building economics lecture notes
DESCRIPTION
Construction Industry & the EconomyTRANSCRIPT
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ABA 2307
B. Arch 3rd Year 2015
BUILDING ECONOMICS
Lecture 2
1
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Outline
Course Overview
Course Outline
Semester Plan
CATs & Assignments
2
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Building Economics
Construction Industry & the economy 1
Determinants of demand & supply
3
Cost in use/Life cycle costs 4
Estimating methods 5
Measurements & role of a QS 6
3
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Construction Industry & the Economy
Today's lecture plan, we will look at
Introductions
Role of the construction industry
Industry & the economy
Relationships & processes
Complexity of the construction industry
4
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Introduction
The construction industry is the sector
involved with erection, repair and
demolition of buildings and civil engineering
structures in an economy
Construction industry & the property
industry are intertwined
5
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Introduction cont
The construction industry handles the
constructed-facility production process while
the property industry handles the
constructed-facility output.
Demand for constructed facilities is satisfied
either through the purchase or lease of a
building from the existing stock
6
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Introduction cont
The function of the construction industry is
therefore to serve the portion of total
demand for constructed space in the
economy that cannot be served from the
existing stock of constructed space.
7
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Role of construction industry
It provides constructed physical facilities
which provide space where other activities
may take place
The monetary value of all the buildings & civil
engineering works produced by the industry in
a given period of time, normally 1yr is referred
to as the gross output of the constr. industry
8
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Construction industry & the Economy
The construction industry affects & is
affected by the economy
The interrelationships between the industry
& the economy stem from three distinct
characteristics of the industry:
Size;
investment goods;
Government is a client for a large part of its work
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Construction industry & the Economy
Size is important because changes in output
of the construction industry have a significant
effect on the size of the national product
both directly and indirectly.
If the output of the industry is down, total
investment is down, and the investment is of vital
concern to the health of the nation.
10
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Construction industry & the Economy
It provides an investment good means that it is
subject to fluctuations in demand, for most of
its products will be required only if certain
other factors are favorable, e.g-
the expected sales of goods, which a factory would produce
the availability of mortgages for house purchase
the economic climate in which government takes decisions about the level of social services
11
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Construction industry & the Economy
The dependence on government as a client
means that government is able to influence
the demands on the industry by: -
action on its own proposed projects
control of credit and interest rates
12
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Construction industry & the Economy
There are 4 main aspects of economic life in
which the construction industry affects & is
affected by the economy
in demand and output
in employment and incomes
in balance of payments
in the level of prices.
13
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Complexity of the construction industry
It may be assumed to consist of sub sectors,
each sub-sector consisting of numerous
projects, and each project involving different
stages of activities from project conception
to completion.
The basic process conception to completion
is regarded as the INPUT-OUTPUT.
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Complexity of the construction industry
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Complexity of the construction industry
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Questions?
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