How Does Government Influence the Construction Industry? A Comprehensive Guide

Learn how government policies influence and shape the construction industry from investing in infrastructure projects to providing financial assistance for contractors.

How Does Government Influence the Construction Industry? A Comprehensive Guide

The United States government has a significant influence on the construction industry. An official website of the United States government, gov, belongs to an official government organization in the country. The construction sector includes establishments that are mainly dedicated to the construction of buildings or engineering projects, as well as those that are dedicated to preparing land for new construction and subdividing land for sale as construction sites. In addition, there are federal and state regulations that apply to the industry. When the government invests in infrastructure projects, it stimulates demand for materials and services related to construction.

This causes an increase in the availability of work due to the number of people employed by the industry, which represents about 7.6% of workers worldwide. According to Bon (1992, 2000), as a country develops, the share of construction in total GNP, as well as the total production of construction, follows an inverted U shape. Turin (197) argued that if the government misuses construction as a cheap way to absorb unskilled unemployment through poorly planned public works programs, it will only harm the healthy development of the construction industry. Private contractors also contribute to the development of the construction industry due to their competitiveness, efficiency and flexibility. In addition, more than 50% of available labor requirements for large projects are relegated to technology.

It is fair to say that if any industry can lead the recovery of the US economy, it should be the construction industry. The application of specific orders related to physical distancing, disinfection and other precautions on construction sites will give the industry the freedom to continue working on an intermediate scale, although it may take longer periods. Other forms of financial assistance that help contractors start heavy construction work may include credit to suppliers, direct loans from commercial banks, and the creation of companies that rent and lease equipment (World Bank, 198).In areas where there are low salaries or a high unemployment rate, it is recommended that construction companies adopt construction or repair methods that are more labor-based. When studying several countries with different incomes from different parts of the world, the World Bank (198) indicated that the fluctuation of construction production represented more than half of the manufacturing sector and the economy in general. Other difficulties could stem from technical considerations when the government wants to postpone the construction of infrastructure. The government's role in influencing and shaping the construction industry is undeniable. From investing in infrastructure projects to providing financial assistance for contractors and adopting labor-based methods in areas with low salaries or high unemployment rates, government policies have a direct impact on how this sector operates.

It is important for contractors and other stakeholders in this sector to stay up-to-date with changes in regulations and policies so they can adjust their operations accordingly.

Frank Gallegher
Frank Gallegher

Amateur tv geek. Devoted travel enthusiast. Friendly communicator. Hipster-friendly tv fan. Tv enthusiast.

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