Jiang, H; Jin, X H and Liu, C (2013) The effects of the late 2000s global financial crisis on Australia's construction demand. Construction Economics and Building, 13(3), pp. 65-79. ISSN 2204-9029
Abstract
An accurate measurement of the impacts of external shocks on construction demand will enable construction industry policymakers and developers to make allowances for future occurrences and advance the construction industry in a sustainable manner. This paper aims to measurethe dynamic effects of the late 2000s global financial crisis on the level of demand in the Australian construction industry. The vector error correction (VEC) model with intervention indicators is employed to estimate the external impact from the crisis on a macro-level construction economic indicator, namely construction demand. The methodology comprises six main stages to produce appropriate VEC models that describe the characteristics of the underlying process. Research findings suggestthat overall residential and non-residential construction demand were affected significantly by the recent crisis and seasonality. Non-residentialconstruction demand was disrupted more than residential construction demand at the crisis onset. The residential constructionindustry is more reactive and is able to recover faster following the crisis in comparison with the non-residential industry. The VEC model with intervention indicators developed in this study can be used as an experiment for an advanced econometric method. This can be used to analyse the effects of special eventsand factors not only on construction but also on other industries.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction demand; intervention analysis; the global financial crisis; vector error correction |
| Index terms: | construction economics, global financial crisis, methodology, construction demand, residential construction, econometric, construction industry, intervention analysis, estimate, experiment, Australia |
| Subjects: | financial analysis, economic analysis, financial and cost management, industry analysis, data analysis and analytics, market analysis, Geography, economic concepts, construction integration, research methods, data collection methods |
| Topics: | International Construction, Geographical Context, Research Practice, Cost Management, Business Strategy |
| Descriptive scope: | 5 PCTEA |
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