CMA653: CONSTRUCTION ECONOMIC

About This Course

Students will learn both the fundamentals and in-depth concepts of economics for the built environment in this course. It teaches students to comprehend the contributions and effects that the construction industry has on the national economy, as well as government policies intended to address the macro- and microeconomic issues at the local, as well as the national, levels of government. Economic consideration and building design economic elements will be taught to students. Key financial statements, management of profitability and liquidity for the survival of businesses, the significance of ratio measures, and cost analysis for decision-making will also be covered. A variety of economic forces that influence business behaviour in the built environment will also be discussed.

Topics In This Course

1. Introduction to Principles of Economics

1.1) The construction industry and the economy

1.2) Overview of the Malaysian Construction Industry (i.e. issues of GDP and construction; common economic goals/ macroeconomic objectives: price stability, full employment, economic growth, balance of trade, protection of environment)

1.3) Productivity in the construction industry

1.4) Innovation in the construction industry

1.5) Circular Economy in the Construction Industry

1.6) Overseas construction opportunities for domestic firm

2. National and Local Government Economic Policy and the Built Environment

2.1) The economy’s cyclical growth path and construction cycles

2.2) Demand management in the economy by means of fiscal, monetary and direct policies; and the limitations of these policies to property markets

2.3) The multiplier process

3. Economics Factors of Building Design

3.1) Economics factors affecting design

3.2) Approximate Estimating

3.3) Cost planning and cost control during design stage

3.4) Elemental Cost Analysis and Cost Plan

4. Economic Assessments / Investment Appraisal

4.1) Interest-time relationships (compound amounts, present worth, compound amount of a uniform series, sinking fund deposit, present worth of uniform series and capital recovery)

4.2) Conventional techniques of investment appraisal (the pay–back method and the average rate of return methods)

4.3) Discounting techniques of investment appraisal (the net present value technique, the internal rate of return /DCF Yield, earning rate and incremental rate of return)

4.4) The effect of inflation

4.5) Sensitivity Analysis

5. Cost Analysis for Decision-making

5.1) Fixed, variable and mixed cost

5.2) Break-even cost analysis

6. Financial Analysis

6.1) Sources of Finance

6.2) Hedging Principles

6.3) Financial Statements (Balance Sheet, Profit and Loss Account, Fund Flow Statement)

6.4) Ratio Measures (Liquidity Ratio, Asset Management Ratio, Debt Management Ratio and Profitability Ratio)