Tag Archives: Factors

Factors that affects the construction industry

For the functioning of any industry/business, there are few factors that have to work positively or else the chances of the industry to develop any further become obscure. This is why there are companies who have hired strategists so that they can frame plans to ensure that the factors that can have a positive impact on their company never cease to exist. The entire construction domain heavily depends on such factors which in a way have to be conducive for the industry to exist. For instance, constant availability of raw materials is one of the most important immediate requirements of the construction business. A couple of days ago you may find the stock to be in order but just within 2 days you may find it to be almost empty. Now the contacts that you have with the suppliers’ is instrumental. That acts as one of the factor.

After having ordered the materials you also need to keep a tab on the time it may take for the stuffs to come. Now there can be some factors which are beyond our control. Factors like flood, hurricane and other such natural catastrophes can’t be known and therefore if something of this kind strikes the place from where the raw materials was supposed to come it will only unnecessarily delay the project. It is therefore important that you have to foresee the requirement as you will not be able to foresee the catastrophe and accordingly keep your stock up to date.

There are also few factors that can affect the overall construction industry positively. One such example is fall in the price of fuel or lowering of interest rate by the federal government. Both can be good news for the construction company who manufactures condos, PUDs and single unit residences. They will be able to save a lot on fuel and still get the same work done and sell it at no lesser price or perhaps at a slightly lesser price. Fall in the interest rates does not have a direct impact on the construction company but it more or less benefits the common man who goes out hunting for a home. If the interest rate is down, it means that the general public will now aggressively look for a property and the construction company will be able to sell their produces like hot cakes during this time.

Construction industry is closely linked with the heavy equipment sector. So if there comes a problem in the heavy equipment sector, it will have a direct and a big impact on the construction industry. Fall in fuel price normally hurt the economy of the heavy equipment industry. This means that though the fall in fuel price can bring smile on the faces of the contractors but can simultaneously make the heavy equipment industry look grimmer. Heavy equipment companies will therefore begin cutting costs by shutting down few of their offices or can even increase the price of their machine to sustain. They may even call off the production of some affordable heavy equipment to save themselves from incurring losses.