Energy productivity and total-factor productivity in the Australian construction industry

There is urgent need to consider energy consumption when measuring total-factor productivity in the construction industry. This paper adopts the Malmquist index method to investigate the factors affecting the energy productivity of the Australian construction industry and compares them with those decomposed from the total-factor productivity. An input-oriented distance function and a contemporaneous benchmark technology are employed to develop the data envelopment analysis models. The Malmquist productivity index is decomposed into the technological change, pure technical efficiency change and activity effect to gain comprehensive insights into changes of construction productivity in the Australian states and territories over the past two decades. Research results show that both energy productivity and total-factor productivity improved in Australia, particularly related to technological development. The pure technical efficiency and activity indices changed slightly over time or across regions. This study demonstrates that there exists a linkage between energy productivity and total-factor productivity through their technological and technical efficiency changes. The Australian construction industry could enhance these two productivities by introducing advanced technologies and implementing them efficiently.