This include all type of building work, repairing and maintenance work. Nowadays, housing, building, and other construction brings convenient, shelf and working place for human. Since that, housing properties have the most stable value in the industrial. It is arguable that the construction industry, though the products that it creates, has a greater effect on the environment than any other industry. Therefore, it has a greater effect on the economic (Patricia, 1988). The very size of the construction industry means that it is of importance to the economy.

There are several ways in which the size of the industry can be measured and expressed through the pricing, material, Construction Company, GDP and any other factors that relate to construction. The Gross Domestic Product (GDP) of the construction industry can be seen to be formidable, even in the year of low output of construction (Patricia, 1988). According to Patricia M. Hillebrandt, the GDP of construction industry in 1981 is twelve times that of the ship-building and marine engineering industry and over twelve the size of the food, drink and tobacco industries.

The construction industry narrowly defined has two and a half times the value of the output of agriculture, forestry and fishing. The Treasury has forecast 2. 75 – 3. 25% growths in GDP this year. The pattern of GDP growth is expected to be followed by increased demand for construction services. In 1999, GDP grew by 2. 1% Construction output excluding infrastructure (at constant prices) grew by 1. 1%, the lowest annual rate of growth for four years. However, the growth in new work output has been many sharpers.

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Construction Forecasting and Research predicts that total construction output will rise by 2. % this year and by 2. 1% in 2001. But new work activity, excluding infrastructure, is expected to rise just 1. 4% this year, with no further growth in 2001 (Davis Langdon & Everest, 2000). The requirements for building materials clearly are dependent on the levels and types of output of the industry. Therefore, the number of material being order or import can be determined the construction output. The material, which will be used to determine the construction output, is depend on what type of material that’s popular for construction (example, brick, and block work).

Materials for construction are produced mainly in Great Britain with the major exception of timber, most of which is imported. The manufacturers of construction materials, because of their great diversify, are found in a large number of industries, only some of which supply their output almost entirely to construction (Patricia, 1988) – for example, cement and concrete product, bricks and plasterboard. In the construction statistic annual 2000-edition, overall of the building material have increase in the year 1999.

The most common materials, concrete blocks and bricks, have an index based on 1995 of 114 compare to 1998 of 112. 2. While concrete roofing tile has an index of 125. 3 on 1999 compared with 114 on 1998. This can be indicates an increase in construction output. According to Davis Langdon ; Everest, over the past 12 months of October 2000, tender prices for most trades have risen steadily. Some have seen quite dramatic increases, such as 16% for formwork, 25% for plaster and 27% for concrete. For oil-based materials such as tarmacadam, asphalt and PVCu, already difficult conditions have been worsened by the recent petrol crisis.

The Construction Products Association has estimated that the UK fuel dispute in early September could have cost construction in the order of i??200m in lost output alone. The profitability of construction, materials and support service companies in the construction industry can also express the construction output in the industry. The Construction Confederation’s state of trade survey for the second quarter of 2000 revealed that 59% of building contractors had full or nearly full order books. Some are now declining invitations to submit competitive bids, preferring negotiation.

Most regions and major cities still report reasonable but not excessive workloads. London and Edinburgh are particularly busy. In Scotland, the South-east and the South-west, construction is seeing a mini-boom, with tender prices rising strongly (Davis Langdon & Everest). In the report from the Construction News, the overall material companies’ share prices has increase, this reflected the construction industrial has utilised the resource in increase construction output. Construction and support services companies’ share price also show an increase. This can be concluded that the construction output had been increase.

Conclusion, from the above three analysis, the construction output can be concluded as increase. While building material has a significant increase, the GDP on construction industry also play a large activity in the whole industrial and construction companies’ share price also increases. b) Explain why information on house construction output and house sales is used as an indicator of the state of the economy. The strength of the economic growth, and increase in both earnings and job creation, mean that demand for housing in those areas of the economy where this is the strongest is outstripping supply (THBF).

The housing market has a high profile. The number of people who have a direct stake in this market has grown from being simply a means of acquiring somewhere to live to being of great economic, social and political significance. Housing is no longer being enjoyed, but is seen as an area where money can be made and in which wealth is tied up. As governments have increasingly recognised homeowners as an interest group, the housing market has become politically significant. Housing market was shown that inelastic supply relative to demand is a significance characteristic of the market (Stephen D. Lavender, 1990).

The result of this is escalating prices in the face of increased demand. The planning system is simply failing to deliver enough new homes in relation to need. According to DETR figures, in the decade 1981-91, household growth in England averaged 190,000 per year, while the housing stock increased by 176,600 units per year. From 1991-96 this situation worsened, with household growth averaging 198,000 per year against stock increases averaging 151,600 per year, despite substantial fluctuations in property transactions and house prices, private starts fell 1% in England and 4%in the three southern regions where demand was strongest.

There is every reason to expect demand for housing to continue to grow. Already this has created problems in the South East, where house price inflation has repeatedly influenced the Bank of England’s interest rate policy. Employers will suffer wage cost effects and shortages. There is plenty of evidence from all across the South of England, in particular, of house prices and shortages restricting employers’ ability to attract labour. This will damage Britain’s competitiveness (THBF).

Therefore, construction output and house sale may affect the whole industrial especially for those people on low and moderate incomes are the ones who suffer the most as economic prosperity help to ratchet house prices out of their means. Conclusion, as we know that, house has the most stable value in the property. Therefore, investors are willing to pay to invest to earn money. As rapidly growth of construction output and house sale will lead to economic inflation. This will affect the whole industry to suffer economic problem and interest rate policy. Therefore, it could be as the indication of the state of economic.

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