Construction is a general term meaning the
art
Art is a diverse range of human activity, and resulting product, that involves creative or imaginative talent expressive of technical proficiency, beauty, emotional power, or conceptual ideas.
There is no generally agreed definition of wha ...
and
science
Science is a systematic endeavor that builds and organizes knowledge in the form of testable explanations and predictions about the universe.
Science may be as old as the human species, and some of the earliest archeological evidence for ...
to form
objects
Object may refer to:
General meanings
* Object (philosophy), a thing, being, or concept
** Object (abstract), an object which does not exist at any particular time or place
** Physical object, an identifiable collection of matter
* Goal, an ...
,
systems
A system is a group of interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its boundaries, structure and purpose and express ...
, or
organizations
An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose.
The word is derived from ...
,
["Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Press 2009] and comes from
Latin
Latin (, or , ) is a classical language belonging to the Italic branch of the Indo-European languages. Latin was originally a dialect spoken in the lower Tiber area (then known as Latium) around present-day Rome, but through the power of the ...
''constructio'' (from ''com-'' "together" and ''struere'' "to pile up") and
Old French
Old French (, , ; Modern French: ) was the language spoken in most of the northern half of France from approximately the 8th to the 14th centuries. Rather than a unified language, Old French was a linkage of Romance dialects, mutually intelligib ...
''construction''. To construct is the
verb
A verb () is a word (part of speech) that in syntax generally conveys an action (''bring'', ''read'', ''walk'', ''run'', ''learn''), an occurrence (''happen'', ''become''), or a state of being (''be'', ''exist'', ''stand''). In the usual descri ...
: the act of building, and the
noun
A noun () is a word that generally functions as the name of a specific object or set of objects, such as living creatures, places, actions, qualities, states of existence, or ideas.Example nouns for:
* Living creatures (including people, alive, d ...
is construction: how something is built, the nature of its structure.
In its most widely used context, construction covers the processes involved in delivering
building
A building, or edifice, is an enclosed structure with a roof and walls standing more or less permanently in one place, such as a house or factory (although there's also portable buildings). Buildings come in a variety of sizes, shapes, and fun ...
s,
infrastructure
Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
, industrial facilities and associated activities through to the end of their life. It typically starts with
planning
Planning is the process of thinking regarding the activities required to achieve a desired goal. Planning is based on foresight, the fundamental capacity for mental time travel. The evolution of forethought, the capacity to think ahead, is consi ...
,
financing
Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm uses ...
, and
design
A design is a plan or specification for the construction of an object or system or for the implementation of an activity or process or the result of that plan or specification in the form of a prototype, product, or process. The verb ''to design'' ...
, and continues until the asset is built and ready for use; construction also covers repairs and maintenance work, any works to expand, extend and improve the asset, and its eventual
demolition
Demolition (also known as razing, cartage, and wrecking) is the science and engineering in safely and efficiently tearing down of buildings and other artificial structures. Demolition contrasts with deconstruction, which involves taking a ...
, dismantling or
decommission
Decommissioning is a general term for a formal process to remove something from an active status, and may refer to:
Infrastructure
* Decommissioned offshore
* Decommissioned highway
* Greenfield status of former industrial sites
* Nuclear decommi ...
ing.
The construction industry contributes significantly to many countries’ gross domestic products (GDP). Global expenditure on construction activities was about $4 trillion in 2012. Today, expenditure on the construction industry exceeds $11 trillion a year, equivalent to about 13 percent of global
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
. This spending was forecast to rise to around $14.8 trillion in 2030.
Although the construction industry promotes economic development and brings many non-monetary benefits to many countries, it is one of the most hazardous industries. For example, about 20% (1,061) of US industry fatalities in 2019 happened in construction.
History
The first
huts
A hut is a small dwelling, which may be constructed of various local materials. Huts are a type of vernacular architecture because they are built of readily available materials such as wood, snow, ice, stone, grass, palm leaves, branches, hid ...
and shelters were constructed by hand or with simple tools. As
cities
A city is a human settlement of notable size.Goodall, B. (1987) ''The Penguin Dictionary of Human Geography''. London: Penguin.Kuper, A. and Kuper, J., eds (1996) ''The Social Science Encyclopedia''. 2nd edition. London: Routledge. It can be def ...
grew during the
Bronze Age
The Bronze Age is a historic period, lasting approximately from 3300 BC to 1200 BC, characterized by the use of bronze, the presence of writing in some areas, and other early features of urban civilization. The Bronze Age is the second pri ...
, a class of professional
craftsmen
Craftsman may refer to:
A profession
*Artisan, a skilled manual worker who makes items that may be functional or strictly decorative
* Master craftsman, an artisan who has achieved such a standard that he may establish his own workshop and take ...
, like
bricklayer
A bricklayer, which is related to but different from a mason, is a craftsman and tradesman who lays bricks to construct brickwork. The terms also refer to personnel who use blocks to construct blockwork walls and other forms of masonry. ...
s and
carpenters
Carpentry is a skilled trade and a craft in which the primary work performed is the cutting, shaping and installation of building materials during the construction of buildings, ships, timber bridges, concrete formwork, etc. Carpenters t ...
, appeared. Occasionally,
slaves
Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
were used for construction work. In the
Middle Ages
In the history of Europe, the Middle Ages or medieval period lasted approximately from the late 5th to the late 15th centuries, similar to the post-classical period of global history. It began with the fall of the Western Roman Empire a ...
, the artisan craftsmen were organized into
guild
A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular area. The earliest types of guild formed as organizations of tradesmen belonging to a professional association. They sometimes ...
s. In the 19th century, steam-powered machinery appeared, and, later, diesel- and electric-powered vehicles such as
cranes,
excavator
Excavators are heavy construction equipment consisting of a boom, dipper (or stick), bucket and cab on a rotating platform known as the "house". The house sits atop an undercarriage with tracks or wheels. They are a natural progression fro ...
s and
bulldozer
A bulldozer or dozer (also called a crawler) is a large, motorized machine equipped with a metal blade to the front for pushing material: soil, sand, snow, rubble, or rock during construction work. It travels most commonly on continuous track ...
s.
Fast-track construction Fast-track building construction is construction industry jargon for a project delivery strategy to start construction before the design is complete. The purpose is to shorten the time to completion.
Benefits
Shorter schedules are desirable for r ...
has been increasingly popular in the 21st century. Some estimates suggest that 40% of construction projects are now fast-track construction.
Construction industry sectors
Broadly, there are three sectors of construction: buildings, infrastructure and industrial:
* Building construction is usually further divided into residential and non-residential.
* Infrastructure, also called
heavy civil or heavy engineering, includes large public works, dams, bridges, highways, railways, water or wastewater and utility distribution.
* Industrial construction includes
offshore construction
Offshore construction is the installation of structures and facilities in a marine environment, usually for the production and transmission of electricity, oil, gas and other resources. It is also called maritime engineering.
Construction a ...
(mainly of energy installations), mining and quarrying,
refineries
A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value.
Types of refineries
Different types of refineries ar ...
, chemical processing,
power generation
Electricity generation is the process of generating electric power from sources of primary energy. For utilities in the electric power industry, it is the stage prior to its delivery ( transmission, distribution, etc.) to end users or its stor ...
, mills and
manufacturing plants
A factory, manufacturing plant or a production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. T ...
.
The industry can also be classified into sectors or markets. For example, ''
Engineering News-Record
''Engineering News-Record'' (widely known as ''ENR'') is an American weekly magazine that provides news, analysis, data and opinion for the construction industry worldwide. It is widely regarded as one of the construction industry's most authori ...
'' (''ENR''), a US-based construction trade magazine, has compiled and reported data about the size of design and construction contractors. In 2014, it split the data into nine market segments: transportation,
petroleum
Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crud ...
, buildings, power, industrial, water, manufacturing, sewer/waste,
telecom, hazardous waste, and a tenth category for other projects. ''ENR'' used data on transportation, sewer, hazardous waste and water to rank firms as heavy contractors.
The
Standard Industrial Classification
The Standard Industrial Classification (SIC) was a system for classifying industries by a four-digit code as a method of standardizing industry classification for statistical purposes across agencies. Established in the United States in 1937, it ...
and the newer
North American Industry Classification System
The North American Industry Classification System or NAICS () is a classification of business establishments by type of economic activity (process of production). It is used by government and business in Canada, Mexico, and the United States of A ...
classify companies that perform or engage in construction into three subsectors: building construction, heavy and civil engineering construction, and specialty trade contractors. There are also categories for professional services firms (e.g.,
engineering
Engineering is the use of scientific method, scientific principles to design and build machines, structures, and other items, including bridges, tunnels, roads, vehicles, and buildings. The discipline of engineering encompasses a broad rang ...
,
architecture
Architecture is the art and technique of designing and building, as distinguished from the skills associated with construction. It is both the process and the product of sketching, conceiving, planning, designing, and constructing building ...
,
surveying
Surveying or land surveying is the technique, profession, art, and science of determining the terrestrial two-dimensional or three-dimensional positions of points and the distances and angles between them. A land surveying professional is ca ...
,
project management
Project management is the process of leading the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. Th ...
).
Building construction
Building construction is the process of adding structures to areas of land, also known as
real property
In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or affixe ...
sites. Typically, a project is instigated by or with the owner of the property (who may be an individual or an organisation); occasionally, land may be
compulsorily purchased from the owner for public use.
Residential construction
Residential construction may be undertaken by individual land-owners (
self-build
Self-build is the creation of an individual home for oneself through a variety of methods. The self-builder's input into this process varies from doing the actual construction to contracting the work to an architect or building package company.
...
), by specialist
housebuilders, by
property developer
Real estate development, or property development, is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others. R ...
s, by
general contractor
A general contractor, main contractor or prime contractor is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of ...
s, or by providers of
public or social housing (e.g.: local authorities,
housing association
In Ireland and the United Kingdom, housing associations are private, Non-profit organization, non-profit making organisations that provide low-cost "Public housing in the United Kingdom, social housing" for people in need of a home. Any budge ...
s). Where local
zoning
Zoning is a method of urban planning in which a municipality or other tier of government divides land into areas called zones, each of which has a set of regulations for new development that differs from other zones. Zones may be defined for a si ...
or
planning
Planning is the process of thinking regarding the activities required to achieve a desired goal. Planning is based on foresight, the fundamental capacity for mental time travel. The evolution of forethought, the capacity to think ahead, is consi ...
policies allow,
mixed-use development
Mixed-use is a kind of urban development, urban design, urban planning and/or a zoning type that blends multiple uses, such as residential, commercial, cultural, institutional, or entertainment, into one space, where those functions are to some ...
s may comprise both residential and non-residential construction (e.g.: retail, leisure, offices, public buildings, etc.).
Residential construction practices,
technologies
Technology is the application of knowledge to reach practical goals in a specifiable and reproducible way. The word ''technology'' may also mean the product of such an endeavor. The use of technology is widely prevalent in medicine, science, ...
, and resources must conform to local building
authority
In the fields of sociology and political science, authority is the legitimate power of a person or group over other people. In a civil state, ''authority'' is practiced in ways such a judicial branch or an executive branch of government.''The N ...
regulations and
codes of practice. Materials readily available in the area generally dictate the construction materials used (e.g.:
brick
A brick is a type of block used to build walls, pavements and other elements in masonry construction. Properly, the term ''brick'' denotes a block composed of dried clay, but is now also used informally to denote other chemically cured cons ...
versus stone versus
timber
Lumber is wood that has been processed into dimensional lumber, including beams and planks or boards, a stage in the process of wood production. Lumber is mainly used for construction framing, as well as finishing (floors, wall panels, wi ...
). Costs of construction on a per square meter (or per square foot) basis for
house
A house is a single-unit residential building. It may range in complexity from a rudimentary hut to a complex structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air condi ...
s can vary dramatically based on site conditions, access routes, local regulations,
economies of scale
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
(custom-designed homes are often more expensive to build) and the availability of skilled tradespeople.
Non-residential construction
Depending upon the
type of building, non-residential building construction can be procured by a wide range of private and public organisations, including local authorities, educational and religious bodies, transport undertakings, retailers, hoteliers, property developers, financial institutions and other private companies. Most construction in these sectors is undertaken by general
contractors
A general contractor, main contractor or prime contractor is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of ...
.
Infrastructure construction
Civil engineering covers the design, construction, and maintenance of the physical and naturally built environment, including public works such as roads, bridges, canals, dams, tunnels, airports, water and sewerage systems, pipelines, and railways. Some general contractors have expertise in civil engineering; civil engineering contractors are firms dedicated to work in this sector, and may specialise in particular types of infrastructure.
Industrial construction
Industrial construction
Construction is a general term meaning the art and science to form objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Press 2009 and co ...
includes offshore construction (mainly of energy installations:
oil and gas platforms,
wind power
Wind power or wind energy is mostly the use of wind turbines to electricity generation, generate electricity. Wind power is a popular, sustainable energy, sustainable, renewable energy source that has a much smaller Environmental impact of wi ...
),
mining
Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic via ...
and
quarry
A quarry is a type of open-pit mine in which dimension stone, rock, construction aggregate, riprap, sand, gravel, or slate is excavated from the ground. The operation of quarries is regulated in some jurisdictions to reduce their envi ...
ing,
refineries
A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value.
Types of refineries
Different types of refineries ar ...
,
breweries
A brewery or brewing company is a business that makes and sells beer. The place at which beer is commercially made is either called a brewery or a beerhouse, where distinct sets of brewing equipment are called plant. The commercial brewing of bee ...
,
distilleries
Distillation, or classical distillation, is the process of separating the components or substances from a liquid mixture by using selective boiling and condensation, usually inside an apparatus known as a still. Dry distillation is the heating ...
and other processing plants,
power station
A power station, also referred to as a power plant and sometimes generating station or generating plant, is an industrial facility for the generation of electric power. Power stations are generally connected to an electrical grid.
Many p ...
s,
steel mill
A steel mill or steelworks is an industrial plant for the manufacture of steel. It may be an integrated steel works carrying out all steps of steelmaking from smelting iron ore to rolled product, but may also be a plant where steel semi-finish ...
s,
warehouse
A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities ...
s and
factories
A factory, manufacturing plant or a production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. T ...
.
Construction processes
Some construction projects are small renovations or repair jobs, like repainting or fixing leaks, where the owner may act as designer, paymaster and laborer for the entire project. However, more complex or ambitious projects usually require additional multi-disciplinary expertise and manpower, so the owner may commission one or more specialist businesses to undertake detailed planning, design, construction and handover of the work. Often the owner will appoint one business to oversee the project (this may be a
designer
A designer is a person who plans the form or structure of something before it is made, by preparing drawings or plans.
In practice, anyone who creates tangible or intangible objects, products, processes, laws, games, graphics, services, or exp ...
, a
contractor
A contractor is a person or company that performs work on a contract basis. The term may refer to:
Business roles
* Defense contractor, arms industry which provides weapons or military goods to a government
* General contractor, an individual o ...
, a
construction manager
Construction management (CM) is a professional service that uses specialized, project management techniques and software to oversee the planning, design, construction and closeout of a project. The purpose of Construction management is to control ...
, or other advisors); such specialists are normally appointed for their expertise in project delivery, and will help the owner define the project
brief
Brief, briefs, or briefing may refer to:
Documents
* A letter
* A briefing note
* Papal brief, a papal letter less formal than a bull, sealed with the pope's signet ring or stamped with the device borne on this ring
* Design brief, a type of ed ...
, agree on a
budget
A budget is a calculation play, usually but not always financial, for a defined period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including time, costs and expenses, environmenta ...
and
schedule
A schedule or a timetable, as a basic time-management tool, consists of a list of times at which possible tasks, events, or actions are intended to take place, or of a sequence of events in the chronological order in which such things are i ...
, liaise with relevant public authorities, and procure the services of other specialists (the
supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, acti ...
, comprising
subcontractor
A subcontractor is an individual or (in many cases) a business that signs a contract to perform part or all of the obligations of another's contract.
Put simply the role of a subcontractor is to execute the job they are hired by the contractor f ...
s).
Contracts
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
are agreed for the delivery of services by all businesses, alongside other detailed plans aimed at ensuring legal, timely, on-budget and safe delivery of the specified works.
Design, finance, and legal aspects overlap and interrelate. The design must be not only structurally sound and appropriate for the use and location, but must also be financially possible to build, and legal to use. The financial structure must be adequate to build the design provided, and must pay amounts that are legally owed. Legal structures integrate design with other activities, and enforce financial and other construction processes.
These processes also affect procurement strategies. Clients may, for example, appoint a business to design the project, after which a competitive process is undertaken to appoint a lead contractor to construct the asset (
design–bid–build
Design–bid–build (or design/bid/build, and abbreviated D–B–B or D/B/B accordingly), also known as Design–tender (or "design/tender") traditional method or hardbid, is a project delivery method in which the agency or owner contracts with ...
); they may appoint a business to lead both design and construction (
design-build); or they may directly appoint a designer, contractor and specialist subcontractors (
construction management
Construction management (CM) is a professional service that uses specialized, project management techniques and software to oversee the planning, design, construction and closeout of a project. The purpose of Construction management is to control ...
). Some forms of procurement emphasize collaborative relationships (
partnering, alliancing) between the client, the contractor, and other stakeholders within a construction project, seeking to ameliorate often highly competitive and adversarial industry practices.
Planning
When applicable, a proposed construction project must comply with local
land-use planning
Land use planning is the process of regulating the use of land by a central authority. Usually, this is done to promote more desirable social and environmental outcomes as well as a more efficient use of resources. More specifically, the goals ...
policies including
zoning
Zoning is a method of urban planning in which a municipality or other tier of government divides land into areas called zones, each of which has a set of regulations for new development that differs from other zones. Zones may be defined for a si ...
and
building code
A building code (also building control or building regulations) is a set of rules that specify the standards for constructed objects such as buildings and non-building structures. Buildings must conform to the code to obtain planning permission ...
requirements. A project will normally be assessed (by the 'authority having jurisdiction, AHJ, typically the
municipality
A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate.
The term ''municipality'' may also mean the go ...
where the project will be located) for its potential impacts on neighbouring properties, and upon existing infrastructure (transportation, social infrastructure, and utilities including water supply, sewerage, electricity, telecommunications, etc.). Data may be gathered through
site analysis
Site analysis is a preliminary phase of architectural and urban design processes dedicated to the study of the climatic, geographical, historical, legal, and infrastructural context of a specific site.
The result of this analytic process is a sum ...
,
site survey
Site surveys are inspections of an area where work is proposed, to gather information for a design or an estimate to complete the initial tasks required for an outdoor activity. It can determine a precise location, access, best orientation for the ...
s and
geotechnical investigation
Geotechnical investigations are performed by geotechnical engineers or engineering geologists to obtain information on the physical properties of soil earthworks and foundations for proposed structures and for repair of distress to earthworks and ...
s. Construction normally cannot start until
planning permission
Planning permission or developmental approval refers to the approval needed for construction or expansion (including significant renovation), and sometimes for demolition, in some jurisdictions. It is usually given in the form of a building perm ...
has been granted, and may require preparatory work to ensure relevant infrastructure has been upgraded before building work can commence. Preparatory works will also include surveys of existing utility lines to avoid damage-causing outages and other hazardous situations.
Some legal requirements come from ''
malum in se
''Malum in se'' (plural ''mala in se'') is a Latin phrase meaning ''wrong'' or ''evil in itself''. The phrase is used to refer to conduct assessed as sinful or inherently wrong by nature, independent of regulations governing the conduct. It is di ...
'' considerations, or the desire to prevent indisputably bad phenomena, e.g. explosions or bridge collapses. Other legal requirements come from ''
malum prohibitum
''Malum prohibitum'' (plural ''mala prohibita'', literal translation: "wrong s or because
S, or s, is the nineteenth Letter (alphabet), letter in the Latin alphabet, used in the English alphabet, modern English alphabet, the alphabets of other western European languages and others worldwide. Its name in English is English alphab ...
prohibited") is a List of Latin phrases, Latin phrase used in law to refer to conduct that constitutes an unlawful act only by virtue of statute, as opp ...
'' considerations, or factors that are a matter of custom or expectation, such as isolating businesses from a business district or residences from a residential district. An attorney may seek changes or exemptions in the law that governs the land where the building will be built, either by arguing that a rule is inapplicable (the bridge design will not cause a collapse), or that the custom is no longer needed (acceptance of live-work spaces has grown in the community).
During the construction of a building, a municipal building inspector usually inspects the ongoing work periodically to ensure that construction adheres to the approved plans and the local building code. Once construction is complete, any later changes made to a building or other asset that affect safety, including its use, expansion, structural integrity, and
fire protection
Fire protection is the study and practice of mitigating the unwanted effects of potentially destructive fires. It involves the study of the behaviour, compartmentalisation, suppression and investigation of fire and its related emergencies, as we ...
, usually require municipality approval.
Finance
Depending on the type of project,
mortgage bank
Mortgage bank is a bank that specializes in originating and/or servicing mortgage loans. In the United States, a mortgage bank is a state-licensed banking entity that makes mortgage loans directly to consumers. The difference between a mortgage b ...
ers,
accountant
An accountant is a practitioner of accounting or accountancy.
Accountants who have demonstrated competency through their professional associations' certification exams are certified to use titles such as Chartered Accountant, Chartered Certifi ...
s, and
cost engineers may participate in creating an overall plan for the financial management of a construction project. The presence of the mortgage banker is highly likely, even in relatively small projects since the owner's equity in the property is the most obvious source of funding for a building project. Accountants act to study the expected monetary flow over the life of the project and to monitor the payouts throughout the process. Professionals including cost engineers,
estimators
In statistics, an estimator is a rule for calculating an estimate of a given quantity based on observed data: thus the rule (the estimator), the quantity of interest (the estimand) and its result (the estimate) are distinguished. For example, the ...
and
quantity surveyor
A quantity surveyor (QS) is a construction industry professional with expert knowledge on construction costs and contracts. Qualified professional quantity surveyors are known as Chartered Surveyors (Members and Fellows of RICS) in the UK and Ce ...
s apply expertise to relate the work and materials involved to a proper valuation.
Financial planning ensures adequate safeguards and contingency plans are in place before the project is started, and ensures that the plan is properly executed over the life of the project. Construction projects can suffer from preventable financial problems. Underbids happen when builders ask for too little money to complete the project.
Cash flow
A cash flow is a real or virtual movement of money:
*a cash flow in its narrow sense is a payment (in a currency), especially from one central bank account to another; the term 'cash flow' is mostly used to describe payments that are expected ...
problems exist when the present amount of funding cannot cover the current costs for labour and materials; such problems may arise even when the overall budget is adequate, presenting a temporary issue. Cost overruns with government projects have occurred when the contractor identified change orders or project changes that increased costs, which are not subject to competition from other firms as they have already been eliminated from consideration after the initial bid.
Fraud
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
is also an occasional construction issue.
Large projects can involve highly complex financial plans and often start with a conceptual
cost estimate A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values.
A problem ...
performed by a
building estimator
A building estimator or cost estimator is an individual that quantifies the materials, labor, and equipment needed to complete a construction project. Building cost estimating can concern diverse forms of construction from residential properties t ...
. As portions of a project are completed, they may be sold, supplanting one lender or owner for another, while the logistical requirements of having the right trades and materials available for each stage of the building construction project carry forward.
Public–private partnership
A public–private partnership (PPP, 3P, or P3) is a long-term arrangement between a government and private sector institutions.Hodge, G. A and Greve, C. (2007), Public–Private Partnerships: An International Performance Review, Public Administ ...
s (PPPs) or
private finance initiative
The private finance initiative (PFI) was a United Kingdom government procurement policy aimed at creating "public–private partnerships" (PPPs) where private firms are contracted to complete and manage public projects. Initially launched in 199 ...
s (PFIs) may also be used to help deliver major projects. According to McKinsey & Company, McKinsey in 2019, the "vast majority of large construction projects go over budget and take 20% longer than expected".
Legal
A construction project is a complex net of construction contracts and other legal obligations, each of which all parties must carefully consider. A contract is the exchange of a set of obligations between two or more parties, and provides structures to manage issues. For example, construction delays can be costly, so construction contracts set out clear expectations and clear paths to manage delays. Poorly drafted contracts can lead to confusion and costly disputes.
At the start of a project, legal advisors seek to identify ambiguities and other potential sources of trouble in the contract structures, and to present options for preventing problems. During projects, they work to avoid and resolve conflicts that arise. In each case, the lawyer facilitates an exchange of obligations that matches the reality of the project.
Procurement
Traditional or Design-bid-build
Design-bid-build is the most common and well-established method of construction procurement. In this arrangement, the architect, engineer or builder acts for the client as the project coordinator. They design the works, prepare specifications and design deliverables (models, drawings, etc.), administer the contract, Request for tender, tender the works, and manage the works from inception to completion. In parallel, there are direct contractual links between the client and the main contractor, who, in turn, has direct contractual relationships with subcontractors. The arrangement continues until the project is ready for handover.
Design-build
Design-build became more common from the late 20th century, and involves the client contracting a single entity to provide design and construction. In some cases, the design-build package can also include finding the site, arranging funding and applying for all necessary statutory consents. Typically, the client invites several D&B contractors to submit proposals to meet the project brief and then selects a preferred supplier. Often this will be a consortium involving a design firm and a contractor (sometimes more than one of each). In the United States, Department of transportation, departments of transportation usually use design-build contracts as a way of progressing projects where states lack the skills or resources, particularly for very large projects.
Construction management
In a construction management arrangement, the client enters into separate contracts with the designer (architect or engineer), a construction management, construction manager, and individual Tradesman, trade contractors. The client takes on the contractual role, while the construction or project manager provides the active role of managing the separate trade contracts, and ensuring that they complete all work smoothly and effectively together. This approach is often used to speed up procurement processes, to allow the client greater flexibility in design variation throughout the contract, to enable the appointment of individual work contractors, to separate contractual responsibility on each individual throughout the contract, and to provide greater client control.
Design
In the industrialized world, construction usually involves the translation of designs into reality. Most commonly (i.e.: in a design-bid-build project), the design team is employed by (i.e. in contract with) the property owner. Depending upon the type of project, a design team may include architects, civil engineers, Mechanical engineering, mechanical engineers, Electrical engineering, electrical engineers, structural engineers, Fire protection engineering, fire protection engineers, planning consultants, architectural consultants, and archaeological consultants. A 'lead designer' will normally be identified to help coordinate different disciplinary inputs to the overall design. This may be aided by integration of previously separate disciplines (often undertaken by separate firms) into multi-disciplinary firms with experts from all related fields, or by firms establishing relationships to support design-build processes.
The increasing complexity of construction projects creates the need for design professionals trained in all phases of a project's life-cycle and develop an appreciation of the asset as an advanced technological system requiring close integration of many sub-systems and their individual components, including sustainability. For buildings, Architectural engineering, building engineering is an emerging discipline that attempts to meet this new challenge.
Traditionally, design has involved the production of Sketch (drawing), sketches, architectural drawing, architectural and engineering drawings, and Specification (technical standard), specifications. Until the late 20th century, drawings were largely hand-drafter, drafted; adoption of computer-aided design (CAD) technologies then improved design productivity, while the 21st-century introduction of building information modeling (BIM) processes has involved the use of computer-generated models that can be used in their own right or to generate drawings and other visualisations as well as capturing non-geometric data about building components and systems.
On some projects, work on-site will not start until design work is largely complete; on others, some design work may be undertaken concurrently with the early stages of on-site activity (for example, work on a building's foundations may commence while designers are still working on the detailed designs of the building's internal spaces). Some projects may include elements that are designed for off-site construction (see also prefabrication and modular building) and are then delivered to the site ready for erection, installation or assembly.
On-site construction
Once contractors and other relevant professionals have been appointed and designs are sufficiently advanced, work may commence on the project site. Typically, a construction site will include a secure perimeter to restrict unauthorised access, site access control points, office and welfare accommodation for personnel from the main contractor and other firms involved in the project team, and storage areas for materials, machinery and equipment. According to the ''McGraw-Hill Dictionary of Architecture and Construction's'' definition, construction may be said to have ''started'' when the first feature of the permanent structure has been put in place, such as pile driving, or the pouring of slabs or footings.
Commissioning and handover
Commissioning is the process of verifying that all subsystems of a new building (or other assets) work as intended to achieve the owner's project requirements and as designed by the project's architects and engineers.
Defects liability period
A period after handover (or practical completion) during which the owner may identify any shortcomings in relation to the building specification ('defects'), with a view to the contractor correcting the defect.
Maintenance, repair and improvement
Maintenance involves functional checks, servicing, repairing or replacing of necessary devices, equipment, machinery, building infrastructure, and supporting utilities in industrial, business, governmental, and residential installations.
Demolition
Demolition is the discipline of safely and efficiently tearing down
building
A building, or edifice, is an enclosed structure with a roof and walls standing more or less permanently in one place, such as a house or factory (although there's also portable buildings). Buildings come in a variety of sizes, shapes, and fun ...
s and other artificial structures. Demolition contrasts with deconstruction (building), deconstruction, which involves taking a building apart while carefully preserving valuable elements for reuse purposes (recycling - see also circular economy).
Industry scale and characteristics
Economic activity
The output of the global construction industry was worth an estimated $10.8 trillion in 2017, and in 2018 was forecast to rise to $12.9 trillion by 2022,
and to around $14.8 trillion in 2030.
As a sector, construction accounts for more than 10% of global GDP (in Developed country, developed countries, construction comprises 6-9% of GDP), and employs around 7% of the total employed workforce around the globe
(accounting for over 273 million full- and part-time jobs in 2014).
Since 2010,
China has been the world's largest single construction market.
The United States is the second largest construction market with a 2018 output of $1.581 trillion.
In the United States in February 2020, around $1.4 trillion worth of construction work was in progress, according to the United States Census Bureau, Census Bureau, of which just over $1.0 trillion was for the private sector (split roughly 55:45% between residential and nonresidential); the remainder was public sector, predominantly for state and local government.
Construction is a major source of employment in most countries; high reliance on small businesses, and under-representation of women are common traits. For example:
* In the US, construction employed around 11.4m people in 2020, with a further 1.8m employed in architectural, engineering, and related professional services - equivalent to just over 8% of the total US workforce.
The construction workers were employed in over 843,000 organisations, of which 838,000 were privately held businesses.
In March 2016, 60.4% of construction workers were employed by businesses with fewer than 50 staff.
Women are substantially underrepresented (relative to their share of total employment), comprising 10.3% of the US construction workforce, and 25.9% of professional services workers, in 2019.
* The Construction industry of the United Kingdom, United Kingdom construction sector contributed £117 billion (6%) to UK GDP in 2018, and in 2019 employed 2.4m workers (6.6% of all jobs). These worked either for 343,000 'registered' construction businesses, or for 'unregistered' businesses, typically self-employed contractors;
just over one million small/medium-sized businesses, mainly self-employed individuals, worked in the sector in 2019, comprising about 18% of all UK businesses.
Women comprised 12.5% of the UK construction workforce.
* In Armenia, the construction sector experienced growth during the latter part of 2000s. Based on National Statistical Service, Armenia's construction sector generated approximately 20% of Armenia's GDP during the first and second quarters of 2007. In 2009, according to the World Bank, 30% of Armenia's economy was from construction sector.
["Armenian Growth Still In Double Digits"](_blank)
Armenia Liberty (RFE/RL), September 20, 2007.
According to McKinsey & Company, McKinsey research, productivity growth per worker in construction has lagged behind many other industries across different countries including in the United States and in European countries. In the United States, construction productivity per worker has declined by half since the 1960s.
Construction GVA by country
Employment
Some workers may be engaged in manual labour as unskilled or semi-skilled workers; they may be skilled tradespeople; or they may be supervisory or managerial personnel. Under safety legislation in the United Kingdom, for example, construction workers are defined as people "who work for or under the control of a contractor on a construction site";
in Canada, this can include people whose work includes ensuring conformance with building codes and regulations, and those who supervise other workers.
Laborers comprise a large grouping in most national construction industries. In the United States, for example, in May 2021 the construction sector employed just over 7.5 million people, of whom just over 820,000 were laborers, while 573,000 were carpentry, carpenters, 508,000 were electricians, 258,000 were equipment operators and 230,000 were construction managers.
Like most business sectors, there is also substantial white-collar worker, white-collar employment in construction - 681,000 US workers were recorded by the United States Department of Labor as in 'office and administrative support occupations' in May 2021.
Large-scale construction requires collaboration across multiple disciplines. A project manager normally manages the budget on the job, and a Construction management, construction manager, design engineer, construction engineer or architect supervises it. Those involved with the design and execution must consider zoning requirements and legal issues, Environmental impact assessment, environmental impact of the project, Scheduling (production processes), scheduling,
budget
A budget is a calculation play, usually but not always financial, for a defined period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including time, costs and expenses, environmenta ...
ing and Construction bidding, bidding, construction site safety, availability and transportation of building materials, logistics, and inconvenience to the public, including those caused by construction delays.
There are many routes to the different careers within the construction industry. There are three main tiers of construction workers based on educational background and training, which vary by country:
Unskilled and semi-skilled workers
Unskilled and semi-skilled workers provide general site labor, often have few or no construction qualifications, and may receive basic site training.
Skilled tradespeople
Skilled tradesmen, tradespeople have typically served apprenticeships (sometimes in labor unions) or received technical training; this group also includes on-site managers who possess extensive knowledge and experience in their craft or profession. Skilled manual occupations include carpenters, electricians, plumbers, ironworkers, heavy equipment operators and Brick mason, masons, as well as those involved in project management. In the UK these require further education qualifications, often in vocational subject areas, undertaken either directly after completing Secondary education, compulsory education or through "on the job" apprenticeships.
Professional, technical or managerial personnel
Professional, technical and managerial personnel often have higher education qualifications, usually graduate degrees, and are trained to design and manage construction processes. These roles require more training as they demand greater technical knowledge, and involve more legal responsibility. Example roles (and qualification routes) include:
* Architect – Will usually have studied
architecture
Architecture is the art and technique of designing and building, as distinguished from the skills associated with construction. It is both the process and the product of sketching, conceiving, planning, designing, and constructing building ...
to degree level, and then undertaken further study and gained professional experience. In many countries, the title of "architect" is protected by law, strictly limiting its use to qualified people.
* Civil engineer – Typically holds a degree in a related subject and may only be eligible for membership of a professional institution (such as the UK's Institution of Civil Engineers, ICE) following completion of additional training and experience. In some jurisdictions, a new university graduate must hold a master's degree to become chartered, and persons with bachelor's degrees may become Engineering technologist, Incorporated Engineers.
* Building services engineering, Building services engineer – May also be referred to as an "M&E" or "mechanical, electrical, and plumbing (MEP) engineer" and typically holds a degree in mechanical or electrical engineering.
* Project manager – Typically holds a 4-year or greater higher education qualification, but are often also qualified in another field such as architecture, civil engineering or quantity surveying.
* Structural engineer – Typically holds a bachelor's or master's degree in structural engineering.
* Quantity surveyor – Typically holds a bachelor's degree in quantity surveying. UK chartered status is gained from the Royal Institution of Chartered Surveyors.
Safety
Construction is one of the most dangerous occupations in the world, incurring more occupational fatalities than any other sector in both the United States and in the European Union.
In the US in 2019, 1,061, or about 20%, of worker fatalities in private industry occurred in construction.
In 2017, more than a third of US construction fatalities (366 out of 971 total fatalities) were the result of falls;
in the UK, half of the average 36 fatalities per annum over a five-year period to 2021 were attributed to falls from height.
Proper safety equipment such as harnesses, hard hats and guardrails and procedures such as securing ladders and inspecting scaffolding can curtail the risk of occupational injuries in the construction industry.
Other major causes of fatalities in the construction industry include electrocution, transportation accidents, and trench cave-ins.
Other safety risks for workers in construction include hearing loss due to high noise exposure, musculoskeletal injury, chemical exposure, and high levels of stress.
Besides that, the high turnover of workers in construction industry imposes a huge challenge of accomplishing the restructuring of work practices in individual workplaces or with individual workers. Construction has been identified by the National Institute for Occupational Safety and Health (NIOSH) as a priority industry sector in the National Occupational Research Agenda (NORA) to identify and provide intervention strategies regarding occupational health and safety issues.
Sustainability
Sustainability is an aspect of “green building", defined by the United States Environmental Protection Agency (EPA) as "the practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building's life-cycle from siting to design, construction, operation, maintenance, renovation and deconstruction."
See also
* Agile construction
*Building material
* Index of construction articles
* Outline of construction
* Real estate development
* Structural robustness
* Umarell
*
*
References and notes
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Construction,