Market driversDemandDemand for construction and civil engineering work can be divided
in broad terms into public and private sectors. Public sector work is
work for any public authority such as:• Government departments• Public utilities• Universities• The National Health Service, and• Local authorities.
Private sector work is for a private owner or organisation or for a
private client and includes:
• Work carried out by fi rms on their own initiative
• Work where the private sector carries out the majority of the risk/
gain.
Increasingly, the distance between public and private sectors is
disappearing with the introduction of strategies such as the Private
Finance Initiative, which is included in Chapter 4.
Demand for construction is infl uenced by the following factors:
• The industry is vulnerable to economic infl uences as witnessed
by the downturn in the UK housing sector in 2008. Figure 1.1
illustrates that the last 40 years have seen a number of periods of
‘ boom and bust’ associated with the economic performance of the
UK as a whole. The construction industry has regularly been used
by government in the recent past as a method of regulating the
general economy; for example, by varying interest rates in order
to adjust demand for housing
• Almost half of all construction works are commissioned by the
public sector and therefore cut-backs in public sector spending on
projects such as schools, hospitals, roads, etc., can have the effect
of cooling down an overheating economy.
• Demand can come from a variety of sources, from mega projects,
such as the 2012 London Olympic Games to a single-storey kitchen extension
• A buoyant construction market depends on the availability of
reasonable cost credit
The quantity surveyor and the construction industry 3
• Further ways in which the government can manipulate demand
are with the use of tax breaks for certain categories of development, e.g. Enterprise zones were established in various parts of the
country in 1982. These zones offer certain types of development;
lucrative tax breaks, rapid planning approvals and exemption
from business rates
• Nearly half the output of the construction industry is in repairs and
maintenance, often neglected in times of economic down-turns.
in broad terms into public and private sectors. Public sector work is
work for any public authority such as:• Government departments• Public utilities• Universities• The National Health Service, and• Local authorities.
Private sector work is for a private owner or organisation or for a
private client and includes:
• Work carried out by fi rms on their own initiative
• Work where the private sector carries out the majority of the risk/
gain.
Increasingly, the distance between public and private sectors is
disappearing with the introduction of strategies such as the Private
Finance Initiative, which is included in Chapter 4.
Demand for construction is infl uenced by the following factors:
• The industry is vulnerable to economic infl uences as witnessed
by the downturn in the UK housing sector in 2008. Figure 1.1
illustrates that the last 40 years have seen a number of periods of
‘ boom and bust’ associated with the economic performance of the
UK as a whole. The construction industry has regularly been used
by government in the recent past as a method of regulating the
general economy; for example, by varying interest rates in order
to adjust demand for housing
• Almost half of all construction works are commissioned by the
public sector and therefore cut-backs in public sector spending on
projects such as schools, hospitals, roads, etc., can have the effect
of cooling down an overheating economy.
• Demand can come from a variety of sources, from mega projects,
such as the 2012 London Olympic Games to a single-storey kitchen extension
• A buoyant construction market depends on the availability of
reasonable cost credit
The quantity surveyor and the construction industry 3
• Further ways in which the government can manipulate demand
are with the use of tax breaks for certain categories of development, e.g. Enterprise zones were established in various parts of the
country in 1982. These zones offer certain types of development;
lucrative tax breaks, rapid planning approvals and exemption
from business rates
• Nearly half the output of the construction industry is in repairs and
maintenance, often neglected in times of economic down-turns.
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