The construction industry as viewed from the International perspective has grown so huge that the energy (fuel and electricity) consumed by this Industrial sector amounts to around twenty percent of the total energy consumption of the world. All other resources utilized by construction Is a staggering fifty percent of the total resource output of the entire world. Historically, the construction Industry has been the base of the global economy as an offshoot of a well-established agricultural economy of the ancients.
This is evident from the Pyramids of Gaza, the Forbidden Temple in Beijing, the Hanging Gardens of Babylon, the Angora Watt, the mountain top cities of Peru, Mexico and Bolivia, and all the roads that lead to Rome. From this perspective, it lead to the establishment of new world centers of development due to the coming of the industrial age, creating new economic superpowers in Europe and eventually spilling-over to the new world, central Asia and the middle east.
Although in these periods, international development due to the construction industry has not been fully realized, until near the end of the 20th century where territorial mandarins were transcended by trade due to the opening up of world markets to the International community. In the past, the construction Industry has Limited Itself to terrestrial applications, Including not only above-ground, but subterranean structures as well, that are presently composed of, but are not limited to, several major sectors namely, residential, commercial, heavy civil works, industrial and environmental.
Further progress have made it possible that the Industry concerns itself also with amphibious and off-shore applications, and now, more than ever, has renascence the limits of gravity (which is for that matter the very basis of most engineering and architectural pursuits), to extra-terrestrial purposes. Satellites, space stations and as predicted, within this century, a full-scale construction endeavor for the Mars mission, are now, to a great extent, the endeavor of the Industry.
As such, the International construction Industry has come up as a basis for determining not only the economic performance of a particular country but the global economy as a whole. The international macroeconomic environment and consumer trends impacts the construction industry and vice versa. This is true since transformed itself to a heterogeneous one on partnership with other industries like real estate, commerce, mining and manufacturing while maintaining its core business in infrastructure.
It is expected that over the next decade, the international construction industry will grow by leaps and bounds especially in emerging economies of Asia, Middle East, Latin America, Africa and Eastern Europe. This expectation comes from globalization, arbitration and the burgeoning of new centers of development. The construction output from these fast growing markets is expected to double within this decade and will emerge as a $6. 7 trillion business by 2020.
The world economy and the domestic economies from where local and international players in the construction industry operates have always been a determinant of the growth, scope and extent of the industry as a whole. While construction projects had stalled during the economic slump from 2007 to 2009, this did not have a general effect on the international construction industry as a whole. During this downturn period, the deleterious economic impact had been upset by the rapid growth of the emerging economies, pulling away from their developed underpants.
While most developed countries in North America and Europe try to manage the effects of the crisis in bailing out most financial institutions to avert the escalation of the crisis, most emerging economies in South America, Africa, Asia and Middle East, induced stimulus programs directed mostly at the construction sector to boost the economy. In Brazil, the upsurge in population required their government to allocate much of their resources to housing and energy. Indian’s focus on urban renewal, transport development and energy made it the third largest construction arrest in the world during the same period.
The role of the construction industry in the performance of emerging economies as against the developed ones became more apparent during the economic crunch of the last decade and the recovery period thereafter. During the years leading to the crisis, most developing countries have been channeling resources to high-value, low-risk and long-term infrastructure projects. Most of these projects were spearheaded by government funding, either a direct investment from their GNP, foreign economic stimuli packages, BOOT’S or even Public-Private Initiatives.
This was the time where most emerging economies consider that the central challenge for development was to meet demands for increased capacity through continued construction, or physical expansion of infrastructure systems. As opposed to this, in most developed countries, the pre-eminence of vast inventory of “legacy infrastructure”, and the high cost of redeveloping and expanding these systems to high density urban locations, has shifted investment opportunities to modernization and improvement of capacity and efficiency of these legacy systems.
While these are also investments, the value of such investments pales in imprison to new construction and development. Countries like China, Chile and India, to name a few, have been successful in the creation of infrastructure projects at the long term. These emerging economies all have an overarching vision of how their countries fit into the global stage, and of the critical set of specific and priority project requirements to achieve that vision. As a result, investment levels, from any sources identified earlier, are much higher than their former levels.
This resulted in a robust construction industry for these economies and furthermore, produced an deed for construction of infrastructure projects was driven during the last three decades by pressures of massive arbitration, industrialization programs and generally by globalization. Although to some development economists, the relationship between infrastructure (construction) development and economics is not very clear, the Chinese government, as a matter of policy, never doubted the “push and pull” effect of infrastructure development to other economic sectors.
This is evidently reflected in a well received Chinese slogan “Build a road first if you want to get rich”. The United States and Canada on the other hand failed to heed the silent whisper in Kevin Cotter’s Field of Dreams, “Build it Here and They Will Come”. The U. S. Is a perfect example of a developed country with a large inventory of aging infrastructure. Modernization of these facilities have been a nightmare for infrastructure policy makers and providers (U. S. Engineering and construction Industry).
To meet the daunting task of upgrading these stock, the infrastructure community must take a fresh perspective on both the demand and supply side of infrastructure markets. The ultimate solutions unique to these developed countries will likely be drawn-out from a combination of demand side and supply side strategies. The nature of these solutions requires a shift in focus from the creation of new infrastructure towards a renewed vitality and an expansion of capacity of these facilities.
GAP of the Republic of the Philippines Just like any emerging economies, the Philippines was heavily influenced by the economic downturn of the last three years of the last decade. During that period, the country has at least avoided a negative economic growth but had a dismal 1 . % GAP growth in 2009. During the recovery period, the Philippine economy accelerated at a robust pace, generating a GAP of 7. 6% – a record in itself as the highest in the Post- Marco’s era. On the other hand, the local construction industry, steadily increased its contribution to the nation’s GAP within the same period of slump.
On a five-year period from 2006 to 2010, the construction industry pumped an equivalent of five percent of the nation’s GAP. The Philippine Construction industry outpaced the National GAP growth during the same period, posting a 10. 5% growth, as against the Gaps 4. %, and rebounded in 2010 at a rate of 14. 3%. Subsequently, at the start of this decade, as more investments, both local and foreign, were injected in the economy, the construction industry also increased its output. The contribution of the construction industry in the Philippines emphasizes its primary role in the nation’s economy.
This contribution came largely from private construction mainly sourced from the establishment of higher residential and commercial building construction, while the public projects contribution came mainly from infrastructure developments issued by the government. The pattern of growth and the overall effect and role of the Philippine Construction Industry on the local and international economy is evidently congruent and compatible to those of most emerging economies like India, Brazil and China (albeit on a lesser scale).
As a developing country itself, the Philippines had mirror-imaged these patterns and consequently produced equivalent construction-related issues with these countries Discrepancies may only lie in the socio-political differences between these countries, but from a definitive economic point of view, the differences may be overlooked. International Construction Trends and Its Importance to Construction Managers (Answers to Question #2) Trend as a matter of definition is “the general direction in which something tends to move”, “a general tendency or inclination” or simply “current style” or “vogue”.
It must be greatly differentiated from the ubiquitous notion of fad which is a lot of layers beneath the meaning of trend. Construction Industry wise, fads may assume the figure of a high-tech laser measuring equipment replacing the tape measure, a new construction design modeling software, or a new project management tracking tool, which in all cases, due to the rapidity of velveteen in high technology, would in the very near future be Just a foolhardy investment for any construction manager or company for that matter.
Trends on the other hand are enduring and lead towards better ways of implementing measures in construction. This is the objective of this endeavor. Trends in the construction industry that a construction manager should be aware of, pertain to the general direction as to where emerging business opportunities may be directed. These are a few of Construction Industry Trends that most, if not all construction managers and genuineness must understand that will help them in making informed decisions.
The Changing Nature of Business in the International Construction Industry The nature of the construction industry is rapidly evolving. Successful construction managers and businessmen in the future should be dynamic innovators in all aspects of their business and should: Become more strategic Enhance customer collaboration Develop Information Technology as a profit center Establish specialization on strategic core business or “niches” Innovate and personally handle more work Confront change, accept and manage risks Become productivity experts
Be environmentally sound The Federal Construction Sector: Understanding Market Transformation. Government budget constraints and opportunities, shifting national priorities, and a diverse set of private businessmen with divergent objectives are rapidly changing the construction market. Key trends that a construction manager should be aware of that will shape the federal design and construction industry outlook in the future may include: Decreased overall investments driven by budget constraints and huge public and private sector debts.
Sustained focus upon sustainability and energy efficiency to achieve larger policy goals. Lasting legacy of national small business initiatives. Redefining Leadership: Strategic Thinking in Today’s VICUÑA world. Construction Industry Leaders and Design Professionals encounter on a daily basis VI-CA – resources in the development of strategic thinking today will survive. Strategy thinking includes: Protectiveness Inter-disciplinary cooperation and testing of new ideas.
Development of critical thinking skills Perpetual education and learning Flexibility in action and stiffness in focus. Modularization and Pre-fabrication It has been widely accepted that modularized and prefabricated sections in instruction will play a major role in the future of construction in terms of increased productivity in the entire construction chain of activities. Construction managers must transform their mindset towards these innovations and be open to drastically new approaches to design and scheduling of construction projects.
All construction industry shareholders must be convinced of the larger benefits. Designers including architects should embrace the possibilities of restraints in modular and prefab construction. Engineers must be familiarized with the manufacturing process of dollar and prefab elements as compared to on site fabrication and erection Manufacturers must be involved in pre planning activities. General and specialty contractors must learn to accept the advantages of modules and prefabs in terms of project schedule and safety.
Recovering the “Lost Generation” for the Future of the Construction Industry The “Lost Generation” pertain to these generation of 18 to 34 year olds who should have worked for the Construction Industry but were displaced due to the search of greener pastures in other unrelated fields (a lot of engineers are call-center agents) u to disillusionment on the future of the construction industry. The trend is calling back future minds into the industry by: Trashing the outmoded idea about career progression and how a mere college diploma of unqualified individuals fit in.
Examine the paradigm shift that a 5-year course in engineering is not the only path to the construction industry. Helping the incoming generation that the present construction industry culture of corruption and unfair practice is passe’. Show that the construction industry can offer long and short term solutions to their present and future economic woes. The Science of Efficiency and Productivity Present market conditions and competition requires productivity and efficiency a priority, not Just an adage.
There are a lot of engineering equations and formulas relating to these but the bottom line numbers pertaining to these are still ambiguous. Construction managers must: Exhaustively and introspectively put their noses on how they build Begin organizational changes from the top to bottom Employ new construction techniques such as modularization and prefab Address and embrace the human element in all aspects of construction – from the workers,
Economic Factors that will Shape the Future of Trade Unions A good construction manager must realize that the best solution to labor market problems in the construction industry is based on economics and not on politics. The labor unions in the industry must accept and realize that: Drastic changes due to current trends serve both their membership and their clients – the employers. They should provide trained and experienced workforce. They should offer a pool for trades and crafts. Work to provide their membership with trainings, decent work conditions, higher pay and benefits.
Convenience of Design and Construction Quite recently, there has been an upsurge in what appears to be a continuing phenomena in the construction industry where architectural, engineering and construction (A/E/C) firms are coming together through mergers, acquisitions, limited partnerships, consortium and by organic growth becoming A/E. /C companies. The impetus for this are: The demands and requirements of various clients. The natural instinct of companies to grow and survive. The increasing use of key technologies such as MM, project tracking software, etc. The Next Generation of Managers, are They Ready?
The ageing population of real practitioners within the industry has been moderately increasing. This will dramatically change the complexion of the construction industry in the next ten years. The urgency of putting a comprehensive succession plan in place must satisfy these following steps: Redefinition and clarification of the company’s vision. Development of updated business strategies and objectives Identification of leadership requirements Evaluation of possible candidates visit-Г-visit the organizational requirement Institutionalize development processes Outlining and implementation of a transition plan.
Globalization and how it will Impact the Construction Industry The present day multi- polar world which comprises several centers of economic strength and activity, had uprooted the old business models and approaches, therefore posing a real and present threat to the construction industry. On the upside, the same present-day scenario has presented itself new opportunities for construction managers and companies who favorably position themselves in the shifting economic landscape. Global success is possible though: Considering competitors as potential collaborators. Understanding the risks and barriers in entering the global market.
Thinking innovation. Positioning for success in multiple markets. Development of new core competencies and adaptation strategies. With this in mind, a practicing construction manager or a business enterprise could remain at par or even overtake competition in the global economy. The focus on more palpable and general business trends within the construction industry and its relationship with all the other economic forces will ensure any practitioner an advantage not only in today’s economic climate, but in future changes that may affect the industry, whatever section of this industry one may intend to be involved. References: