Reviewing the Impact of the Macroeconomic Components on the Performance of the Construction Industry

Abstract

The construction industry is a crucial part of economic development, and its performance dynamics are influenced by macroeconomic variables such as GDP, interest rates, inflation trends, and government policies. The industry's health is closely linked to a healthy economy, and the performance of domestic and foreign economies always affects expansion or contraction in construction projects. Higher interest rates can increase financing costs, reducing construction activities, but historically, rising consumer prices have led to increased material and labour costs and longer project timelines. The government's role is also highlighted, as policy changes can propel or curtail industry development. The study also examines international economic trends, such as global trade and investment patterns, which impact the construction industry and contribute to transnational governance under the framework of globalization. To address these challenges, strong economic policies, optimized regulation, and a deeper understanding of the industry’s cyclical nature are essential. This analysis provides a broad perspective on the economic foundations of the construction industry, allowing decision-makers in business and policy to make more strategic choices.