Economy
In its broadest sense, an economy is an area of production, distribution and trade.
The state of the economy has a significant impact on the construction industry, both in terms of the demand for construction projects and the availability and price of products, materials and labour. The construction industry has also been used as a way of regulating the economy. During times of economic downturn and recession, governments tend to invest in construction projects in order to stimulate the economy, whilst during over expansion of the economy, governments reduce spending on construction to cool the economy. This leaves the construction industry in a state of boom and bust, continually expanding or downsizing in response to demand. This is very destabilising and makes long term investment difficult.
Guide to developing the programme business case, Better business cases: for better outcomes, published by HM Treasury in 2018, defines the word ‘economy’ as: ‘A measure of the extent to which the cost associated with a project, or policy is reduced.’
The term circular economy refers to the maximisation of total material resource efficiency in which everything is engineered to be constantly reused or recycled. For more information see: Circular economy.
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