Poor Economic state of the World | Effect on Construction Industry and its prevention
Sudden Economic change is extremely bad for Construction industry of any country. The status of Global markets determines the behaviour of an individual country. For example, if the economy of United Kingdom is suffering due to employment problems in the country or financial crisis; it affects the whole of Europe. On the whole, the economy of Europe plays a great role in moving the market.
The first and foremost bad effect of the market would be:
Banks going bankrupt. Banks are the main sources of capital for major construction projects.
Construction industry is capital intensive.
Because of the banks going bankrupt, there is not enough capital in the market that could be utilized for new projects. Because of less money in the market, people are unable to afford luxury homes, offices. This has two major effects on the construction industry:
- Since, people do not have the money to buy buildings, Existing projects are stalled due to increasing raw material cost and decreasing real estate value. No more gigantic home loans available.
- After analyzing the scenario of the bad economic conditions of the market, the builders decide to scrap the idea of new constructions and decide to wait for the right time to start the project. This brings recession in the construction industry which affects architects, engineers and mainly workers badly.
Financial Crisis in the country will result in major construction firms going bankrupt which in turn would be responsible for the loss of thousands of jobs.
Is it possible to prevent this from happening? If yes, then how?
A new system of design is needed to ensure very low energy footprint, sustainable development and optimum use of local materials.
A renewed focus is needed on Green building Design…