On shaky ground: Divergent industry demand trends have led to division revenue fluctuations

Divergent demand trends in downstream markets have affected the Construction division's performance over the past five years. Building construction markets have been subdued during this period. Demand surged to a record high in the non-building construction market in 2013-14 before winding back over the past four years due to project completions. Division revenue is expected to grow at an annualised 0.4% over the five years through 2017-18, to $356.4 billion. This includes the marginal forecast decline in industry revenue by 0.1% in 2017-18, stemming from the scaling back of investment in infrastructure and residential building projects...read more.

Industry Statistics & Market Size
Revenue
$356bn
Annual Growth 13-18
0.4%
Forecast Growth 18-23
Profit
Employment
990,000
Businesses
336,950

Industry Threats & Opportunities

  • Divergent demand trends have affected the division's performance over the past five years
  • The withdrawal of government stimulus spending has constrained demand across the division
  • Wider profit margins across building and infrastructure markets will aid division profitability
  • Industry Report - Industry Locations Chapter

    The distribution of enterprises across the Construction division is highly concentrated on Australia's eastern seaboard, which strongly correlates with the geographic distribution of the national population and economic activity. The most populous states including New South Wales, Victoria and Queensland currently account for 78.4% of industry enterprises, which is roughly in line with their combined share of Australia's population (77.0%), although these states account for about 80.1% of the value of total construction activity, reflecting the above average activity currently evident in Victoria. The...purchase to read more.

    Additional Insights for the Construction Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Construction Industry are

  • Ability to expand and curtail operations rapidly in line with market demand
  • Having contacts within key markets
  • Competing 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 division 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 division firms also carry out repairs and renovations, prepare mine sites, install utilities, and are involved 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
  • Winding down of government stimulus
  • Chart: Revenue Growth

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

  • Demand Determinants
    Major Markets
  • Residential building market
  • Private engineering construction market
  • Public engineering construction market
  • Private non-residential building market
  • Public non-residential building market
  • 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 (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    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 provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    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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