The effects of the late 2000s global financial crisis on Australia’s construction demand

Heng Jiang; Xiao-Hua Jin; Chunlu Liu

doi:10.5130/AJCEB.v13i3.3602

Vol 13, No 3 (2013): AJCEB Incorporating Special Issue on OH&S

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Published: Sep 18, 2013

DOI: https://doi.org/10.5130/AJCEB.v13i3.3602

Keywords:

Vector error correction, intervention analysis, construction demand, the global financial crisis

Heng Jiang

Deakin University

Xiao-Hua Jin

University of Western Sydney

Chunlu Liu

Deakin University

Abstract

An accurate measurement of the impacts of external shocks on construction demand will enable construction industry policymakers and developers to make allowances for future occurrences and advance the construction industry in a sustainable manner. This paper aims to measurethe dynamic effects of the late 2000s global financial crisis on the level of demand in the Australian construction industry. The vector error correction (VEC) model with intervention indicators is employed to estimate the external impact from the crisis on a macro-level construction economic indicator, namely construction demand. The methodology comprises six main stages to produce appropriate VEC models that describe the characteristics of the underlying process. Research findings suggestthat overall residential and non-residential construction demand were affected significantly by the recent crisis and seasonality. Non-residentialconstruction demand was disrupted more than residential construction demand at the crisis onset. The residential constructionindustry is more reactive and is able to recover faster following the crisis in comparison with the non-residential industry. The VEC model with intervention indicators developed in this study can be used as an experiment for an advanced econometric method. This can be used to analyse the effects of special eventsand factors not only on construction but also on other industries.

How to Cite

Jiang, H., Jin, X.-H., & Liu, C. (2013). The effects of the late 2000s global financial crisis on Australia’s construction demand. Construction Economics and Building, 13(3), 65-79. https://doi.org/10.5130/AJCEB.v13i3.3602

Issue

Vol 13 No 3 (2013): AJCEB Incorporating Special Issue on OH&S

Section

Articles (Peer reviewed)

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Author Biographies

Heng Jiang, Deakin University

Xiao-Hua Jin, University of Western Sydney

Chunlu Liu, Deakin University

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Heng Jiang, Deakin University

Xiao-Hua Jin, University of Western Sydney

Chunlu Liu, Deakin University

References