The business cycle, demand for construction and appropriate selling methods for contractors

Master Thesis


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This dissertation is a record of research into two distinct areas that are brought together to test the primary hypothesis. These two areas are; the general business cycle and its effects of the performance of construction companies and the methods by which general contractors in the building industry, are able to market and sell their services or products. In part one, it is shown that there is a relationship between the business cycle and the demand for construction. The latter expands and contracts in sympathy with the cycle. The effects of the changes in the level of demand for buildings are analyzed and fully described, resulting in a model· which can be used to determine the sequence of effects for each phase of the business cycles. In part two, the methods by which contractors are selected and sell their service or product are analyzed and compared. The usage of each system is measured and it is found that change has occurred, the reasons for such change are investigated in order to gain an insight into potential future developments. This has been done in a way that is intended to strip the subject of it's mystique and confusion of terminology by the application of basic economic and marketing principles. New and improved terminology is suggested. The findings show that construction contractors can choose from a variety of 'selling systems'. These systems will provide competitive advantage to those who are able to predict the likely turning points of the business cycle and use those 'selling systems' that are appropriate to specific stages of the business cycle. The research was conducted by finding, analyzing and interpreting various time series data, by surveying architects quantity surveyors and contractors for facts and figures that were not available elsewhere, and by conducting a through survey of published books, articles and research papers.