Economics of Construction

The construction industry is one of the world's biggest industries, contributing around 10% of world GDP, employing 7% of the global workforce, and consuming around 20% of the world's energy. It is highly fragmented with low profit margins and a high risk of failure. Stephen Gruneberg and Noble Francis present an up-to-date analysis of how construction markets operate, how firms collaborate on projects, and how their business models work. They explore the many distinctive features of the economics of the industry, such as the use of cost-reduction rather than profit-maximizing behavior, the processes of tendering and procurement, and the often cyclical nature of demand. The book offers authoritative analysis and expert insight into the economics of a much misunderstood industry and is suitable for courses in business schools and departments of architecture and the built environment.

Format: Hardback
Length: 208 pages
Publication date: 14 December 2018
Publisher: Agenda Publishing

The construction industry is one of the largest and most influential sectors in the global economy, contributing around 10% of global GDP, employing 7% of the global workforce, and consuming around 20% of the world's energy. It encompasses a wide range of activities, including the development of housing, commercial properties, and infrastructure projects such as roads, bridges, tunnels, railways, airports, and more. Despite its significant impact, the construction industry is characterized by high fragmentation, low profit margins, and a high risk of failure for many firms operating in its complex supply chain.

In their book, "Construction Markets: An Up-to-Date Analysis of How Firms Collaborate on Projects and How Their Business Models Work," Stephen Gruneberg and Noble Francis provide an in-depth exploration of the economics of the construction industry. The authors examine the various factors that shape the industry, including the use of cost-reduction rather than profit-maximizing behavior, the processes of tendering and procurement, and the often cyclical nature of demand. They also address the particular challenges faced by the industry, such as the frequency of disputes between firms and the low productivity of the sector.

One of the key findings of the book is that the business model adopted by the construction industry tends to prioritize the volatility of demand and risk management over efficiency improvement. This focus on short-term profits and risk avoidance can lead to disputes, delays, and cost overruns, ultimately affecting the quality of the projects and the satisfaction of stakeholders. The authors argue that a shift towards a more sustainable and efficient business model is necessary to address these challenges and ensure the long-term viability of the industry.

The book offers authoritative analysis and expert insight into the economics of a much misunderstood industry, making it suitable for a range of courses in business schools and departments of architecture and the built environment. It provides students and professionals with a comprehensive understanding of the factors that drive the construction industry, the challenges it faces, and the opportunities it presents. By exploring the economics of construction, the book helps to inform policy decisions, promote sustainable practices, and improve the overall efficiency and productivity of the industry.

In conclusion, the construction industry is a vital and complex sector that plays a critical role in shaping the world around us. While it contributes significantly to the global economy, it faces numerous challenges that require innovative solutions and a shift towards a more sustainable and efficient business model. "Construction Markets: An Up-to-Date Analysis of How Firms Collaborate on Projects and How Their Business Models Work" by Stephen Gruneberg and Noble Francis provides valuable insights into the economics of the construction industry and offers a roadmap for addressing its challenges and promoting its growth.

Weight: 384g
Dimension: 154 x 216 x 22 (mm)
ISBN-13: 9781788210140