure services
  • Installation trade services
  • Site preparation and other construction services
  • Industry Activities
  • General construction
  • Construction trade services
  • Installation trade services
  • Residential construction
  • Non-residential construction
  • Site preparation and other construction
  • Building completion services
  • Building structure services
  • Heavy industry and non-building construction
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Private non-residential construction capital expenditure
  • Capital expenditure on private dwellings
  • Capital expenditure by the public sector
  • year bond rate
  • Population
  • Residential housing loan rates

  • Current Performance
  • Enterprises and profitability
  • Division drivers
  • Chart: Revenue Growth

  • Industry Outlook
  • Profit and jobs growth
  • Residential developments
  • Non-residential building growth
  • Engineering construction
  • Table: Construction Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Construction Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Building Societies
  • Architectural Services
  • Professional, Scientific and Technical Services
  • Retail Property Operators

  • Key Selling Industries
  • Finance
  • Integrated Logistics
  • Professional Services
  • Wholesale Trade

  • Products & Services
  • Residential building construction
  • Heavy industry and civil engineering construction
  • Non-residential building construction
  • Installation trade services
  • Site preparation and other construction services
  • Building completion services
  • Building structure services
  • Chart: Construction Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Property developers
  • Private corporations
  • Households
  • Federal, state and local governments
  • Chart: Major Market Segmentation for the Construction Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Construction

  • Basis of Competition
  • Internal
  • External

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Construction Industry

  • Industry Globalization
    CIMIC Group Limited, LendLease Group,
  • Table: CIMIC Group Limited - financial performance
  • Table: LendLease Group - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Construction Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Construction Industry
    Includes:
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Construction Services
  • These are specialised trade service industries that include firms working in the areas of site preparation, building completion, building structure and installation services.
  • Non-Residential Building
  • A building primarily intended for uses other than long-term residential purposes.
  • Other Residential Building
  • A building other than a house that is primarily used for long-term residential purposes and contains more than one dwelling unit.
  • Residential Building
  • A building predominantly consisting of one or more dwelling units. Residential buildings can be houses or other buildings in which people live.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Construction market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Construction:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Construction market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Construction, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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