Importance Of Construction In The National Economy Construction Essay

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This report is about a review of the National Statistics. The aim of this report is to indicate the specific importance of construction in the national economy; and to choose and analyse a table from the 2009 annual construction statistics (Published by the Department of Business, Enterprise and Regulatory Reform.) in order to point out the effect that a major building project such as the 2012 Olympic programme would have to the table.

Main Body

The National Statistics is the national standard set for statistics; it brings together a wide range of different statistics from the construction industry. It brings about a broad statistical fact of the importance of the construction industry in the economy through the last decade; it provides analytical understanding, features and comparison on current initiatives that may change or influence the future. The list of data that can be found in the statistics includes; cost, prices, labour, etc. All these are interlocked with inflation, revenue, employment, market demand, etc.

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The East of England and Greater London on the national statistics table are the ones I will be comparing and reviewing; in order to get the supply and demand of both counties' difference in percentages and ratios.

There are many factors that affected the fluctuating figures on the table, and these could be things like inflation, recession, price hike, materials, etc. In comparison between new housing (public and private) in East of England 1998, public was £81m while private was 756; this is about 2% public and a 14% private new houses that were constructed (a ratio of 1:7). This means that the major part of the construction of a new house is built and for private use because it creates an opportunity for new and first time buyers to participate and invest in houses; and this fall under demand, it will in turn create employment and provide jobs for both professionals and labourers.

Also, it is cheaper to construct new houses because the cost of maintenance can be very expensive, and the building might have depreciated in value due to factors like age, location, design, materials used. But constructing a new building bring about change and regeneration to the community, it creates environmental friendly atmosphere as most modern materials are eco-friendly and affordable. It provides investment opportunities and increase in revenue.

The demand for more houses have been high in recent years due to the migrant increase (European Union), so more house were built privately in order to accommodate the massive increase in the UK population. As the demand for more houses soar, many projects were awarded and this brought about competition in the construction industry. Firms started to tender their prices, structural design and the need to be environmentally cautious and cost effective, construction of structures that would create revenue for the economy to improve, it created a market for materials and professionals in the field; which brought about competition on material cost, availability of professionals to carry out the task. These aspects of supply and demand increased as the years went by; until the recession kicked in. Similar kinds of figures emerge when the percentage of increase is calculated in both the greater London construction statistics.

East of England

YEAR

New Housing

Public%

New Housing

Private%

Infrastructure

Public

Industrial

Commercial

Total Amount

1998

2%

14%

8%

7%

5%

12%

5423

1999

1%

13%

7%

7%

5%

14%

5825

2000

2%

14%

10%

7%

7%

14%

6427

2001

2%

13%

10%

6%

7%

14%

7379

2002

2%

14%

9%

7%

5%

18%

8246

2003

3%

14%

6%

9%

4%

17%

8972

2004

3%

16%

5%

10%

4%

14%

9705

2005

3%

16%

6%

9%

4%

14%

10950

2006

4%

16%

5%

7%

5%

15%

11393

2007

4%

14%

5%

7%

5%

14%

12146

2008

4%

12%

5%

9%

3%

13%

11931

Greater London

YEAR

New Housing

Public%

New Housing

Private%

Infrastructure

Public

Industrial

Commercial

Total Amount

1998

2%

8%

12%

8%

2%

29%

8954

1999

2%

8%

10%

9%

2%

31%

9675

2000

2%

7%

9%

8%

2%

30%

10260

2001

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3%

6%

13%

7%

3%

30%

12116

2002

3%

8%

11%

9%

2%

31%

13529

2003

3%

9%

9%

10%

2%

24%

13911

2004

5%

7%

6%

10%

1%

27%

14356

2005

5%

8%

7%

9%

1%

28%

14343

2006

6%

9%

7%

8%

2%

28%

16426

2007

6%

8%

7%

9%

2%

29%

18551

2008

5%

8%

7%

12%

1%

28%

19861

Looking at the above table it is quite clear that more money was spent on commercial building and private new houses, the rate at which structures were erected were at a steady pace and then increased gradually due to a rise on the new and first time buyers and the increase in the amount of professional and migrant workers. The table shows that due to the recession, the number of new structures decreased and more money was still spent on all works and it was mainly in repair and maintenance of the existing structures; these led to dramatic job losses, cut in wages, bank stopped lending as many people couldn't keep up with their mortgage rent, business short down, etc.

The 2012 Olympic would have a huge impact on the UK economic, as it will boost tourism, new structures would be built, due to new contracts and projects; firms would offer apprenticeship, the growth on repair and maintenance will increase (businesses will refurbish and introduce new ideas to attract people and this will boost sales).

After the Olympic, the awareness and publicity would enable foreign investment to continue to flourish, and the structures would have innovative new look.

Conclusion

This report was about a review of the construction national statistics and was aimed at analysing and justifying the fluctuation on the amount spent on new housing, repair and maintenance. This was as a result of an increase in the national population and the need for new and innovative structures.

References:

Hillebrandt, P. M., (2000). Economic Theory and the Construction Industry. 3rd ed. Great Britain: Macmillan Press LTD.

Eccles, T., Sayce, S., and Smith, J., (1999). Property and Construction Economics. London: International Thomson Business Press.