Construction Economics And Finance Construction Essay

Construction Economics And Finance Construction Essay The economic downturn while unfortunate is real life problem that needs to be managed and controlled by construction companies. Construction is experiencing particular suffering as it relies on large capital expenditure to finance projects and the unavailability of a steady cash flow has resulted in many companies being forced into bankruptcy despite making a profit. Cash flow management has been described as the most important of all a companys resources as its inadequate management can lead to liquidity problems whereby day to day activities cannot be supported (Navon, 1996; Singh and Lakanathan, 1992). As contractors have to wait a number of months before being payed for completed work, this places increased pressure on credit facilities that they have agreed with banks, sub-contractors, suppliers, etc. This is why there is such agreement within the industry towards the importance of cash flow forecasting and control (Navon, 1990; Carr, 1993; Cook, 1991). The UK Governments policy has been to provide a fiscal stimulus by increasing spending on large public projects so as to inject money into the economy which will filter down through all sectors (McFall, 2008). Green (2009) forecasted that the recession will match up to the recession of the late 80s and early 90s but that it will recover quicker. Once again public spending is the underlining reason for the upturn but it is questioned whether the continuous spending can be sustained. The logical relation between high inflation which causes a rise in borrowing costs and a reduction in construction investment and thus a fall in the construction cycle is shown below in Figure 2.2 (Ren Lin 1996). These ups and downs in the economy in general used to be called business cycles but cycles implies predetermined or automatic recurrence and according to Myers (2008) we are not experiencing automatic recurrent cycles and we should refer to these activities as business fluctuations instead. Construction companies need to analyze these cyclical indicators so that they can plan activity and investment depending on the fluctuations. Whitten (2009) writing for Construction News explained how The Civil Engineering Contractors Association has warned of an emerging trend of firms pricing below cost. Both Whitten (2009) and Scully (2009) argue the point that below cost tendering is unsustainable and will increase the risk of contractors facing insolvency. Reductions in material and plant costs have been exceeded by the drop in tender prices. Insolvencies are predicted to occur firstly among contractors who tender correctly but fail to win the contract and then among those who win the contract with unsustainably low bids (Whitten, 2009). Cash flow management is extremely important and despite interest rates being at their lowest levels in a number of years borrowing is still a cause for concern as profit margins have been reduced and in some causes wiped out as contractors take on jobs at cost. Methods to improve the cash flow are described below at the different stages of a contract but in general firms need effective financial planning and control to monitor its position. Before a contract begins issues such as plant ownership, labour, subcontractors, materials, etc need to be discussed and the right mix found for each project. Better buying and terms for sub-contracts involve negotiating improved deals either from suppliers or sub-contractors and therefore improve the cost of the project (Coates, 2009). This is widespread in the current climate due to the reduced amount of work available. The last three methods will bring in early money but must be done before submitting the priced bills (Cooke and Williams, 2009). On site, the use of skilled labour increases efficiency and allows tasks to be completed earlier without the need for expensive and time consuming repair work. For complex tasks which the workforce could perform but not efficiently, specialist sub-contractors should be used. Plant costs can be extremely high which means that any plant that is not being used should be off-hired immediately and if any plant is owned by the company then there should be added emphasis on its use. Strategic tendering and project mix become even more crucial to a companys success during times of a recession. As the private sector feels the impact of a recession firstly and for a slightly longer period it is in a companys long term interest to carry out a more aggressive bidding policy towards the public sector (Ren Lin, 1996). Another advantage of the public sector is its transparency and openness during the tender stage. While the public sector may be susceptible to mal-practice, construction companies know that they will be impartially assessed and receive feedback. Strategic planning can be very beneficial as it seeks to align a company in a certain direction. In todays climate contractors need to evalute the client when deciding to tender as many contractors have commenced work on a project only to instructed to withdraw as the funding has been restricted (Edum-Fotwe McCaffer, 1999). A number of contractors have also begun to take on jobs at cost or even a loss in an effo rt to win work with the chance of repeat work. Also this keeps the company name in circulation and also to hold onto valued staff that might otherwise have to be made redundant. Partnering has been widely adopted in construction in the last number of years as it offers the opportunity for improving the project outcome aswell as benefiting the whole supply chain (Dozzi et al., 1996; Larson and Drexler, 1997). It utilizes each participants expertise and resources so that the required business objectives can be met or exceeded (Bennett Jayes, 1998). The use of sub contractors has increased as there is less overheads involved (Langford Male, 1992). The benefits of partnering can be applied to co-contracting (main contractor-sub contractor) and supply chain integration (contractor-supplier), (Edum-Fotwe McCaffer, 1999). This allows greater flexibility as both partners are working for a common goal and greater economies of scale can be achieved when tendering as contractors will have their own list of preferred suppliers or sub contractors which allows them to price new projects quickly and efficiently. As suppliers account for such a high percentage of building costs their involvement at an early stage should be welcomed as they can contribute new ideas, products or processes (Cartlidge, 2002). Tyreman on the other hand draws attention to the fact that the construction industry is inherently mis-trusting and while benefits do exist he doubts whether it will be fully supported within the construction industry. This opinion is similar to that of Wood and Ellis (2005) who estimate that it will still be some time before a fully genuine relationship exists as there is an engrained culture of mistrust and deception. Successful partnerships offer the opportunity for repeat work but the client must be assured that tenders remain competitive within the relationship of trust. As Project Programme Management provides training and technology advancement, it has allowed them to move into new markets which owing to the current high unemployment rate are particularly busy. They have also looked towards cheaper marketing tools such as over the internet to keep their overheads down while still keeping potential client exposure high. At Laing ORourke, Tyreman discusses how credit checks are performed on all potential clients to rate them but they also use strategic tendering which has led them to tender more aggressively for public sector contrasts which is in line with the theories put forward by Ren and Lin (1996) and discussed in the literature review. Supply chain integration has also helped to achieve greater economies of scale. The importance of cash flow cannot be overstated for construction firms and regardless of its time consuming requirements is particularly worthwhile. Despite many construction firms making a significant profit they can run out of cash and have to cease trading. If firms fail to correctly forecast when cash flow is required they can become insolvent as the cash is not available to pay their debts as they fall due. Effective communication will strengthen your existing relationships and help you to form positive bonds in future interactions with clients, banks, sub-contractors, suppliers, etc. The importance and basic need for cash flow analysis has been stressed in the literature review and by both interviewees. Cash flow analysis is an essential day to day activity in construction and it is recommended that effective planning is carried out by experienced management. They need to establish good terms with suppliers and sub contractors and to put in place an efficient cash flow reporting system. Cash flow analysis can refer to both day-to-day analysis (short term) or economic forecasting (long-term). As discussed by Myers (2008) business fluctuations have been occurring since the start of business and while they are complicated and rely on a number of variables they can help to provide a company with the potential to forecast market conditions and thus position itself accordingly.

Effectiveness Of The Articles of Confederation :: Free Essays

  Ã‚  Ã‚  Ã‚  Ã‚  The Articles of Confederation were incapable of providing the United States with an effective form of government. The Articles of Confederation presided weakly over the government as it allowed little or no power to tax, control trade, and branches of government were missing. In addition to this, the thirteen states acted as separate nations and the national government had little control over them.   Ã‚  Ã‚  Ã‚  Ã‚  As seen in Document C, Congress had so little money that it couldn’t afford to pay the army their bonuses. The army, of course, was discontented in this lack of action and thought they were being treated unjustly. The delay was so slow that the army did not think they were going to get paid. This, in itself, exhibits the great need for the national government to acquire the power to tax.   Ã‚  Ã‚  Ã‚  Ã‚  Document D openly shows the little power that the national government is in control of. In the document, the U.S. attempted to remove British troops off of U.S. soil and had quite a time trying to do so. The British had no respect for the U.S. government because of the little power it had, all of the power was in the hands of the states. The thirteen states acted like thirteen separate nations as they, for the most part, functioned as they pleased.   Ã‚  Ã‚  Ã‚  Ã‚  Document G reveals the discontent of the people in the ineffectiveness of their national government under the Articles of Confederation. John Jay (Secretary of Foreign Affairs and great international negotiator), expresses this discontent of the people through a letter of concern to George Washington. He foreshadowed some sort of revolt, crisis, or revolution and expressed his feeling of uneasiness and the need for change. Shay’s rebellion turned out to be a milestone because it set a need for a new national government, the revolt was against the government of Massachusetts.   Ã‚  Ã‚  Ã‚  Ã‚  The Articles of Confederation had both high and low points, but, the low greatly outweighed the high.

Framing Carpentry

Have you ever built anything with your hands? Maybe a birdhouse? What about a model car or plane? We’ve all built a gingerbread house before; haven’t we? Well, no matter who we are, or where we come from, most of us have built, or helped to build, something with our bare hands. The satisfaction a person gets from completing something with their bare hands is an amazing feeling. Now, have you ever built a house before? Yes, I mean an entire house. Starting from what is basically a pile of sticks. Most people haven’t. Being a framing can give a person satisfaction that is not easily found. But this is not a job for the weak. Being a carpenter may be one of the hardest and most dangerous jobs a person can do on a daily basis. Framing is a job that anybody should be proud to do. Not only does is take a great amount of physical and mental strength, but it takes an artist’s touch as well. Whether you rent a home, or own your own, somebody put their blood, sweat, and/or tears into building the place you call home. Blood may not be as common as sweat, and tears even less so, but with the amount of physical energy that it takes to build a home, yours took at least one of them; more likely two. I’ve been working as a framing carpenter for a quarter of my life, so I hope you take my word when I say it can be flat out exhausting. An August day spent at the lake can drain a man. That same August day on top of a roof can reach 130+ degrees, and will push even the fittest men to their physical limits. People might say, â€Å"I hit the gym every night, I could handle it. † Okay, put on a tool belt and give it a shot. But remember, that tool belt weighs about ten pounds. Now factor in repeatedly, and I mean hundreds of times a day, lifting anywhere from two to one hundred and twenty pounds; and don’t forget the heat. I’ve personally seen this drain a man’s energy so much that in just one moment of exhaustion, he buried a saw (mind you a power saw) in his left thigh almost four inches deep. There was blood and tears, and for a moment I feared for his life. Of course this isn’t as common as a shooting yourself with a nail gun, slicing yourself on a strap, or stepping on a nail, but it happens. These lapses in judgment happen on some small scale everyday so you must always be mentally aware. There is so much more to building a house than being able to work hard. As much, and sometimes more energy can be spent on the mental process that takes place. I asked you earlier if you’d ever built a house from a pile of sticks. Essentially, that is what takes place. Imagine your house being sent out on the back of a truck. And it’s not like a Lego house that is ready to put together. Critical steps must be taken from the moment you set that first nail. A mistake in that took five seconds to make could take days to fix. I know a guy who built a 5,000 square foot building too tall. I know a guy who built every window in the house six inches to small. I know a guy that cut over 5,000 dollars worth of logs the wrong length. Sure these were stupid and costly mistakes, but if you can show me one person that hasn’t made a dumb mistake at work, I can show you a thousand who have. Being physically exhausted keeps your thought processes from working properly. Your body will take care of its physical needs first, and if you don’t have enough left it will shut down mentally. I believe this has happened to most of us at some point; studying perhaps? Keeping your mind fresh is most crucial when you get to the roof. Making four different roof lines come together harmoniously can be very difficult. Calculating multiple angles for each roof to blend perfectly can be a headache for even math majors. But when all is said and done, you can look back at your own little masterpiece with pride. Can you really consider framing a house†¦.. a masterpiece? Absolutely! Here in St George, UT we have an annual event known as the Parade of Homes. This is where local construction companies show of the skills of their trades, and what I believe you could call their artists touch. Many of us attend this annual event, and gawp at the beauty within these homes. We look at the intrinsic details of a fireplace or ceiling, but do not take much time to think about the work it took to build these. It once took me a day and a half to build fireplace; with a helper. The details were absurd. It was something that should have been built with foam, not wood. Six different radiuses, some of which had moon sliced openings with waves protruding on every surface, and a light bar that followed the last one. Now, did I feel like an artist upon completion? You better believe I did; I felt like Picasso. It wasn’t easy to build this with a power saw and nail gun from only a pile of sticks. But it is precisely these types of projects that leave me with an overwhelming sense of pride. After all of the houses I’ve built I still take pride in my work. It feels good to drive through a neighborhood, and to remember each house I’ve built. There are memories that come to mind with every house. I can picture the first house that I built as a grunt, as well as the first I built as a foreman. I remember how good my first house as a foreman felt, and how I sat in my truck when we were finished, and felt the pride of doing it my way. It’s always a good feeling to accomplish something that you take pride in, and everybody needs that feeling. Whether it was a million dollar home, or a track home that took three days, it’s always felt good to finish a home and admire it. It’s great to know that it was through my knowledge, skills, and strength that I took a pile of sticks, and built a house. This is why I think framing is a job to be proud of.

The Cultural Background Of Greek Myths - 1858 Words

As Christopher Vogler quoted in The Writer’s Journey, â€Å"A myth... is a metaphor for a mystery beyond human comprehension. It is a comparison that helps us understand, by analogy, some aspect of our mysterious selves.† Various countries have myths that connect to their personal background culture. When it is compared, each myth has a different perspective of how things were created in the daily life of a person. This includes countries such as Greece and Egypt and how their backgrounds influences their cultures. Cultural backgrounds play an important role in society. One moral lesson that is learned in Greek myths is about mother and daughter relationships. Egyptians also included Ma’at in their myths as a symbol of harmony and peace.†¦show more content†¦Every day, women, slaves, and children were required to stay indoors, while men had freedom to go wherever they wanted. Women were responsible for household work and children were also required to st ay inside. Until the age of six, children were educated by their mother. Slaves were treated well at times and they did as they were asked by their owners. (Lin and Don Donn, â€Å"Greek Mythology for kids†). Many Greek men spent their time observing and studying the planets and how astronomy worked. This led to philosophers creating and studying mathematical proofs. Literature and religious beliefs expanded as well as a new intake of inventions. People often told stories orally since many were not educated of reading and writing. Many were undergoing different perspectives of the world and how they viewed it (Pecorino, â€Å"Greek_Culture†). Additionally, a Greek myth such as the story of Demeter and Persephone was well known. Demeter was a sister of Zeus, who grew and harvested crops. She loved her daughter, Persephone dearly. As she did, the crops would grow healthier. When Persephone grew into a beautiful goddess, Hades fell deeply in love with her. Hades was the g od of the Underworld. He decided to kidnap Persephone in his chariot and take her back to the underworld, where he locked her in a room. She refused to eat a single grain of food and in complete desperation,