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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » The importance of construction sector to the overall economy

The importance of construction sector to the overall economy

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Sstar

Sstar
Vice President - Equity Analytics
Vice President - Equity Analytics
The construction industry makes a vital contribution to the competitiveness and prosperity of the economy. A modern, efficient infrastructure is a key driver of productivity, and the construction industry has a major role in delivering the built infrastructure in an innovative and cost effective way.

Firms throughout the economy are dependent on the performance of built infrastructure such as roads, rail, power stations and telecoms networks to remain competitive, and inward investors will consider the quality of the built infrastructure as one of the key factors when considering location decisions.

Our productivity also depends on the efficiency and nature of the built environment. The flexibility, mobility and effectiveness of the workforce and the productivity of firms depend on the availability of properly configured and located houses and premises.

The design, construction and operation of our built environment have other important economic effects, for example, on the rate at which we use resources. Buildings are responsible for almost half of the country’s carbon emissions, half of our water consumption, about one third of landfill waste and one quarter1 of all raw materials used in the economy.

Through its impact on the built environment, construction plays a central role in our drive to promote sustainable growth and development. This is why it’s vital that we invest in the right people with the right skills, to ensure that this sector continues to positively effect the way we all live our lives day-to-day.

There is a strong business case for a sustainable construction agenda, based on:

increasing profitability by using resources more efficiently;
firms securing opportunities offered by sustainable products or ways of working;
enhancing company image and profile in the market place by addressing issues relating to Corporate and Social Responsibility.
There are a number of other operations which can play a significant role in the effective delivery of a construction project. One of these is logistics – in its widest sense. Often considered a backroom function, logistics can be overlooked in terms of its contribution to the broad ‘improvement’ and sustainability agenda.

Studies have shown that improving logistics such as product transport, handling, delivery and storage, can reduce up to 2.5% of a capital project’s cost and significantly reduce waste and transport carbon emissions.

However, the construction industry has been perhaps a bit slow to challenge the status quo and look to better practices, but this is one area where construction companies can look to increasing their success.

Being more innovative in general is integral to developing new products for the market and new processes and ways of working for the sector. The industry needs to establish a framework within which innovation, research, development, demonstration, and knowledge transfer can thrive.

http://www.walesbusiness.org/2013/08/the-importance-of-construction-sector-to-the-overall-economy/

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