Tag Archives: key market trends

What are the key market trends impacting the growth of the construction industry

The prosperity and decline of any industry is directly co-related to the market trends. It has a direct impact on how the industry as a whole is performing. The industry may do exceptionally well if the market trends that positively impact the growth of the industry are on an upward trend. However, the same industry with the fall in the market trends can perform disastrously. Therefore it is quite important to understand the ever changing circumstances of the industry and try to foresee them well in advance so that necessary steps can be taken to make the most during good times and save the business from crippling during the bad times. The growth of the construction industry is also completely dependent on the various market trends that in fact govern the industry. Construction houses take most of their decisions keeping in view these trends and act swiftly if they feel that the trend is now in their favor.

The fall in the oil price:-

The oil price plays an important role in the growth of the construction industry. If there is a fall in the oil price, it affects the industry both positively as well as negatively. The positive part is that the companies can now manage to save good chunk of money not buying oil at higher prices to operate heavy equipment. They can utilize the money to meet other operational costs. However, the negative part is that they are experience a sudden rise in the price of heavy equipment. So if a construction company wants to buy some construction machines, they may have to shell out more money for that purpose. The heavy equipment manufacturing companies increase the price of their product so that they can sustain in a market where the oil price is relatively lower.

Fall in interest rates:-

The rise and fall of the interest rates also has a greater impact on the growth of the construction industry. When the interest rate takes a dip, people flock in to banks to avail home loans. This means that the market for apartments and individuals houses is on the rise. The construction companies who build condominium and houses for people to stay see this as a great business opportunity and increase the pace of their work. If they can manage to construct the apartments till the time the interest rates are down they can mint good money out of it.

Government policies:-

The policies of the government also play a crucial role in determining the market trend and which way the industry will move for the next few years. For instance, the government of the state is keen on developing the construction sector then it is evident that all the sectors pertaining to the construction sector will do well. The hurdles that one usually experience like getting proper licenses are all dealt smoothly. Positive government policy will define the overall trend of the market and the industry will blossom if things fall right in place.

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