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The Economics of Construction

Stephen Gruneberg, Noble Francis

£55.00 | $75.00
ISBN 9781788210140
£16.00 | $25.00
ISBN 9781788210157
£16.00 | $25.00
ISBN 9781788210164
232 pages | 210 x 148mm | December 2018
Series: The Economics of Big Business


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 (and generates a third of the world’s CO2 emissions). So important is the contruction industry that it is widely seen as the best indicator of a national economy’s health.

Stephen Gruneberg and Noble Francis, two of the UK’s leading construction economists, present an up-to-date analysis of the construction industry’s business model and the risks and challenges the industry faces in the twenty-first century. The book explores the many distinctive features of the economics of the industry, such as how firms use cost-reduction rather than profit maximizing behaviour, the processes of tendering and procurement, and the often cyclical nature of demand. Some of the issues touched on include the nature of the government-client relationship, the difference between commissioned and speculative construction development, operating as well as building infrastructure, the advantages of off-site construction, the demand for green and sustainable construction, and the competition from government-backed Chinese companies in major infrastructure projects.

As well as examining industry-wide issues, the book looks at how individual projects are costed. These can range from the construction of Dubai's Yas Island or Heathrow’s third runway, to the construction of a local hospital, or a residential housing estate. Finance, cash flow, cost overruns and labour relations are all shown to be fundamental to completing a project on time and within budget, regardless of size.

The book offers authoritative analysis and expert insight to provide a survey suitable for both students in business schools and departments of architecture and the built environment.


1. Getting to grips with construction industry statistics
2. Economic theory of markets and construction
3. Running a construction firm
4. The firm and economies of growth
5. Productivity and the construction market
6. The game of construction
7. The underlying causes of conflict in construction
8. Construction and cyclicality
9. Projects
10. The economics of construction project management
Case study 1: Carillion
Case study 2: Grenfell Tower
Case study 3: Offsite manufacturing for housing

Author Information

Noble Francis is Economics Director at the Construction Projects 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 a Visiting Professor in the Faculty of Architecture and the Built Environment at the Univerity of Westminster.

Stephen Gruneberg is Reader in Construction Economics in the Faculty of Architecture and the Built Environment at the University of Westminster. He has written several books on the economics of the construction sector, most recently Programme Procurement: Lessons from London 2012 (with John Mead). His particular research interests include global construction industry data and government policy towards the building industry.

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