The Regional Pattern of Construction in the Globe - Coursework Example

Introduction Engineering and Construction The paper is going to talk about the regional pattern of construction in the globe. The factors that will keep construction growing, and where the funds will come from. Discussion of major players will be looked at in a broad way. The paper on the other hand, is going to tackle the roles of various governments of ASEAN (Association of South East Asian Nation), and public-private partnership On the other hand, the paper is going to talk about the strategy most companies use to diversify their business in different sectors and markets. By looking into all these, we are going to realize that. Most companies use different strategies to achieve their set goals in their annual planning, and get to know their style of construction. At the same time, the paper is going to talk about the analysis of the total volume of international construction, and comment about the trend in the Less Developed Countries, Advanced Industrialized Countries, and Newly Industrialized Countries. However, we are to compare and contrast the 2011-2012 market share, and try to analyze the major trends. Factors that affect the trends of construction companies to achieve their set goals are also going to be discussed in broad. At the end, we are going to realize how public and private companies have different strategies that helps them achieve their set goals in the global market share. Regional pattern of construction business In comparing the past decade international contractor revenue, for large construction market showed a surprising strength in 2011. This was after 2009 and 2010 being flat. The revenue for international contractors grew drastically. However, large companies that are working in the international market are giving out an alarm about what the future holds. In engineering news record shows that, there is strength in the international market. This is seen in the results of 2011 top 225 international contractors list. Top 225 companies in the international contractors list revealed that there is an upward shift in revenue collection in 2011 from projects outside their home countries. There was an increase of approximately 18% from 2010. The increase was occasioned by a rise in demand from the stagnant market over the past three years. The combined revenue that was collected in 2008 was approximately $ 382 billion. Amid stagnant markets in Europe, large international contractors are scrambling for work. Most contractors find their opportunities or funds from other regions, while others hold their own in the depressed market. This in essence helps more international companies to sustain their individual market share while allowing themselves to develop in certain ways. With the growing number of contractors, finding help or success in the new global spots helps in explaining why the engineering news record has decided to increase or expand its list of to international contractors from 225 to 250. This shows the demand in the global construction market. This was occasioned by the swelling number of contractors in the international market place. The ENR increased the list of the international contractors list basing on total worldwide contracting revenue, this was regardless of the project location in the market sector and project allocation. Most countries in Europe are restructuring their strategies. For example, Balfour is combining their design and management skills of its U.S. based parsons Brinckerhoff subsidiary with its existing investment, construction and operations to offer prolonged services. Balfour Beaty is selling its rail engineering business in the European countries for them to get enough funds to boost their local and international business. However, one company in France known as Bouygues Construction is developing its skill and business for a longer period of time in the construction sector. They have a unique strategy to enter into the market to boost their business. They use their presence on a public-private partnership to gain access to the Unite State market.These also attract a larger number of European based firms. This was occasioned by the fact that U.S. has a stable resource driven market where there are many opportunities for their market share to gain strength. Constructed in local contracting giants such as India and Toubro, will continue to grow. This is due to infrastructure deficits and the pressure by the government to deliver. India faces a backlog with a lack of skilled labor, this in essence has forced contractors to develop more automated processes to increase productivity. East Asia will at all cost remain one of the construction powerhouses. This is due to the fact that, China and India will continue to top as the most powerful and important construction markets. This is driven by the force of urbanization and infrastructure growth. China is anticipated to grow quickly in the face of lack of infrastructure faced by such countries, and government policy to deliver. In Hong Kong, the infrastructure market remains fantastic, the upcoming metro work attracts more construction companies such as VINCI civil-engineering subsidiaries. The firms have long term contracts such that they are relatively centered because it is the major construction company that produces quality work in the international construction sector. Hence, they collect good revenue at the end. Diversification of business sectors and markets The European market is working tremendously through a prolonged stagnation. Most European contractors are restructuring their strategies. For example, Balfour Beatty is combining the design and management skills with the capability of its existing investment, construction and operations units to offer full life-cycle. Balfour Beatty on the other hand is selling its rail engineering business in European countries where it has no other business. Their success has been seen in engaging in more than one sector. Vinci is another construction company that major their work on the road, bridge and tunnel. They work on the Ohio East End crossing public-private partnership between Kentucky and Indiana. This is one of the longest project, it has and it has put them in the limelight in the construction sector. Bouygues Construction on the other hand, is a construction company that has developed skills and business over the longest possible value chain. This is to boost their local and international business. It has a margin of $515 in real estate development contract in Miami. This has strengthened them on high value added projects. As mentioned earlier, it uses its public-private partnership for Miami Port tunnel projects to get entry to the U.S market. It attracts most of the European construction companies. Most European firms are finding renewed activity in the Middle East and North Africa (MENA). Many companies in the middle east are finding their way back to the market. Such as Dubai. There are regional opportunities, particularly in rail and metros. The market on the other hand is quite competitive. The volume of international construction in LDC, NIC, and AIC. Most European construction companies find their success abroad amidst stiff competition from local and international construction companies. One of the firms in Brazil is benefiting from its home country market. They also find their success abroad. Such as Latin America, mainly in Colombia and Peru, and partly in Africa. The government agencies in Brazil help the government contractors to expand being that it is considered a newly industrialized country. In western Europe, the demand remains strong in advanced developed countries. French demand in the Paris region remains strong, but on the other side is weaker in the provinces. Most firms win major contracts within the provinces and in other areas. Nevertheless, even for general contractors with the presence of U.K. conditions are not that pleasing where there is a significant reduction in large infrastructure. The Balfour Beatty U.K. market has reduced by approximately 20% over the last few years. The government requires to shift more effort on the local market to boost infrastructure. In construction, China Railway Group, which majors its construction in general building and manufacturing standing at the top of global contractors. This is because of the reality that they have a larger number of contractors in the international region. On the other hand, they face challenges in the local sector. Karlstrom says, if the Chinese want to enter the European market, they have to buy a local player. In Russia, Vinci is already working on the controversial motorway project, and they are targeting more civil. In North African, there is the political unrest specifically in Egypt, this has caused a pause in many major projects. The current political unrest in Egypt has delayed the implementation of mega infrastructure development projects. Another country with political unrest in Libya, most contractors tend to believe that the situation in Libya is beginning to return to the market. Comparing the past decade international contractor revenue, most countries in Europe, Asia, Middle East, Australia, and Canada have a tremendous increase in revenue collection annually. With Asia and Australia have 27% increase over the last decades. They are at the same time increased their new contracts in different countries over the decades. However, Chinese contractors, not only did they just supply laborers, but they are growing and are becoming a presence in the international market. In 2012, the Chinese group of companies completed work worth $16 billion in overseas. This was an increase of 12% from 2011. This was a report given by the Chinese International Contractors Association. The increase indicates a growing foreign market for Chinese construction companies. The increase is projected in the expansion of markets in African countries. This showed an increase for Chinese contractors rise from 40% to $64 billion in the year 2012. This was due to the increase to the African market from Nigeria where the project yielded $10 billion. In the same year, new contract awarded to Asia fell to 6%, this was due to stagnant economic recovery in the region. For example, in India new projects fell by $10billion due to the countys economic uncertainty. Asia and Australia are still the best in the globe when it comes to getting new construction contracts. In 2012 they achieved 24%, around $1580 billion. There was an increase in the international region as compared to the previous years. The trend of 2011 and 2012 market share Despite some upheaval in the global market, the global construction market showed some good performance for large contractors in 2011.. After showing some bad results in 2009 and 2010, most revenue for most countries grew the previous years. Despite of all this, big contractors show some caution about what the future holds in the market share. The power of international market in the year 2011 can be revealed in the results of Engineering News Record. The results show that, the top 225 contractors generated approximately $453 billion in 2011 revenue from projects outside their countries. There was a significant fight among the top 225 in the previous years. Most significant ACS effective takeover of Hochtief AG, despite its resistance, ACS achieved a majority of the ownership during that year. Particularly in spring 2011. ACS acquired majority of the shares. This enabled the Hochtief to settle down to be controlled by ACS. ACS was relatively a passive shareholder.. Since the acquisition of the majority of the shares, there has been a much focus on infrastructure, majorly on urban development and energy. Due to high demand of development in many countries across the globe, and high competition of revenue acquisition in every year, there is need to venture in different countries for them to be in the top list of market shares. The market share has tremendously increased averagely by 25% over the past few years. This is due to the fact most, most construction companies are engaged and diversify their potential in the market. Reference Atallah, P. W. (2006). Building a successful construction company. Chicago: Kaplan AEC Education. Read More