Introduction
Construction is a separate independent branch of the state’s economy, which is necessary to commission new buildings and structures. In addition, reconstruction, expansion, repair, and technical re-equipment of existing production and non-production facilities. The defining role of the construction industry is to create conditions for the dynamic development of the country’s economy. The construction industry is of great importance in the development of the state: the economic efficiency of related sectors of the economy is primarily ensured by the intensive development of construction. The specifics of the industry are explained by the nature of its final products, specific working conditions, several specifics of the equipment used, technology, organization of production, management, and logistics.
Main body
Construction refers to the sphere of material production, i.e., to the industries that create material goods. The products of the construction industry are plants and factories built and put into operation, railways and highways, power plants, shipping channels, ports, residential buildings, and other objects that form the fixed assets of the economic complex of the country. In addition to the creation of fixed assets, the functions of capital construction include the expansion, reconstruction, and technical re-equipment of existing fixed assets. Therefore, the main task of capital construction is the expanded reproduction and qualitative renewal of fixed assets in all sectors of the country’s economy. Thus, capital construction creates material conditions that ensure the possibility of functioning the means of production.
Due to the coronavirus, there were failures in the supply chain, which caused the construction industry to suffer quite a lot. In addition, the rise in prices for building materials provoked the unfinished construction of some objects. Due to the combination of all factors, there was a decrease in production volumes in the construction sector. Likely, the growth rate of the construction industry in the United States will reach an average of 4.7% during 2021-2025 (BusinessWire, 2021a). This indicator consists of the need to build municipal institutions, for example, hospitals, since the coronavirus provoked an urgent need for this type of institution. Moreover, the states offer their residents favorable mortgage rates for primary real estate, which also contributes to the growth of the construction industry.
There are various companies in the construction industry that occupy different market shares and have different sizes of the enterprise itself.
Such companies include Jacobs Engineering Group, Lennar Corporation, Fluor Corporation, and others. There are quite a lot of companies involved in the construction industry, and therefore the competition is also relatively high, thanks to which prices are still at an acceptable level for residents of different countries. The global construction industry can reach $10.5 trillion by 2023 (BusinessWire, 2021b). However, at present, of the pandemic, construction prices are high as the coronavirus has provoked a delayed demand for real estate and an increase in these prices.
The latest political changes that have taken place in the construction market are related to the coronavirus pandemic. Due to the economic crisis, which manifested itself through the lack of customers in many institutions and companies, people began to invest in real estate. The state authorities supported this step and developed several preferential mortgage programs. Due to the desire to satisfy the demand for real estate, developers have been more actively engaged in construction. As a result, new residential buildings, non-residential premises, and other types of objects under construction began to appear, which allowed the construction industry to grow and flourish even during the epidemic.
Construction is especially closely connected with the industry. On the one hand, the increase in construction volumes depends on the development of initiatives that provide its technical equipment: machinery, materials, structures, electricity, etc.; on the other hand, performing construction and installation work for different sectors of the economy based on contract agreements, construction organizations are inextricably linked with the activities of customers. Several other industries act concerning construction both as suppliers and as consumers of construction products.
Still, the epidemic has caused some problems for the construction industry. Restrictive measures taken due to the pandemic led to the shutdown of some enterprises and construction projects, the demand for construction products decreased, and delays in the delivery of goods began to occur. In addition, suppliers have already announced an increase in prices for consumables: the cost of some of them is tied to the dollar exchange rate, which is currently unstable. Plans are being disrupted at several construction sites, and it is unclear when they will be able to return to the original schedule since some types of work are seasonal.
Conclusion
In conclusion, the construction industry is one of the largest industries that has undergone both ups and downs. Nevertheless, it continues to thrive, despite the increase in prices associated with the pandemic. This is facilitated by the active demand of the population, which provokes the purchase of construction projects to invest money. In this industry, competition is at a high level, but companies remain afloat and continue to compete. People predict growth in the construction industry in the future, but still, various circumstances may appear that may lead to a drop in prices for objects, materials for construction, etc.
References
BusinessWire. (2021a). 2021 United States Construction Industry Market Size & Forecast, by Value and Volume Across 40+ Market Segments. Web.
BusinessWire. (2021b). Global Construction Industry Report 2021: $10.5 Trillion Growth Opportunities by 2023. Web.