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Definition
Construction
(NAICS 23)
The industries on this site are classified according to the North
American Industry Classification System (NAICS) of 2002. Statistics
Canada maintains this standard classification which has superseded the 1980
Standard Industrial Classification (SIC) previously used.
This section outlines NAICS Canada 2002 with respect to the
Construction sector.
It defines the activities specifically excluded, as well as its position in the
NAICS hierarchy.
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This sector comprises establishments primarily engaged in constructing, repairing and renovating buildings and engineering works, and in subdividing and developing land.
- These establishments may operate on their own account or under contract to other establishments. They may produce complete projects or just parts of projects.
- Establishments often subcontract some or all of the work involved in a project.
- Establishments may produce new construction, or undertake repairs and renovations to existing structures.
A construction establishment may be the only establishment of an enterprise, or one of several establishments of an integrated real estate enterprise engaged in the land assembly, development, financing, building and sale of large projects.
There are substantial differences in the types of equipment, work force skills, and other inputs required by establishments in this sector. To highlight these differences and variations in the underlying production functions, this sector is divided into three subsectors. Establishments are distinguished initially between those that undertake projects that require several different construction activities (known as trades)
to be performed, and establishments that specialize in one trade.
The former are classified in subsectors NAICS 236, Construction of Buildings and NAICS 237, Heavy and Civil Engineering Construction, depending upon whether they are primarily engaged in the construction of buildings or in heavy construction and civil engineering projects. Establishments in these subsectors complete projects using their own labour force, by subcontracting, usually to trade contractors, or a combination of own account and subcontracting activities.
Establishments classified in these subsectors are known by a variety of designations, such as general contractor, design-builder, speculative builder, operative builder and construction manager. The designation depends on the scope of the projects they undertake, the degree of responsibility and risk that they assume, the type of structure that they produce, and whether they work on contract for an owner or on their own
account.
- General contractors typically work under contract to a client (the owner of the land and the building or structure to be constructed), and undertake projects that require several specialized construction activities to be performed. Often the general contractor
will subcontract some of the specialized tasks to other establishments.
- Design-builders are similar to general contractors. However, in a design-build project a single contract is signed with the owner that makes the contractor responsible
for providing the architectural and engineering designs. The design-builder therefore is responsible for the design of the project as well as its construction.
- Construction establishments that build on their own account, for sale to others, are known
as speculative builders, operative builders or merchant builders. They are most often engaged in the construction of residential buildings.
- Construction managers provide oversight and scheduling services to the owner,
for the most part during the actual construction process. This type of service is sometimes referred to as agency construction management, to distinguish it from a type of general contracting known as at-risk construction management. On the other hand, project management, which is a turnkey-type service involving the entire project, including feasibility studies, the arranging of financing, and the management of the contract bidding and selection process, is classified in NAICS 54133, Engineering Services when
it is the primary activity of an establishment.
Establishments that specialize in one particular construction activity, or trade, are generally classified in subsector NAICS 238, Specialty Trade Contractors. However, in order to conform to the generally accepted distinctions made by construction businesses
themselves, some types of specialized establishments involved in road building and civil engineering are classified in subsector NAICS 237, Heavy and Civil Engineering Construction.
Subsector NAICS 238, Specialty Trade Contractors, comprises establishments engaged in trade activities generally needed in the construction of buildings and structures, such as masonry, painting, or electrical work. Specialty trade contractors usually work under contract to another construction establishment but, especially in renovation and repair construction, they may contract directly with the owner of the property.
A significant amount of construction work is performed by enterprises that are primarily engaged in some business other than construction, for these enterprises' own use, using employees and equipment of the enterprise. This activity is not included in the construction sector unless the construction work performed is the primary activity of a separate establishment of the enterprise. However, if separate establishments do exist, they are classified in the construction sector
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Establishments primarily engaged in the following activities are excluded:
- manufacturing and installing building equipment, such as power boilers; manufacturing
pre-fabricated buildings (NAICS 31-33, Manufacturing);
- operating highways, streets and bridges (NAICS 48-49, Transportation and Warehousing)
;
- project management, when it is a primary activity (NAICS 56, Administrative and Support, Waste Management and
Remediation Services).
- house-moving (transportation only) (NAICS 48-49, Transportation and Warehousing)
;
-
maintenance of rights of way for power, communication and pipe lines; and cleaning building
exteriors, after construction
(NAICS 56, Administrative and Support, Waste Management and Remediation Services.
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Position in NAICS Hierarchy |
Canada's Construction (NAICS 23) sector is comprised of the following subsectors :
- Construction of Buildings (NAICS 236)
- Heavy and Civil Engineering Construction (NAICS 237)
- Specialty Trade Contractors (NAICS 238)
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