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2006 Census of Philippine Business and Industry (CPBI) - Construction for Establishments with Average Total Employment (ATE) of 20 and Over : Preliminary Results

Reference Number: 411
Release Date: 03 February 2009

General engineering construction industry dominates establishments with ATE of 20 and over
 

·  Based on the preliminary results of the 2006 Census of Philippine Business and Industry (CPBI) conducted nationwide, there were a total of 648 construction establishments with average total employment (ATE) of 20 and over.
 

·  General engineering construction industry was the biggest in terms of the number of establishments as this comprised more than half (61.6%) of the total establishments. Figure 1 shows the distribution of construction establishments with ATE of 20 and over by industry sub-class.

General engineering construction industry generates the highest employment
 

·  Employment in 2006 reached a total of 107,334. Of the total, 106,942 or 99.6 percent were paid employees.
 

·  Among industries, general engineering construction employed the highest number of workers reaching 67,885 or 63.2 percent of total employment. Non-residential building construction ranked a far second with 15,520 workers or 14.7 percent, followed by electrical and mechanical work at site of construction with 9,402 workers (8.7%). Figure 2 displays the distribution of employment by industry sub-class for construction establishments with ATE of 20 and over.

Average annual compensation is PhP135.8 thousand per construction worker
 

·  Total compensation paid by construction establishments with ATE of 20 and over amounted to PhP14.5 billion, translating to an average annual compensation of PhP135,813 per paid construction worker.
 

·  Among industries, building components installation contractors paid the highest average annual compensation amounting to PhP240,982. This was followed by establishments engaged in site preparation and renting of construction or demolition equipment with operator and non-residential building construction paying PhP185,327 and PhP144,305, respectively. Figure 3 displays the average annual compensation by industry sub-class for the construction establishments with ATE of 20 and over.

Total revenue amounts to PhP105.8 billion
 

·  Gross revenue earned in 2006 for construction establishments with ATE of 20 and over reached PhP105.8 billion. The general engineering construction industry was the top contributor with revenue of PhP78.4 billion or 74.1 percent of the total. Ranked a far second was non-residential building construction industry with PhP11.6 billion (11.0%), while establishments engaged in interior decoration and carpentry industry generated the least revenue with only PhP428.7 million (0.4%).

General engineering construction industry spends the highest
 

·  In 2006, total cost excluding compensation, incurred by construction establishments with ATE of 20 and over amounted to PhP81.0 billion. General engineering construction industry spent the highest cost at PhP59.8 billion or 73.9 percent. Interior decoration and carpentry industry recorded the lowest cost at PhP288.0 million (0.4%).

Water well drilling and water pump installation industry records the highest returns
 

·  Revenue-cost ratio, the revenue generated per peso cost, amounted to PhP1.31 for construction establishments with ATE of 20 and over.
 

·  Among industries, establishments engaged in water well drilling and water pump installation recorded the highest return with 1.78 while those engaged in painting and related work recorded the lowest with 0.83.

General engineering construction industry generates PhP23.3 billion in value added
 

·  Value added for construction establishments with ATE of 20 and over was estimated at PhP30.9 billion.
 

·  Industrywise, general engineering construction recorded the highest value added amounting to PhP23.3 billion (75.4%). On the other hand, establishments engaged in site preparation and renting of construction or demolition equipment with operator produced the lowest value added at PhP118.4 million (0.4%).

General engineering construction industry produces PhP79.0 billion in value of output
 

·  Value of output generated in 2006 by construction establishments with ATE of 20 and over reached PhP106.3 billion.
 

·  By industry, general engineering construction contributed the biggest share in the value of output as it grossed PhP79.0 billion (74.4%). Non-residential building construction ranked a far second with PhP11.5 billion (10.8%). Figure 4 presents the distribution of value of output by industry sub-class for construction establishments with ATE of 20 and over.


 

Building components installation contractors record the highest productivity
 

·  Labor productivity for construction establishments with ATE of 20 and over, measured as the ratio of value added to total employment, was PhP287,585 per construction worker.
 

·  Building components installation contractors registered the highest labor productivity at PhP466,467. Establishments engaged in painting and related work and general engineering construction industry ranked second and third with PhP414,040 and PhP342,936, respectively. Figure 5 illustrates labor productivity by industry sub-class for construction establishments with ATE of 20 and over.


 

Total change in inventories is at PhP3.8 billion
 

·  Change in inventories, defined as the value of ending inventory less the beginning, amounted to PhP3.8 billion in 2006. Among industries, general engineering construction recorded the highest with PhP3.2 billion, while establishments engaged in plumbing and related work and building components installation contractors recorded negative inventories.

Gross addition to fixed assets totals PhP1.5 billion
 

·  Gross addition to fixed assets in 2006 totaled to PhP1.5 billion with the general engineering construction industry recording the highest amount at PhP1.2 billion (79.4%). Painting and related work had the lowest with only PhP1.9 million (0.1%).

Subsidies in 2006 reaches PhP161.0 million
 

·  Subsidies in 2006 reached PhP161.0 million with the government providing the highest to the general engineering construction industry amounting to PhP145.5 million (90.4%). Establishments engaged in other building completion activities received the lowest government subsidy with only PhP0.02 million.
 


TECHNICAL NOTES

Introduction

The 2006 Census of Philippine Business and Industry (CPBI) is a comprehensive collection, compilation, evaluation, analysis and publication of data about the economic activities of the country. It is a source of information for establishing a benchmark level to measure and compare national, regional and provincial economic growth for the year 2006.

The field operations for the 2006 CPBI was undertaken in 2007. It covered 14 sectors of the economy:
 

A - Agriculture, Hunting and Forestry
B - Fishing
C - Mining and Quarrying
D - Manufacturing
E - Electricity, Gas and Water Supply
F - Construction
G - Wholesale and Retail Trade, Repair and Maintenance of Motor Vehicles, Motorcycles, and        Personal and Household Goods
H - Hotels and Restaurants
I - Transportation, Storage and Communications
J - Financial Intermediation
K - Real Estate, Renting and Business Activities
M - Private Education
N - Health and Social Work
O - Other Community, Social and Personal Service Activities

The census was undertaken by authority of five (5) legislative acts and presidential directives, namely: Commonwealth Act No. 591, Presidential Decree No. 418, Executive Order No. 121, Executive Order No. 352, and Executive Order No. 5.

This Special Release presents the preliminary results of the census for construction establishments with average total employment (ATE) of 20 and over. The construction sector is composed of 14 industry sub-class as follows:
 

F45100 - Site preparation
F45201 - Residential building construction
F45202 - Non-residential building construction
F45203 - General engineering construction
F45310 - Plumbing and related work
F45320 - Building components installation contractors
F45330 - Electrical and mechanical work at site of construction
F45340 - Water well drilling and water pump installation
F45390 - Building installations n.e.c.
F45410 - Painting and related work
F45430 - Interior decoration
F45440 - Carpentry
F45490 - Other building completion activities
F45500 - Renting of construction or demolition equipment with operator

Scope and Coverage

The unit of enumeration is the establishment. It is defined as an -economic unit under a single ownership or control, i.e. under a single legal entity, engaged in one or predominantly one kind of economic activity at a single fixed location".

For the construction sector, establishment is defined in operational terms as -the unit that is engaged in the production of the most homogeneous group of goods and services, usually at one location, but sometimes over a wider area, for which separate records are available that can provide data concerning production of these goods and services and the materials, labor and physical resources used in this production".

The scope of the 2006 CPBI was confined to the formal sector and it consists of the following:
 

*Corporations and partnership
*Cooperatives and foundations
*Single proprietorships with employment of 10 or more
*Single proprietorships with branches

Specifically, the 2006 CPBI covers the following:
 

  1. All establishments with ATE of 10 or more
  2. All establishments with ATE less than 10, except those with Legal Organization (LO=1, single proprietorship) and Economic Organization (EO=1, single establishment) that are engaged in economic activities by sectors mentioned above.

Sampling Design

For the construction sector, all establishments under the scope and coverage of the census were taken on a 100 percent basis.

Classification of Establishments

An establishment is categorized by its economic organization, legal organization, industrial classification, employment size, and geographic location.

Economic Organization

Economic organization refers to the organizational structure or role of the establishment in the organization. The following are the types of economic organization:
 

*Single establishment is an establishment which has neither branch nor main office

*Branch only is an establishment which has a separate main office located elsewhere

*Establishment and main office, both located in the same address and with branches elsewhere

*Main office only is the unit which controls, supervises and directs one or more establishments of an enterprise

*Ancillary unit other than main office is the unit that operates primarily or exclusively for a related establishment or group of related establishments or its parent establishment and provide goods or services that support but do not become part of the output of those establishments

Legal Organization

The legal organization provides the legal basis for ownership of the establishment. The following are the types of legal organization: br> 

* Single Proprietorship refers to a business establishment organized, owned, and managed by one person, who alone assumes the risk of the business enterprise.

* Partnership refers to an association of two or more individuals for the conduct of a business enterprise based upon an agreement or contract between or among them to contribute money, property or industry into a common fund with the intention of dividing profits among themselves.

* Government Corporation is a private corporation organized for private aim, benefit or purpose and owned and controlled by the government.

* Private Corporation is a corporation organized by private persons.

* Cooperative

Industrial Classification

The industrial classification of an economic unit is determined by the activity from which it derives its major income or revenue. The amended 1994 PSIC is utilized to classify units according to their economic activities.

The amended 1994 PSIC consists of an alpha character and 5 numeric digits. The alpha character, which represents the major division, is denoted by the characters A to Q. The first two numeric digits represent the division; the first three numeric digits, the group; the first four digits, the class; and the 5 digits, the sub-class.

Size of the Establishment

The size of the establishment is determined by its average total employment (ATE). The following are the employment size classification used in the 2006 CPBI:

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Geographic Classification

The geographic or physical location of the establishments was classified in accordance with the Philippine Standard Geographic Code (PSGC) as of December 30, 2006, which contains the latest updates on the number of regions, provinces, cities, municipalities and barangays in the Philippines.

The geographic domains of the 2006 CPBI for establishments with average total employment (ATE) of 20 and over are the provinces, independent component cities, chartered cities and highly urbanized cities and municipalities. On the other hand, the geographic domains for establishments with ATE of less than 20 are the regions.

Hence, the samples of the 2006 CPBI with ATE 20 and over shall provide data for 17 administrative regions, 81 provinces, 39 cities and municipalities. For samples with ATE less than 20, the data that will be presented up to the regional level only.

Response Rate

For construction establishments with ATE of 20 and over, a total of 577 out of 612 or 94.3 percent of sample establishments responded. These include receipts of -good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments. However, the effective response rate is 74.8 percent, or 458 out of the total workload.

 

CONCEPTS AND DEFINITION OF TERMS

 

Economic activity or Business - is the activity of the establishment as classified under the amended 1994 Philippine Standard Industrial Classification (PSIC). Generally, the main activity of the establishment is the establishment's principal source of income. If the establishment is engaged in several activities, its main activity is that which earns the biggest income or revenue.

Employment - is the number of persons who worked in or for this establishment as of November 15, 2005. The concept of employment as of the payroll November 15 was adopted for the first time in the 2002 ASPBI (reference year 2001).

Average total employment (ATE) - is the sum of the number of persons who worked in or for this establishment for all months of the year divided by 12, regardless of the number of months the establishment is in operation.

Paid employees - are all persons working in the establishment and receiving pay, as well as those working away from the establishment paid by and under the control of the establishment. Included are all employees on sick leave, paid vacation or holiday. Excluded are consultants, home workers, workers receiving pure commissions only, and workers on indefinite leave.

Salaries and wages - are payments in cash or in kind to all employees, prior to deductions for employees contributions to SSS/GSIS, withholding tax, etc. Included are total basic pay, overtime pay, and other benefits.

Value of output - represents the sum of the total value of products sold, receipts from contract work and industrial services done for others, receipts from goods sold in the same condition as purchased less cost of goods sold, fixed assets produced on own account, and change in inventories of finished products and work-in-progress (ending less beginning) .In the past surveys/censuses, estimation of value of output was not net of cost of goods sold but included change in inventory (ending less beginning) of goods for resale.

Cost of materials, fuels and electricity consumed and industrial services - refers to expenses incurred in the production of goods and industrial services such as materials and supplies purchased, fuels purchased, electricity purchased and industrial services done by others and change in inventory of materials, supplies and fuels (beginning less ending). In the past surveys/censuses, cost of materials, fuels and electricity consumed and industrial services also includes goods purchased for resale.

Fixed assets - are physical assets expected to have productive lives of more than one year and intended for use and/or being used by the establishment. Included are land, buildings, other structures and land improvements, transport equipment, machinery and equipment, furniture, fixtures, and other fixed assets.

Book value - of fixed assets is the initial value or acquisition cost of fixed assets less the accumulated depreciation.

Value added - represents the sum of census value added and value of non-industrial services done for others less the cost of non-industrial services done by others and other costs

Revenue - is the value of goods, products/by-products sold and/or services rendered to others whether paid in cash or is considered receivable by the establishment. Valuation of products/by products sold should be in producers price (ex-establishment), net of discounts and allowances, including duties and charges but excluding subsidies. It also include goods transferred and/or services rendered to other establishment belonging to the same enterprise as the said establishment which should be treated as sales or as if sold to a customer; and revenue from products on a contractual basis from materials supplied by the establishment.

Costs - refer to all expenses including compensation incurred during the year whether paid or payable. Valuation should be at market price including taxes and other charges, net of discounts, rebates, returns and allowances. Goods received from and services rendered by other establishment of the same enterprise are valued as though purchased.

Gross Addition to Fixed Assets - is the sum of costs of new and used fixed assets acquired during the year, cost of alteration and improvements done by others and cost of fixed assets produced by the establishment less the value of sales of fixed assets during the year.

Inventories - refer to the stocks of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation should be at current replacement cost in purchasers price at the indicated dates. Replacement cost is the cost of an item in terms of its present price rather than its original price.

Change in Inventories - is equivalent to the total value of inventories at the end of the year less the value at the beginning of the year.

Subsidies - are special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry or production and to protect it against competition.
 


Source:   National Statistics Office
                 Manila, Philippines