Civil Engineering Reference
In-Depth Information
up of many markets. To emphasise this point, consider the flow diagram set out in
Figure 1.3
(page 12).
THE EXAMPLE OF ONE BUILDING PROJECT
In
Figure 1.3
we represent a set of markets that could be involved in the
construction of a small commercial building. The construction process from
inception to completion is shown to comprise a number of separate markets. The
completion of each operation, or stage, is the concern of several construction firms
competing to supply materials, components, labour, etc.
Figure 1.3
highlights the
number of fragmented activities involved in completing just one small building. Each
independent firm, in effect, is more concerned with its specific contribution than the
project as a whole. In many ways, the next project in a firm's market sector may
well be competing for its attention while it is still finishing the present project.
We discuss the characteristics of fragmentation and the resulting poor flow
of information in
Chapters 6
and
9
respectively. We also identify these issues as a
problem to resolve in
Chapter 15
, where we analyse loosely connected activities as a
barrier to achieving sustainable construction.
METHODOLOGY
This introductory chapter aims to explain what construction economics is all about.
Therefore, apart from identifying the central concepts, we need to consider the
methods employed by economists, as the approach taken to a discipline also helps
to specify the nature of the subject. In general terms, economics is a social science
and it attempts to make use of the same kinds of methods as other sciences, such as
biology, physics and chemistry. Like these other sciences, economics uses models or
theories.
Economic models are simplified representations of the real world that we use
to understand, explain and predict economic phenomena.
These models may take on various forms such as verbal statements, numerical tables
and graphs - and, at the more advanced level, mathematical equations. For the most
part, the models presented in this text consist of verbal statements and graphs.
A particular challenge faced by students of construction economics is that many
of the processes in the industry do not lend themselves easily to generalisations
and models. First, the construction industry involves a large variety of interests
and parties that makes the process rather complex and plagued with unwarranted
assumptions about what is possible. Second, economic analysis is only one of the
disciplines contributing to the process as a whole. And, third, there is a distinct lack
of vision about the role of construction in society and how it could better serve its
clients. As Professor Duccio Turin poetically observed:
[T]he building process is a world of 'as if'. It is 'as if' the client knew what
he wanted when he commissioned the building from a designer; it is 'as
if' the designer was in a position to advise the client on the best value-for-
money he could obtain in the market; it is 'as if' contractual procedures
