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The construction of housing, commercial property and infrastructure projects – roads, bridges, tunnels, railways, airports – for both the private and public sectors is one of the biggest industries in the world. It contributes around 10 per cent of world GDP, employs 7 per cent of the global workforce, and consumes around 20 per cent of the world’s energy. It is also a highly fragmented industry with very low profit margins and a high risk of failure for the many firms operating in its complex supply chain. 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 behaviour, the processes of tendering and procurement, and the often cyclical nature of demand. Particular challenges for the industry, such as the frequency of disputes between firms and the low productivity of the sector, are shown to be the outcomes of a business model that tends to focus on the volatility of demand and managing risk at the expense of improving efficiency. As well as discussing industry-wide issues, the authors also examine how individual projects are costed. The book offers authoritative analysis and expert insight into the economics of a much misunderstood industry and is suitable for a range of courses in business schools and departments of architecture and the built environment.
Acerca de Stephen Gruneberg
Stephen Gruneberg is an industrial economist specialising in the construction and property sectors, and an Honorary Professor in the Bartlett School of Construction and Project Management, University College London. He has written several books on the economics of the construction sector, most recently Programme Procurement: Lessons from London 2012 (with John Mead).
Acerca de Noble Francis
Noble Francis is Economics Director at the Construction Products Association, London. He oversees a team of construction economists and has over 15 years experience producing economic forecasts for the construction industry. He is also an Honorary Professor in the Bartlett School of Construction and Project Management, University College London.
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