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Introduction to Built Environment

Lecture 2 Summarized Note


Date: 30/9/2015
Topic: The Economic Impact of the Malaysian in the Construction Industry

1. Supply and demand for goods and services.


When the number of the construction projects in Malaysia increased, the
supply and demand for goods and services also increases. This induced the
growth of salary of the workers as there is more construction projects. As
salary rises, the spending ability of an individual also will improved. As a
result, the government tax for an individual also will be affected and this may
leads to the accretion in the income of the nation. In conclusion, the economy
of the nation improved.
2. Employment
The increased number of construction projects in Malaysia will required more
man power to ensure the projects run successfully. This allows the
employment rate of the nation increased as more human resources are
needed in construction sector. As employment increased, people will have
more money to spend for their daily basis. Food and beverage,
accommodation, transportation will be upgraded to meet the peoples
necessity. They are able to earn more profit from the businesses among the
individuals. The income of the nation increase as the amount of tax collected
rises. Therefore, economy of the nation improved.
3. Utilize raw materials
As the number of the construction works in Malaysia rises, the quantity of raw
materials needed in the construction works also increased. There will be more
machine needed to transport the raw material and more workers to operate.
Besides, the contractor will need more modal to operate their company. As a
result, the contractor will loan money from the bank and this will induce the
business of the bank.
4. Growth of financial sector and capital market
Bank exist is to loan money for business. As construction activities increased,
bank will have more business to deal with. The contractor will also purchase
insurance from the bank for their safety of the building. Furthermore, shares
of the company may also elevates as more dividen and bonus will be
received by the individual as there is more construction activities. The
economy of the nation will improved because more investors will be investing
in our countrys construction sector.
5. Malaysian construction projects abroad
As many Malaysian travel abroad for construction projects, they will be
bringing their salary abroad back to Malaysia. Their ability on spending in
property, daily basis, and transportation in Malaysia rises as the exchange

currency of foreign money is higher. There will be more foreign money flow
within the nation and Malaysia will be able to gain from the foreign exchange.
The income of the government will grow as the 30% of tax charged on the
individual increased.
6. Transportation
Construction workers need transportation to and fro the site and construction
companies need shipping machine to transport their material. To overcome
these, transportation business ( cargo, bus, train, airplane, ship, etc.) will
increase to support the need of the construction sector.
7. Manufacturing
As construction works increased, the manufacturing factory of materials,
supplies, and furniture increase their business.
8. Education
More construction projects are carried each year in Malaysia, more
professionals in this sector are required. Therefore, more student will be
intake for this sector to overcome the need of professionals. This leads to the
improvement of the food and beverage, accommodation and lecturers.
Besides, the facilities to hold the student also will build more, hence
generates the construction business.
9. Business infrastructure
The increase in transportation (highway road, airport) will rise the growth of
business. The improved transportation in the nation enable an individual to
travel more easily. More foreigners are willing to invest in our country. As
more investors coming into our country, the accommodation business
increase.
10.Tourism
As many foreigners travel to Malaysia, more currency exchange flows within
the nation. The income of the government rises when the business in food
and accommodation also elevates.
11.Technology transfer and knowledge
Technologies used in construction include satellite, GPS, prefabricated
materials and more. These technologies reduce the construction time and are
more environment friendlier. The construction activities will be more efficient,
the productivity will increase, and the wastage of materials from the
construction site will be reduced. Government may save money from these
and more profit will be gain from the construction works.

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