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Construction Economics - Assignment Example
The construction industry is among the most essential industry in the global economy. The nature of the industry deals in both goods and services. It deals with goods such as apartments, houses, factories, schools, offices, roads and the building of other structures. …
The industry provides services such as maintenance, repairs and rehabilitation of existing structures.
The industry comprises of three main sectors, which include building construction, heavy and civil engineering and specialty trade contractors. The building and construction sector includes contractors who build buildings for residential, industrial and commercial purposes. Heavy and civil contractors build roads, bridges, sewers and other major projects mostly relate to state infrastructure. Specialty deals with carpentry, painting and other works that relate to all types of construction.
The industry teds to enter recessions first and often the last to recover. Most economic factors, which lead to recession, affect the construction industry. Inflation is one of the major causes of recession where consumer goods become expensive resulting to a drop in customer spending. In instances when the economy is expanding, there is increased consumer spending due to better wages and high disposable income.
During the economic boom individuals have disposable income, which they use to buy durable goods and assets such as apartments and homes (Samuelson & Nordhaus, 2004 p. 56). In addition, the state acquires more tax revenue, which it utilizes by developing infrastructure. All three sectors of the construction industry indicate tremendous growth during this period. ...