Trends affecting NACE 7212

Classification of the built environment economic activities

Trends

Available are:

Eurostat's NACE classification of economic activities is being undertaken at a time when the consulting engineering is facing a rapidly growing demand for its services but also considerable dispruption in some areas of activity.

The trends impacting the industry, especially the way its activities classified, are summarised below to provide some background to the EFCA's proposal to Eurostat.

Since the industry works with and across many sectors of economic activity, notably construction, manufacturing and to some extent agriculture and mining, these notes focus on the principle activities, namely those involving the built environment, especially in relation to infrastructure whether it be grey, green, blue or digital.

See also background to the revision, summary of national versions and a preliminary analysis.

Sector definitions

There is a need for more and better information on the development, operation and renovation of cities and the built environment. All else equal, better data means better policies and greater understanding of the issues.

The proposed revision of Eurostat's NACE classification of economic activities is being undertaken at a time when the construction industry is increasingly seen as being embedded in the built environment value chain.

The cumulative contribution of the various industries that comprise the built environment sector can be measured by aligning economic activity classifications accross the built environment sector .

The various scopes of the classifications defining the construction sector summarised below illustrate the evolution from a 'narrow' purely construction definition to a 'broad', 'big' or 'wide' value-chain built environment definition within which NACE 71.12 (engineering activities and related technical consultancy) forms an essential component.

NACE 7112 is seen as an enabler.

The challenge is to ensure that the revision to the NACE classification consolidates and enhances built environment perspective.

  • 'Narrow'

    • SIC (UK) based: on-site activities of contractors and sub-contractors
      • specialised activities becoming more important
      • included as other work in UK construction prices indices
      • SIC41.2 ¦ SIC42 - Civil engineering ¦ SIC43 - Specialised construction activities ¦ shares in 2015
        • Housing new build 50¦13¦37
        • Infrastructure new build 13¦63¦24
        • Other new build: 29¦15¦58
    • NACE Rev. 2 categories (see Annex A)
  • 'Broad/Supply chain': see for the various 'broad' definitions, with an example of value added for Australia showing close to double the output compared to that for a narrow definition .

    • contractors and sub-contractors
    • specialised contrators
    • equipment suppliers
    • consultants (surveying, design, engineering, cost planning, project management services)
    • professional services (urban planning, transport, finance and legal services)
    • suppliers of materials, machinery and equipment, products, assemblies, modules, and components
    • manufacturers and distributors
      • contractors’ purchases of materials
  • 'Big': excludes the distribution and sales of construction products (see SIC codes in annex ) )

    • contracting:
      • construction of buildings, e.g. commercial, residential
      • civil engineering, e.g. roads, tunnels, bridges, utilities
      • specialised construction activities e.g. electrical and plumbing installation, demolition and site preparation, plastering, painting, roofing etc.
    • product manufacturing, e.g. cement, bricks, glass, plumbing, heating equipment, electrical fittings, metal structures, doors and windows of metal, carpentry
      and joinery etc.
    • professional services, e.g. architecture, quantity surveying, civil and structural engineering, wholesale of wood, construction & materials, wholesale of hardware, plumbing & heating equipment, renting & leasing of construction equipment, etc.
  • 'Wide/Value chain'

    • NACE Rev. 2 categories (see Annex)
    • NACE Rev. 1 categories
      • Core activities: 45
      • Pre-production (input) activities & services: 14.11; 17.54; 20.20; 20.3; 24.30; 25.23; 26.14; 25.25, 26.30; 26.4; 26.51; 26.52; 26.53; 26.6; 26.7; 28.11; 28.12; 28.22; 29.52; 28.72; 36.63; 74.2
      • Post-production activities & services: 70.11; 70.2; 70.3
      • Support activities & services: 37.20; 45.31; 51.53; 51.54; 71.32; 74.2

Note: the classification of value chains into components based on a series of functions or a series on life-cycle stages is used to estimate maritime economic activities such as offshore wind farms

  • 'Built environment'
    • value-chain employment opportunities

      • design, construction and management of man-made structures
        • architects, architectural technologists and interior designers
        • civil and structural engineering
        • construction and building services professionals and facilities managers
        • surveyors, planners and housing officers
        • engineers (agricultural, building services, civil, cost, design, fire, gas and oils, highway, marine engineers , mechanical engineers, operations or industrial engineers, sound and communications, structural)
    • value chain activities (preproduction activities & services; core production; postproduction activities & services)

Infrastructure

Mirroring today's value chain perspective to construction as a built environment activity, the design, delivery and operation of infrastructure is increasing seen as requiring a whole-life value-chain focus that has several trends.

  • Smarter procurement

    • shared enterprise delivery model (manage combined resources)
      • focus on supply-chain relationships instead of project-based transactional relationships
      • primary interface is between the client/asset owner/operator and the supply chain faclitated by an integrator
      • supply chain comprises investors, construction clients, contractors, firms in the construction and products supply chain and professional advisors so the enterprise participant types are are: owner, investor, advisor, supplier and integrator
      • existing contractual arrangements for design, construction and specialist roles can be amended to work with the integrator
  • Project benchmarking

    • benchmarks to support selection, budgeting and design
  • Whole-life performance at the system - network - asset - project levels

  • ** Smarter infrastructure **

    • more productive delivery
    • smarter operation
  • Alignment and integration - system - network - asset - project

    • projects and programmes planned in an integrated way, looking across sectors to support priority economic, social and environmental objectives
  • Digital infrastructure

  • Green /nature-based infrastructure

  • Blue economy

    • oceans have an enormous economic potential onvolving activities that (i) take place in the marine environment or that (ii) use sea resources as an input, as well as economic activities that (iii) are involved in the production of goods or the provision of services that will directly contribute to activities that take place in the marine environment.
    • current accounting classifies only 5% of EU28 turnover to matitime activities
  • Digital techniques

  • Offsite manufacturing


Annex A: 'Narrow' construction industry: NACE Rev. 2 codes##

  • NACE Rev. 2 based
    • 41 Construction of buildings
      • 41.1 Development of building projects
      • 41.2 Construction of residential and nonresidential buildings
    • 42 Civil engineering
      • 42.1 Construction of roads and railways
      • 42.2 Construction of utility projects
      • 42.9 Construction of other civil engineering projects
  • 43 Specialised construction activities
    • 43.1 Demolition and site preparation
    • 43.2 Electrical, plumbing and other construction installation activities
    • 43.3 Building completion and finishing
    • 43.9 Other specialised construction activities

Annex B: 'Wide' construction industry: NACE Rev. 2 codes

8.11 Quarrying of ornamental and building stone, limestone, gypsum, chalk and slate
9.9 Support activities for other mining and quarrying
13.96 Manufacture of other technical and industrial textiles
16.21 Manufacture of veneer sheets and wood-based panels
24.3 Manufacture of paints, varnishes and similar coatings, printing ink and mastics
16.22 Manufacture of assembled parquet floor
16.23 Manufacture of other builders’ carpentry and joinery
20.3 Manufacture of paints, varnishes and similar coatings, printing ink and mastics
26.26 Manufacture of refractory ceramic products
22.23 Manufacture of builders’ ware of plastic
23.14 Manufacture of glass fibres
23.2 Manufacture of refractory products
23.32 Manufacture of bricks, tiles and construction products, in baked clay
23.51 Manufacture of cement
23.52 Manufacture of lime and plaster
26.7 Cutting, shaping and finishing of ornamental and building stone
23.6 Manufacture of articles of concrete, cement and plaster
23.7 Cutting, shaping and finishing of stone
25.11 Manufacture of metal structures and parts of structures
25.12 Manufacture of doors and windows of metal
25.21 Manufacture of central heating radiators and boilers
27.52 Manufacture of non-electric domestic appliances
28.21 Manufacture of ovens, furnaces and furnace burners
37.2 Recycling of non-metal waste and scrap
28.92 Manufacture of machinery for mining, quarrying and construction
28.99 Manufacture of other specialpurpose machinery n.e.c.
45.2 Building of complete construction or parts thereof; civil engineering
38.32 Recovery of sorted materials
41.1 Development of building projects
41.2 Construction of residential and nonresidential buildings
45.5 Renting of construction or demolition equipment with operator
42.1 Construction of roads and railways
42.2 Construction of utility projects
42.9 Construction of other civil
engineering projects
70.11 Development and selling of real estate
43.1 Demolition and site preparation
70.2 Letting of own property
43.2 Electrical, plumbing and other construction installation activities
70.3 Real estate activities on a fee or contract basis
43.3 Building completion and finishing
74.2 Architectural and engineering activities and related technical consultancy
43.32 Joinery installation
43.9 Other specialised construction activities
46.73 Wholesale of wood, construction materials and sanitary equipment
46.74 Wholesale of hardware, plumbing and heating equipment and supplies
68.2 Renting and operating of own or leased real estate
68.31 Real estate agencies
71 Architectural and engineering activities; technical testing and analysis
77.32 Renting and leasing of construction and civil engineering machinery and equipment
77.39 Renting and leasing of other machinery, equipment and tangible goods n.e.c.
80.2 Security systems service activities
81.1 Combined facilities support activities