No Case to Answer: Productivity Performance of the Australian Construction Industry

This article examines the productivity performance of the Australian construction industry and identifies some of the key factors affecting productivity growth. It also critically assesses the recent Productivity Commission (1999) report on the construction industry. In particular, the article challenges the argument of the Productivity Commission that a high level of unionisation within the industry is adverse for productivity growth. Moreover, the recommendations of the Commission directed at increasing productivity within the industry are argued to exacerbate those structural features of the construction industry which impose a constraint on productivity growth. The primary data sources are national and international official economic data on the industry and a number of case studies of major city building projects undertaken by the authors. The study finds that the Australian construction industry is within the top three OECD countries in terms of construction output per person employed.