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    Building Economics Notes

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    Jackson
    This document discusses the laws of supply and demand and their relationship to construction demand. It begins with introductions to the key concepts of demand, supply, and the factors that influence them. Demand refers to how much of a good consumers are willing and able to purchase at different price points, while supply refers to how much producers are willing to sell. The law of demand states that as price increases, demand decreases, and vice versa. Similarly, the law of supply states that as price increases, supply increases. The relationship between these two laws is then explained through supply and demand curves. The document outlines over 15 determinants that influence construction demand, many of which are economic factors like income, interest rates, and GDP. It closes

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    Building Economics Notes

    Uploaded by

    Jackson
    374 views18 pages
    This document discusses the laws of supply and demand and their relationship to construction demand. It begins with introductions to the key concepts of demand, supply, and the factors that influence them. Demand refers to how much of a good consumers are willing and able to purchase at different price points, while supply refers to how much producers are willing to sell. The law of demand states that as price increases, demand decreases, and vice versa. Similarly, the law of supply states that as price increases, supply increases. The relationship between these two laws is then explained through supply and demand curves. The document outlines over 15 determinants that influence construction demand, many of which are economic factors like income, interest rates, and GDP. It closes

    Original Description:

    Construction Demand & Supply 1

    Original Title

    Building Economics notes

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    This document discusses the laws of supply and demand and their relationship to construction demand. It begins with introductions to the key concepts of demand, supply, and the factors that influence them. Demand refers to how much of a good consumers are willing and able to purchase at different price points, while supply refers to how much producers are willing to sell. The law of demand states that as price increases, demand decreases, and vice versa. Similarly, the law of supply states that as price increases, supply increases. The relationship between these two laws is then explained through supply and demand curves. The document outlines over 15 determinants that influence construction demand, many of which are economic factors like income, interest rates, and GDP. It closes

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    374 views18 pages

    Building Economics Notes

    Uploaded by

    Jackson
    This document discusses the laws of supply and demand and their relationship to construction demand. It begins with introductions to the key concepts of demand, supply, and the factors that influence them. Demand refers to how much of a good consumers are willing and able to purchase at different price points, while supply refers to how much producers are willing to sell. The law of demand states that as price increases, demand decreases, and vice versa. Similarly, the law of supply states that as price increases, supply increases. The relationship between these two laws is then explained through supply and demand curves. The document outlines over 15 determinants that influence construction demand, many of which are economic factors like income, interest rates, and GDP. It closes

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    of 18

    ABA 2307

    B. Arch 3rd Year 2015


    BUILDING ECONOMICS
    Lecture 3 & 4

    Construction Demand & Supply I


    Today's lecture plan, we will look at

    Introductions

    Law of demand & its determinants

    Law of supply

    Relationship between demand & supply

    Determinants of construction demand


    2

    Introduction

    In economics, the term demand refers to the


    amount of a good or service which consumers

    are both able and willing to purchase per unit


    of time at all alternative prices

    The qty demanded is the amount of a


    product people are willing to buy at a certain
    price
    3

    Introduction contd

    The relationship between price and quantity


    demanded is known as the demand

    relationship.

    Supply refers to the amount of good or


    service which sellers are willing to sell at all
    alternative prices
    4

    Law of demand

    It states that, if all other factors remain


    equal, the higher the price of a good, the less
    people will demand that good.

    Meaning the higher the price, the lower the


    quantity demanded

    Demand curve

    A, B and C are points on the demand curve. Each point on the


    curve reflects a direct correlation between qty demanded (Q)
    & price (P).
    6

    Determinants of demand
    1.

    price of the commodity,

    2.

    Consumers tastes and preferences,

    3.

    The number of consumers considered,

    4.

    Consumers income,

    5.

    The prices of related goods,

    6.

    The range of goods available to consumers

    7.

    Consumers expectations regarding future prices


    7

    Law of supply

    The law of supply demonstrates the

    quantities that will be sold at a certain price

    This means that the higher the price, the


    higher the qty supplied. Producers supply
    more at a higher price because selling a
    higher qty at a higher price increases
    revenue.
    8

    Law of supply

    A, B and C are points on the supply curve. Each point


    on the curve reflects a direct correlation between
    qty supplied (Q) & price (P)
    9

    Relationship btn demand & supply

    It shows that demand is inversely


    proportional to price while supply is directly

    proportional to it

    Demand for built facilities i.e. constructed


    space comes from 1st order primary needs
    for shelter to the higher order needs for
    production of goods and services
    10

    Relationship btn demand & supply

    This demand translates into construction


    demand, which in turn translates into

    construction supply commonly termed


    construction output.

    Demand is the value of contracts for new


    construction work awarded to main
    contractors including speculative work
    11

    Relationship btn demand & supply

    while construction output is the amount


    payable to contractors for work done in the

    relevant period

    Therefore, construction demand normally


    leads to construction output spread over a
    period of time
    12

    Determinants of Construction Demand


    1)
    2)

    3)
    4)
    5)
    6)

    7)

    Availability of credit
    Condition of the existing stock of built
    facilities
    Economic conditions economic growth &
    development
    Exchange rates
    Government action policy & expenditure
    Household disposable income
    Household formation rate
    13

    Determinants of Construction Demand


    Interest rates
    9) Inflation
    10) Money supply
    11) Peoples tastes & preferences for housing,
    entertainment etc
    12) Planning regulations
    13) Political climate conflict, governance,
    security etc
    14) Population (size, structure and geographical
    distribution)
    8)

    14

    Determinants of Construction Demand


    15) Prices

    tender prices, property prices &


    import prices
    16) Output
    17) Taxation
    18) Technology
    19) Unemployment
    20) Weather conditions.

    15

    Economy & Construction Investment

    A countrys economy and its construction investment


    16

    Determinants of Construction Demand


    > 50% of the determinants of construction

    demand listed above are economic factors

    A countrys economy & its construction


    investment are interdependent; their causal
    relationship is bi-directional

    Construction investment may be growth


    dependent or growth initiating.
    17

    Questions?

    18

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