CE168P / A1

Principles of Construction
Management
ECONOMIC IMPORTANCE, NATURE
& CHARACTERISTICS OF
CONSTRUCTION INDUSTRY

The Economic Importance of the

Construction Industry

The construction is a vital and fundamental

sector of the economy and an essential
contributor to a nation’s wealth and progress
First, it provides the basic physical,
industrial, commercial, and social
infrastructure facilities necessary for
the development and growth of other
equally important major economic
sectors, such as agriculture,
manufacturing, and services.
Second, the successful implementation
of infrastructure programs heavily
depends on the existence of an effective
and resourceful construction industry.
Third, since most, if not all, of capital
investment projects entail construction
works, the industry is “generally the
source of more than half of a nation’s
wealth in terms of fixed assets so that
poor time and cost performance
inevitably reverberates throughout the
economy” (ILO, 1982).
Fourth, the industry provides the means by
which human society’s basic needs are met,
and living conditions are improved.
Construction work brings about increases
in the activities of the manufacturing
sector for the necessary inputs such as
building materials and equipment
(backward linkages) (CIAP 1992).
 The industry’s outputs, which consist of
the facilities and infrastructure built, make it
possible for sectors such as agriculture,
manufacturing, real estate, tourism,
transportation, and communication, among
other sectors in need of construction
services, to produce and deliver the goods
and services required of them (forward
linkages) and provide the stimulus for other
business activities (multiplier effect) (CIAP,
p.2).
 Last but not the least, the
construction industry, in countries
where contractors are venturing into
the overseas construction market,
also account for a considerable
portion of export services and
foreign exchange generation.
The nature and characteristics of
the construction industry
Construction is a very complex
industry, involving a multitude of
materials and skills (ILO, p. 3, 1992).
Because of its complex nature, it has
unique characteristics which
distinguish the sector from other
industries like manufacturing.
 The basic difference between
construction and manufacturing lies in
the nature of their outputs. While
manufacturing outputs are characterized
as goods or products which are sold to
the consuming public, construction
output is more in the nature of services
rendered to individual project owners
In addition, manufactured products
or goods are mobile and/or
transportable objects.
Constructed structures, on the other hand,
are fixed and immovable. Immobility is a
unique feature of the final outputs in
construction, a characteristic which
distinguishes them from even large capital
goods such as ships and airplanes which
share some of their attributes (Chow Kok
Fong, p.5).
 Ownership of output is also an
underlying distinction. In manufacturing,
ownership of the thing produced remains
with the manufacturer until such is brought
by a consumer.
References:
Fryer, Barry, Fryer, Marilyn, et. al. The Practice of
Construction Management, Balackwell Pub. 2004

Gould, Frederick E. Construction Project Management.

Prentice Hall. 2002.

Levy, Sidney M. Project Management in Construction.

Prentice Hall. 2000.

Nunnaly, S. W. Construction Methods and Management.

Prentice-Hall. 2001.
 References:
 Oberlender, Garold P.Project Management for
Engineering, McGraw-Hill. 1993.


 Sarausad, Fidel R. Construction Project

Management User’s Manual. 2004

 Schexnayder, Clifford J. Construction Management

Fundamental. McGraw-Hill. 2004.

 Tiongson, Alicia, et. al., NCPDP – Construction

Management Handbook,”Introduction to
Construction Industry”. First Edition. Construction
Manpower Development Foundation, Inc. 1998
Thank you!
CONSTRUCTION INDUSTRY
CONTRIBUTION TO THE
ECONOMY
 Construction industry’s Economic
Contribution
1. National Economic and Development Agency states
that employment levels in the construction industry
rose by 2.6% in April 2004 with a total of 1.79 million
workers, generating about 46,000 more jobs as housing
construction increased. This only shows that the
industry is creating jobs for the growing population.
Also, the construction of ports and airports. This only
means that the expansion and development is going to
the country side, thus creation of more jobs at the
provinces.
2. With the boom of the Construction Industry
and its performance during the first quarter of
2004 and has been cited as “the strongest since
2001”. This is fueled by strong economic
growth particularly in the real Gross Domestic
Product, remarkable performance of the
agricultural sector, continuing strength of the
service sector, and expansion in the
construction industry sector.
3. Research and development of certain
processes is also a good influence by the
construction industry. This area is the
platform for the continuing development
of a country. A lot of engineers, not only
in the academe, contribute in this area
and gaining a lot of awards abroad. This
only shows that we are upgrading our
technology thus giving economic boost
to the country.
Some of the economic contributions of the
construction industry to the economy are:
The construction industry is a major
source of jobs. The industry provides
employment from the labor force up to
the professional levels like technical and
non-technical personnel.
Investment in the construction industry
sustains economic growth by
contributing to the national gross
domestic product.
Construction is a major purchaser of
manufactured products, construction
materials and supplies, and
construction machinery
Construction industry’s Social
Contribution to the Economy

Creation of jobs, the way of living is

alleviated for most of the people who are
working in the industry.
The construction industry provides trainings
and human resource development which
addresses the requirements of the workforce
at all levels within the industry.
Direct taxes generated from construction
transactions and employment generated.
Increase in domestic and foreign trades that
would translate to income generation.
Thank you!
CONSTRUCTION INDUSTRY SERVICES
Construction is the act, process, or manner of
building, constructing, or forming something
which requires the application of special
engineering and/or architectural knowledge
and skills and involving the use of specialized
building trades or crafts. This definition is
broad enough to cover a wide range of
services including professional services,
specialist work and various trades and
activities.
Thus, the scope of the industry’s services
includes the following:
Preliminary studies – Conduct of pre-
feasibilility/feasibility or preliminary
engineering studies to determine technical
viability of the project and its conformity
to land use and zoning guidelines
prescribed by law.
Detailed engineering – Conduct of surveys
(all necessary field surveys which may include
aerial, hydrographic, topographic, sub-surface,
monumenting and other surveys); conduct of
investigations (site, foundation, soils and
materials); preparation of design
(architectural, structural, electrical, and
mechanical designs and design standards);
preparation of plans, specifications, and
drawings; quantity and cost estimating;
programs or work preparation; and preparation
of bid/tender documents.
Actual construction – Execution of all on-site
work for construction projects from land
clearance through completion, including
erection of the structure/facility, extensions,
expansions, alterations, repairs, maintenance
and retrofitting, rehabilitation, and/or
improvements thereon; services also include
the assembly, fabrication, and installation of
project components and/or equipment as well
as the demolition or dismantling of an existing
structure
Management – Project and
construction planning, organizing,
supervising, directing, and controlling
from the design to completion of
construction; includes contract
administration.
Consultancy – Advisory and other
professional services for special or
highly technical aspects of a project;
these services may be required at the
preliminary or design stages of a
project up to its completion.
The Different Classification/Types of the Construction
Industry Services

Classification/Types of Construction

In general, the nature of construction is complex arises

from the large volume and variety of specialist work,
building trades and activities. Basically, however, these
complexities spring from the type of project to be
undertaken. While construction may be classified in
different ways (e.g., services, work items or activities,
trades, etc.), the most common classification system is
based on project types. Following is a general breakdown
of construction based on “fairly conventional usage”
(Edgar Lion, 1980).
BUILDING CONSTRUCTION

* Residential

* Commercial

* Industrial

* Institutional
HEAVY CONSTRUCTION

* Transportation
* Power Units
* Resource Management
* Utilities
* Special Projects
The major classifications above can
be further be broken down into sub-
classifications to give the students or
the reader a better perspective. The
subclasses are as follows:
BUILDING CONSTRUCTION

Individual Units

* Detached
* Semi-detached
* Duplex
* Triplex
* Rowhouse
* Townhouse
Multiple Units

Apartments
Low-rise
High-rise
Condominiums
Commercial Construction

Single Storey

* Stores
* Showrooms
* Offices
* Theaters
Low-Rise

*Restaurants
* Recreational
* Hotels and Motels
* Service Stations
High-Rise

* Shopping Centers
* Malls/Arcades
* Service Centers
* Department Stores
* Combination of any of the
above
Industrial Construction
Single Storey

* Manufacturing
* Light
* Heavy
* Warehouse
Multi-Storey/Loft Building

* Low-rise
* High-rise
Institutional Construction

* School
* Hospitals
* Religious Institutions
* Penal Institutions
* Special Government
Buildings
HEAVY CONSTRUCTION
Transportation
* Marine (Ports/Harbors)
* Railroads
* Airport
* Monorails
* Roads
* Tunnels
* Bridges (overpasses/
Underpasses/flyovers)
* Conveyors
* Vertical (elevators/escalators)
Power

* Hydroelectric
* Geothermal
* Thermal
* Solar
* Nuclear (fision/fusion)
* Wind
* Biomass Pyrolysis
* Tidal
Resource Management

* Mining/Metallurgy
* Land Reclamation
* Petrochemicals
* Forestry
* Natural Gas
* Fisheries
* Irrigation
Utilities
Urban
* Water
* Sewer
Rural

* Gas
* Electricity
* Communication
Special Projects

* Sports Complexes
* Towers
* Other unclassified projects
Construction and construction-related
services may also be subdivided into
“subtrades” or work specialization. The
following classification of building trade
contractors/subcontractors including
manufacturers depicts the diversity of
construction work activities in building
construction alone.
Subtrades Connected with Building
Site Preparation and Foundations

* Demolition
* Foundation and Piling
* Excavation
* Pressure grouting
* Utilities
* Landscaping
Subtrades Connected with Structural
Components of Buildings
* Formworks
* Slipform Contractors
* Reinforcing steel Fabrication
* Pneumatic Concrete Contractors
* Concrete placing
* Lift Slab Contractors
* Cement finishing
* Concrete and Steel Testing
Laboratories
 * Structural Steel Fabrication
* Laminated Wood Contractors
Erection Contractors
* Prestressing
* Steel Deck Contractors
* Precast Concreting
* Asbestos Deck Contractors
* Other specialization
Subtrades Connected with
Architectural Building Components

* Masonry
* Storefront and Glazing
* Carpentry
* Overhead and Vertical Lift Doors
Contractors
* Ornamental Concreting
* Rolling Door and Grill Contractors
* Curtain Wall Contractors
* Sliding Door Contractors
* Metal Siding
* Flexible Door Contractors
* Asbestos Siding
* Awning Contractors
* Cut Stone and Granite Cutters
* Sign Contractors
* Artificial Stone Fabricators
* Window Washing Equipment
Contractors
* Roofing & Sheet Metal
Contractors
* Soundproofing
* Skylight Manufacturers
* Fireproofing
* Waterproofing and Dampproofing
* Miscellaneous & Ornamental Metals
Contractors
* Wire Mesh Partition Manufact.
* Toilet Stall and Lockers Manufacturers
* Caulking & Weatherstripping
* Folding Door & Partition Manufacturers
* Insulation
* Prefabricated partition Manufacturers
* Metal Window Manufacturers
* Millwork Manufacturers
* Metal Door & Frame Manufact.
* Hardware Manufacturers
* Vault Door Manufacturers
* Specialty Items Contractors
Subtrades Connected with Architectural
Finishes in Buildings
* Plaster and Drywall Contractors
* Wood Floor Layers
* Painting and Decorating
* Acoustic Tile and Ceiling
Contractors
* Plastic Finish Applicators
* Carpet Layers
* Tileworks
* Blinds and Drapes Installers
* Mastic Flooring Contractors
* Sculptors and Artists
Subtrades Connected with Mechanical and
Electrical Building Systems
* Plumbing and Heating
* Airconditioning and Ventilation
* Refrigeration
* Sprinkler and Fire Protection
* Electrical Contractors
* Chimney and Incinerator Contractors
* Garbage Compactor Manufacturers
* Lawn Sprinkler System Contractors
* Security and Alarm System
Contractors
* Swimming Pool Contractors
* Lightning Protection
* Music and Public Address System
* Cathodic Protection System
Contractors
* Kitchen Equipment Manufacturers
* Laundry Equipment Manufacturers
* Laboratory Equipment
Manufacturers
* Restaurant/Cafeteria Equipment
Manufacturers
Subtrades Connected with Vertical
Transportation in Buildings

* Elevator Contractors
* Automobile Lift Contractors
* Escalator Contractors
* Moving Ramps/Sidewalk
Contractors
In general, the proliferation of subtrades in
construction is due to the present-day
practice of subcontracting the bulk of
construction work to specialty contractors
and manufacturers.
Because of demand fluctuations and the
uncertainties and risk involved in the construction
business, most general contractors today find it
practical and economical to hire subcontractors or
“specialists” to do portions of the work rather than
undertake construction of the entire project with
their own work forces and resources.
 In effect, the functions of a
majority of general contractors in the
construction industry are primarily the
coordination and control of actual
construction as well as contract
administration. Recognizing this
peculiarity of the industry, the
classification system for contractors in
the Philippines is based on both
project types and subtrades.
General contractors are classified into
general engineering (GE) and general
building (GB) contractors.
Subclassifications under GE and GB
are based on projects types. Specialty
contractors fall under the third
classification and subclassifications
are based on the various construction
trades.
 The Philippines Contractors and
Accreditation Board (PCAB) applies
two systems of classification which are
being gradually integrated such that the
differences between the two are now
very few. To illustrate, the following
enumeration merges the various
classification under the PCAB licensing
system and the registration and
classification system for Government
contractors.
General Engineering Construction

Road, highway, pavement and bridge – all

types of roads, railways, airport runways and
other horizontal structures, bridges, viaducts,
interchanges and similar structures.
Irrigation and flood control – all types of
irrigation systems, canal structures, river
control including dikes and revetments,
drainage systems, pumping stations and
related structures.
Dam, reservoir, and tunneling – all types of
storage diversion dams, tunnels, hydro-electric
plants and other related structures.

Port, harbor and offshore engineering – all piers,

wharves, causeways and related structures; harbor
dredging, reclamation, rockworks and similar
structures.

Water supply – all wells, developed springs and

other source development works, distribution
system and other related structures.
General Building Construction
Building and Industrial Plant – all
buildings including schools, hospitals,
airport terminals, post offices, markets,
houses, multi-storey buildings; air traffic
control facilities; thermal and geothermal
plants and related structures; power
transmission and distribution poles,
towers, sub-stations and other related
structures.
Sewerage and sewage treatment plant –
sewerage systems, treatment and disposal
plants and similar structures.
Water treatment plant and system –
water pumping stations, elevated water
tanks, filtration plants, and related
structures.
Park, playground, and recreational
work – parks, playgrounds, landscaping,
monuments, and similar work/structures.
Specialty Construction
Foundation work – includes
excavation, compaction, lean concrete
work, and footings; mainly involves
work on any part of a structure that
serves to transmit the load to the earth or
rock, usually below ground level.
Structural steel work – fabrication
and/or erection of load-bearing structural
steel members or elements such as
columns, beams, angles, bars, plates,
sheets, strips, etc.
Concrete precasting ans prestressing –
includes the casting, curing, and
tensioning of tendons of concrete
members of a structure at a place or site
other than their final position.
Plumbing and sanitary work – water
supply and sewerage system equipment
installation for pumping, filtration and
treatment plant; water supply distribution
system.
Electrical work – all electrical
installations; electro-mechanical works
for power generating plants; high voltage
lines and sub-station equipment
installation.
Mechanical work – all mechanical
installation; electro-mechanical works for
power generating plants.
Air conditioning and refrigeration work –
including ventilation
Elevator and escalator work – including
conveyors
Fire protection work – includes the
installation of sprinklers and other automatic
fire extinguishing system, heat and/or smoke
detectors and other fire alarm devices or
warning systems; also covers fire-proofing or
the application of fire-resisting materials to
structural elements or systems.

Waterproofing work – includes the

application of materials, usually a membrane
or applied compound to make a surface or
structure impervious to water.
Painting work – includes covering
of the exterior and interior parts of
a structure with a protective and/or
decorative coating.

Well drilling work – wells,

developed springs, and other
source development works
Navigation equipment and instrument
installation – installation of very high
frequency/omnirange distance measuring
equipment, non-directional beams, radio
detector and ranging (radar) instrument
landing systems

Communication equipment and

instrument installation – installation of
landlines, cables, and other communication
equipment and instruments.
The above classification system may be
revised by the PCAB as necessary to
respond to the needs of the industry and
changing conditions in the market. The
non-inclusion of several subtrades in
construction is due to certain exemptions in
the law governing the licensing of
contractors which exclude them from
PCAB regulation.
References:
Fryer, Barry, Fryer, Marilyn, et. al. The Practice of
Construction Management, Balackwell Pub. 2004

Gould, Frederick E. Construction Project

Management. Prentice Hall. 2002.

Levy, Sidney M. Project Management in

Construction. Prentice Hall. 2000.

Nunnaly, S. W. Construction Methods and

Management. Prentice-Hall. 2001.
References:
Oberlender, Garold P.Project Management for
Engineering, McGraw-Hill. 1993.

Sarausad, Fidel R. Construction Project

Management User’s Manual. 2004

Schexnayder, Clifford J. Construction Management

Fundamental. McGraw-Hill. 2004.

Tiongson, Alicia, et. al., NCPDP – Construction

Management Handbook,”Introduction to
Construction Industry”. First Edition. Construction
Manpower Development Foundation, Inc. 1998
Thank you very much!