Skip to main content
Release Date :
Reference Number :
2019-125

Non-residential building constructions industry leads the sector in terms of number of establishments

Based on the final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI), there were 1,877 establishments engaged in Construction in the formal sector of the economy.

Among construction industries, non-residential building constructions recorded the highest number of establishments with 462 or 24.6 percent of the total. This was followed by construction of roads and railways with 372 establishments or 19.8 percent share to the total. Residential (dwelling) building constructions placed third with 299 establishments or 15.9 percent.

Figure 1 shows the percentage distribution of all Construction establishments by industry sub-class in 2016.

 

Non-residential building constructions industry employs most number of workers

In 2016, Construction establishments employed a total of 327,279 employees. Paid employees constituted 326,534 or 99.8 percent of the total employment while the remaining 745 or 0.2 percent were unpaid workers.

At the industry level, non-residential building constructions (92,326 workers) hired the highest number of workers, followed by construction of roads and railways (92,171 workers), each sharing 28.2 percent to total. Electrical installation placed third with 39,912 workers or 12.2 percent share to the total.

Figure 2 shows the distribution of employment for all Construction establishments by industry sub-class in 2016.

The average number of workers per establishment for the sector was recorded at 174 in 2016. In addition, the following industries recorded an average number of workers per establishment of more than the national average:

• Construction  of  roads  and  railways, 248 workers per establishment
• Other building completion and finishing activities, 233 workers per establishment
• Site preparation, 217 workers per establishment
• Non-residential  building  constructions, 200 workers per establishment
• Plumbing, heat and air-conditioning installation, 196 workers per establishment
• Construction of utility projects, 184 workers per establishment
• Other construction installation, 180 workers per establishment

 

Construction of other civil engineering projects industry pays the highest average annual compensation

Total compensation paid in 2016 amounted to PHP72.3 billion, which translates to an average annual compensation of PHP221,507 per paid employee.

Among industries, construction of other civil engineering projects paid the highest average annual compensation of PHP386,662 per paid employee. Floor and wall tiling or covering with other material, which paid an average annual compensation of PHP359,910 per paid employee, followed next.

Other industries that exceeded the national average annual compensation in 2016 were:

• Site preparation, PHP259,314 per paid employee
• Construction of roads and railways, PHP253,743 per paid employee
• Non-residential building constructions, PHP250,185 per paid employee
• Carpentry, PHP248,644 per paid employee
• Electrical installation, PHP231,406 per paid employee

Figure 3 presents the average annual compensation of employees for all Construction establishments by industry sub-class in 2016.

 

Non-residential building constructions industry generates highest value of output

Total value of output generated by all construction establishments in 2016 amounted to PHP436.8 billion. The bulk of output value generated by the top three industries reached PHP343.0 billion or 78.5 percent of the total. These industries were non-residential building constructions with output value of PHP169.8 billion or 38.9 percent of the total; construction of roads and railways with PHP132.0 billion (30.2%); and electrical installation with PHP41.3 billion (9.5%).

Figure 4 shows the percentage distribution of value of output for all Construction establishments by industry sub-class in 2016.

 

Non-residential building constructions industry spends the most

Total expense incurred in 2016 from business operations of the sector amounted to PHP403.0 billion. Among industries, non-residential building constructions incurred the highest expense amounting to PH155.4 billion or 38.6 percent of the total, followed by construction of roads and railways with PHP124.8 billion or 31.0 percent. Electrical installation came third with a total expense of PHP37.2 billion (9.2%).

 

Other construction installation industry records the highest return

Income per peso expense ratio for the sector was recorded at 1.12, indicating that for every peso spent, an income of PHP1.12 was realized. Among industries, other construction installation recorded the highest income per peso expense ratio of 1.80.

Other industries with income per peso expense ratio of at least 1.12 were:

• Electrical installation, 1.22 income per peso expense
• Carpentry, 1.12 income per peso expense
• Non-residential building constructions, 1.12 income per peso expense

 

Non-residential building constructions industry is the highest contributor to value added

In 2016, value added generated by all construction establishments reached PHP161.2 billion. The top three industries, in terms of value added, contributed PHP125.8 billion or 78.1 percent of the total. Non-residential building constructions generated the biggest share to total value added amounting to PHP54.8 billion or 34.0 percent of the total. This was followed by construction of roads and railways with PHP51.8 billion (32.2%). Electrical installation placed third with PHP19.1 billion (11.9%).

 

Floor and wall tiling or covering with other material is the most labor productive industry

Labor productivity, defined as value added per worker, was estimated at PHP492.5 thousand per worker for the construction sector. The top three industries were: floor and wall tiling or covering with other material with PHP875.6 thousand per worker, construction of other civil engineering projects with PHP628.2 thousand per worker, and non-residential building constructions with PHP593.8 thousand per worker.

Figure 5 presents the labor productivity for all Construction establishments by industry sub-class in 2016.

 

Construction of roads and railways industry contributes the most to gross addition to tangible fixed assets

Gross addition to tangible fixed assets, defined as capital expenditures less sale of fixed assets, was valued at PHP7.7 billion in 2016.

Construction of roads and railways with PHP4.6 billion, accounted for more than half (60.0%) of the total gross addition to tangible fixed assets, followed by non-residential building constructions with PHP1.6 billion or 20.8 percent. Construction of other civil engineering projects ranked third with PHP0.5 billion or 7.1 percent share to total.

 

No subsidy received in 2016

The sector did not receive any government subsidy in 2016.

 

 

 

(Sgd.) ROSALINDA P. BAUTISTA
(Director II)
Officer-in-Charge
Sectoral Statistics Office

 

 


 

TECHNICAL NOTES

 

Introduction

This Special Release presents the final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for all Construction (Sector F) establishments.

The 2016 ASPBI is one of the designated statistical activities of the Philippine Statistics Authority (PSA). Data collected from the survey provide information on the levels, structure, performance, and trends of economic activities of the formal sector in the entire country for the year 2016.

The survey was conducted nationwide in 2017 with the year 2016 as the reference period of data, except for employment which is as of November 15, 2016. 

Establishment Data Management System (EDMS) was still utilized in the decentralized processing of the 2016 ASPBI questionnaires in the provinces as well as the online accomplishment of questionnaire through PSA website.

Data are presented at the national and industry sub-class or 5-digit 2009 Philippine Standard Industrial Classification (PSIC) level.

 

Legal Authority

The conduct of the 2016 ASPBI is authorized under Republic Act 10625 known as the Philippine Statistical Act of 2013 - Reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities.

 

Scope and Coverage

The 2016 ASPBI covered establishments engaged in 18 economic sectors classified under the 2009 PSIC, namely:

• Agriculture, Forestry and Fishing (A)
• Mining and Quarrying (B)
• Manufacturing (C)
• Electricity, Gas, Steam, and Air Conditioning Supply (D)
• Water Supply; Sewerage, Waste Management and Remediation Activities (E)
• Construction (F)
• Wholesale and Retail Trade; Repair and Maintenance of Motor Vehicles, Motorcycles (G)
• Transportation and Storage (H)
• Accommodation and Food Service Activities (I)
• Information and Communication (J)
• Financial and Insurance Activities (K)
• Real Estate Activities (L)
• Professional, Scientific and Technical Activities (M)
• Administrative and Support Service Activities (N)
• Education (P)
• Human Health and Social Activities (Q)
• Arts, Entertainment and Recreation (R)
• Other Service Activities (S)

However, three (3) sectors of the 2009 PSIC are not covered. These are:

• Public Administration and Defense; Compulsory Social Security (O)
• Activities of Household as Employee. Undifferentiated Goods and Services Producing Activities of Household for Own Use (T)
• Activities of Extraterritorial Organizational Bodies (U)

The survey was confined to the formal sector of the economy, which consists of the following:

• Corporations and partnership
• Cooperatives and foundations
• Single proprietorship with employment of 10 and over
• Single proprietorships with branches

Hence, the 2016 ASPBI covered only the following economic units:

• All establishments with total employment (TE) of 10 and over, and;
• All establishments with TE of less than 10, except those establishments with Legal Organization = 1 (single proprietorship) and Economic Organization = 1 (single establishment), that are engaged in economic activities classified according to the 2009 PSIC.

 

Frame of Establishments

The frame for the 2016 ASPBI was extracted from the 2016 List of Establishments (LE). The estimated number of establishments “in operation” in the country in 2016 totaled to 902,213. About 294,494 establishments (32.6% of the total establishments) belong to the formal sector of which 255,403 (86.7%) comprised the establishment frame. This frame was used to draw the sample establishments for the survey.

 

Unit of Enumeration

The unit of enumeration for the 2016 ASPBI is the establishment. An establishment is defined as an economic unit under a single ownership or control which engages in one or predominantly one kind of activity at a single fixed location.

 

Classification of Establishments

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

Economic Organization refers to the organizational structure or role of the establishment in the organization. An establishment may be single establishment, branch, establishment and main office with branches elsewhere, main office only, and ancillary unit other than main office.

Legal Organization refers to the legal form of the economic entity which owns the establishment. An establishment may be single proprietorship, partnership, government corporation, stock corporation, non-stock corporation, and cooperative.

Industrial classification of an economic unit was determined by the activity from which it derives its major income or revenue. The 2009 PSIC was utilized to classify economic units according to their economic activities.

Size of an establishment is determined by its total employment (TE) as of specific date.

Geographic Classification refers to the classification by geographic area using the Philippine Standard Geographic Code (PSGC) classification. The PSGC as of December 31, 2016 was used for the 2016 ASPBI.

 

Sampling Design

The 2016 ASPBI used stratified systematic sampling with 5-digit PSIC serving as first stratification variable and employment size as the second stratification variable.

 

Estimation Procedure

  1. Non-Certainty Stratum (strata of TE 20 to 49 and TE 50 to 99)

The estimate of the total of a characteristic for the non-certainty employment strata in an industry domain in each region,

where:

s          = denotes the non-certainty employment strata in TE of 20 to 99
p          = 1, 2...18 regions (geographic domains)
xspj      = value of the jth establishment in the non-certainty employment strata in TE of 20 to 99 for an industry domain in each region
j           = 1, 2, 3…, nsp establishments
Wspj    = weight of the jth establishment in the non-certainty employment strata in TE of 20 to 99 for an industry domain in each region

Nsp    = total number of establishments in the non-certainty employment strata in TE of 20 to 99 for an industry domain in each region
nsp     = number of sample establishments in the non-certainty employment strata in TE of 20 to 99 for an industry domain in each region

  1. Certainty Stratum (TE 100 and over)

The value of the total of a characteristic (Xcp) for the certainty employment stratum in an industry domain in each region,

where:

c          = denotes the certainty employment strata of TE 100 and over
p          = 1, 2...17 regions (geographic domains)
xcpj      = value of the jth establishment in the certainty employment strata in TE 100 and over in an industry domain within each region
j           = 1, 2, 3…, mcp establishments
mcp     = number of establishments in the certainty employment strata in TE 100 and over in an industry domain within each region

  1. Total Estimate for TE of 20 and Over

The estimate of the total of a characteristic for the industry domain in each region (geographic domain) was obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,

Where dp denotes the industry domains in each region.

National level estimates of the characteristics by industry domain were obtained by aggregating separately the estimates for the particular industry domain from all the regions.

 

For Establishments with TE of Less Than 20

a. Non-Certainty Stratum

The estimate of the total of a characteristic ( ) for the non-certainty employment stratum TE less than 20 in the sth industry domain was

where:

s           = denotes the non-certainty employment strata in TE of less than 20
Xsj       = value of the jth establishment in non-certainty employment stratum in TE of less than 20 in Sth industry domain
j            = 1, 2, 3..., ns establishments
Wsj      = weight of the jth establishment in the non-certainty employment stratum of less than 20 in the sth industry domain

Ns       = total number of establishments in the non-certainty employment stratum in TE of less than 20 in the sth industry domain
ns        = number of sample establishments in the non-certainty employment stratum in TE of less than 20 in sth domain

Weight Adjustment Factor for Non-Response

To account for non-response in the non-certainty strata, the adjustment factor (n/n’) was multiplied with the sampling weight (W) of each of the sampling unit. The sampling weight, defined as N/n, was recomputed as

Thus, the adjusted weight (W’sj) for employment stratum in TE 1-9 or TE 10-19 was

where:

Ns         = total number of establishments in the employment stratum in TE 1-9 or TE 10-19 in the sth industry domain
n's         = number of responding establishments in the employment stratum in TE 1-9 or TE 10-19 in the sth industry domain

For the non-certainty employment stratum for the selected industry domain with TE 20-99, the adjusted weight (W'spj) was

where:

Nsp         = total number of establishments in the non-certainty employment stratum with TE 20-99 for the selected industry domain within each geographic domain (region)
n'sp        = number of responding establishments in the non-certainty employment stratum with TE 20-99 for the selected industry domain within each geographic domain (region)

 

Response Rate

Response rate for Construction Sector was84.2 percent(704 out of 836 establishments).This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, 29 establishments responded online.

Reports of the remaining non-reporting establishments were taken from other available administrative data sources and financial statements from Securities and Exchange Commission (SEC). However, there were establishments which were found to be duplicates, out-of-scope and out of business in 2016.

 

Limitation of Data

The survey covered only the formal sector of the economy.

 

Concepts and Definitions of Terms

Economic activity is the establishment’s source of income. If the establishment is engaged in several activities, its main economic activity is that which earns the biggest income or revenue.

Total employment is the number of persons who worked in for the establishment as of November 15, 2016.

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, receiving pure commissions only, and workers on indefinite leave.

Compensation is the sum of salaries and wages, separation/retirement/terminal pay, gratuities, and payments made by the employer in behalf of the employees such as contribution to SSS/GSIS, ECC, PhilHealth, Pag-ibig, etc.

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

Income or Revenue refers to cash received and receivables for goods/products and by-products sold and services rendered.

E-commerce refers to the selling of products or services over electronic systems such as Internet Protocol-based networks and other computer networks. Electronic Data Interchange (EDI) network, or other on-line system. Excluded are orders received from telephone, facsimile and e-mails.

Cost refers to all expenses incurred during the year whether paid or payable. Valuation is at purchaser prices including taxes and other charges, net of rebates, returns and allowances. Goods and services received by the establishment from other establishments of the same enterprise are valued as though purchased.

Expense refers to cost incurred by the establishment during the year whether paid or payable. This is treated on a consumed basis.

Intermediate expense are expenditures incurred for construction activity such as construction materials and supplies purchased, fuels, lubricants, oils and greases purchased, electricity and water purchased, and contract and commission work done by othersplus beginning inventory of construction materials, supplies,fuels, lubricants, oils and greasesless ending inventory of materials, supplies,fuels, lubricants, oils and greases.

Value added is gross output less intermediate cost. Gross output for construction sector is value of output plus income from non-industrial services done for others (except rent income from land). Intermediate cost is intermediate expense plus expense for non-industrial services done by others (except rent expense for land) and other expenses.

Value of output represents the sum of the receipts from domestic construction activities, net income earned from construction abroad, contract and commission work done for others, income from products manufactured and sold less cost of products sold, and goods sold in the same condition as purchased less the cost of goods sold; and value of tangible fixed assets produced on own account and change in inventories of finished products and work-in-progress.

Gross addition to tangible fixed assets is equal to capital expenditures less sale of fixed assets, including land.

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

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

Subsidies refer to special grants in the form of financial assistance or tax exemption or tax privilege received from the government to aid and develop an industry.