A Mesoeconomic Analysis of the Construction Sector

University dissertation from Department of Construction Management, Lund Institute of Technology, Lund, Sweden

Abstract: The fundamental question posed in this study is how to approach the construction sector in order to cover its wide scope of activities, its great variety of actors and the external influences on it from the market and institutional environment. Construction includes such diverse economic activities as new production and as repair/maintenance, itinerant production and stationary manufacture, the production of buildings and constructions, and it involves a large number of actors representing different professions and types, e.g. companies, public utilities and private persons. Thus, the construction sector includes a large number of interrelated actors who are involved in more or less specialised economic activities under the influences of market forces and state regulations. One well-established way to approach construction is the construction process model, which divides construction into its three principal phases, namely, design, production and real estate management. However, this process model puts production issues in focus but does not include manufacture or the growing importance of repair and maintenance, which is becoming apparent in developed European countries. Thus, the construction process model provides a too narrow approach to construction, which is inadequate to capture the diversity and complexity of construction activities. This study presents, as its basic objective, an analysis model of construction, based on the need for a comprehensive approach to construction. The analysis model has its theoretical basis in mesoeconomics, which is described as the intermediate level between micro- and macroeconomics. The analysis model for construction based on mesoeconomics aligns with the structure of a systems analysis, with specific emphasis on a comprehensive aggregation level and consideration of the influences of the institutional environment. Thus, the analysis model developed in this study, referred to as the mesoeconomic analysis, describes the construction sector as an open system, composed of interacting components that carry out economic activities ranging from manufacture, production, to asset management. A test of the mesoeconomic analysis, applied to the construction sectors of Denmark, Germany and Sweden, concluded that the analysis model developed in fact provides an appropriate framework for the analysis of construction at a sector aggregation level and as such, it provides a basis for comparative analysis of the construction sectors of different, developed countries. However, the review of the application of the analysis model also identified difficulties concerning the structure and accessibility of the information required for the analysis and difficulties related to the characteristics of a systems analysis. The conclusion is that the mesoeconomic analysis of construction provides a comprehensive approach, which facilitates a broad field of potential applications.

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