Discuss the construction industry’s contribution to (and the influence on) the macroeconomic environment

Assessment Requirement

Students are required to produce a report to a client on the construction industry’s future directions and possible business directions. Report should not exceed 3000 words (excluding tables and references). This assignment includes following tasks:

  • Discuss the construction industry’s contribution to (and the influence on) the macroeconomic environment.
  • Present the past and current status of the construction industry with the analysis of statistical data and policy papers/distinguished speeches/press reports etc. o Factual economic data from variety of sources such as Australian Bureau of Statistics, Reserve Bank of Australia, industry focused forecasting groups, government budgets etc. o And also opinions from reputed sources (budget speeches, political announcements, speeches form members holding responsible position in Governor of RBA, Chairman of MBA or HIA etc).
  • Produce a forecast report to identify the growth sectors of the construction industry (building or civil engineering) in the light of macroeconomic (monetary and fiscal) policies and market conditions and recommend a growth sector to the client. A synthesised discussion on both fact based hard (numerical data) and opinion based soft data (speeches and interviews of a person of authority in the area of economies) will provide the opportunity to forecast the future. The discussion should be placed in the context of Economic theories, particularly Fiscal and Monetary theories. The report should be logically structured and ‘data analysis’, ‘synthesis’ and ‘evaluation’ be clearly identified.



Assessment Scenario

‘David & Nathan Consultancy Services (D&N) is a successful medium size Australian based construction management consultancy firm. The firm offers quantity surveying services and business solutions. D & N have offices in Sydney, Melbourne, Perth and Brisbane. However, end of last year the Lake Groups acquired D & N. A business decision was made by the D &N partners to sell their business due to the retirement of the two senior partners. Lake Group consists of a number of companies including Lake Developments Ltd (an infant property development company), Lake Supplies Ltd (supplier of construction materials), Lake Facades (facade design, assembly and fixing business) and Lake Structural Ltd. Lake structural is a very successful precast structural concrete business, focusing on the civil engineering sector. However, Lake Group is planning to consolidate its new property development business and to wind down their civil engineering business eventually. Thomas is one of the directors of Lake Group. D & N Surveyors, as newly acquired business within the Lake Group, has been asked to provide internal service to Lake Groups business initiatives. Good news is that ‘You’ have been appointed by D & N to provide this consultancy services.

Venue: Boardroom Lake Developments – Park Road, North Ryde

Time: Monday 9.30 AM

Thomas (looking at you): ‘Coming to business… As you know we are a group of companies. We own the Lake Supplies Ltd, a building product supplies business, and Lake Structural Ltd. a civil engineering precast business for the past 25 years. We started our Facade Business about 15 years ago. We are now venturing into property development business and planning to wind down our civil engineering business in the future. An architect has been involved in our first mixed building development project for the past one year.

You: It is good to hear that Lake Group is expanding and hope the acquisition of D& N will provide you with extended business opportunities.

Thomas: Main purpose of today’s meeting is to request a forecast of the Australian construction industry. Curtailing our civil engineering sector involvement and investing in the building sector, has raised concerns among few of our directors. They want a thorough industry forecast analysis conducted before we move any further with this business decision. They want to know how the construction industry will perform in the next 5 years. In particular they want to know what sectors within the construction industry will prosper. As you know we are stretching our investments in both Building and Civil sectors and we want to make our future investment decision based on the industry analysis provided by D&N.

You: Yes I understand your requirements. We can provide you with a Macro economic analysis on the construction industry and identify the businesses sectors that you should target for the next 5 years. We also can provide a market analysis if you require.

Thomas: I do not think we need a market analysis at this stage. Our Board meets in seven weeks’ time. Can we have this report a week before that?

You: Certainly, we will have it ready for your next board meeting Thomas: Thank you and looking forward to working with you.

D & N Action (or assessment requirements)

‘A multiplicity of options are available for business investment within the construction industry. The sectors include civil infrastructure (roads, bridges, offshore structures etc.), building (residential, commercial, industrial etc), building services (architectural, engineering, quantity surveying etc), specialist trades (electrical, mechanical etc.) and building materials (concrete, cement, steel, formwork etc). However, within the scope of this report (except for assessment criteria 1 in the Rubric) you will be focusing on building and civil engineering sectors.


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