Improving Security of Payment Building and Construction Industry

2. Introduction Page 18National Public Works Council IncImproving Security of Payment in the Building and Construction IndustryIBIS Business Information Service ("IBIS") estimates that the Construction Industry(ANZSIC code E4100) had the following characteristics in 1994/95:Industry turnover:$56.2 billionEmployment:589,900 peopleNumber of establishments: 91,885Average turnover per employee: $95,300Average turnover per establishment: $612,000Average employees per establishment: 6.4 peopleThe Construction Industry is Australia's second most fragmented industry after Agriculture asevidenced by the following table sourced by us from the Integrated Business Register of June1995, which categorises the 589,900 people employed in the industry in 1994/95 by size ofthe employing establishment:Number ofNumber of Employees Establishments %0 - 4 77,050 83.95 - 9 9,511 10.410 - 19 3,129 3.420 - 49 1,467 1.750 - 99 430 0.5100 + 298 0.191,885 100%IBIS estimates that the Construction Industry ranks 6th amongst the 17 industry divisions thatmake up the Australian economy.Also, IBIS estimates the average cost structure of the Construction Industry in 1994/95 was:$ billion %Industry Turnover 56.2 100Purchases of goods and materials 20.8 37Payments to Subcontractors 16.9 30Other selected expenses 5.1 9Wages and salaries 9.0 16Depreciation, insurance 1.1 2Interest expense 0.5 1Operating profit before tax 2.8 5IBIS estimates that Payments to Subcontractors comprise mainly labour costs.The IBIS estimates are based on sources such as ABS cat no 8140.0 Business Operations and