The chosen organisation for assessment is EBERT Construction

INTRODUCTION: Construction industry is very dynamic since construction projects a

distinctive in nature and they keep on evolving. Construction projects offer high entry barriers
for the new players because they involve heavy investment, huge fixed cost, non-
transferable assets, non-tradability output. External factors are very important for such
capital-intensive projects and that is the reason construction industry is very vulnerable to its
external environment because of Information asymmetry and little availability of information.

PESTEL Framework is most suitable for analysis of external environment of an organisation.

Political factors: The political situation of a region provides a legal framework for all the
constructions to take place in that region therefore, construction companies need to fulfil all
the rules and regulations for a specified region. Governments can also take a stance as
favourable or unfavourable regarding construction projects. Any specific government in a
region determines the economic policy of that area, therefore, having a supportive
government is very important for a construction company to flourish. Other political factors
which affect the construction industry are the permits and documentation process which
needs to be furnished across various different stages of a construction project. The stance of
a government can majorly influence the feasibility of construction project. For example, new
upcoming projects, construction of new roads, new taxation system can result in a change of
revenue or change in return on investment for a certain project.

Https://blog.essaycorp.com/pestle-analysis-for-construction-industry/

Economic factors: Economic factors affect the construction industry in a major way
because Constructions projects being very capital intensive in nature need to get their
investments right and any new changes economic policy can dramatically affect the return
on investment. For example, inflation rates, interest rates in a region can affect the cost of
Financing, customers' willingness to purchase, demand, property investment, rent, mortgage
value of a project. Other economic factors which affect construction industry are GDP
growth, economic growth, foreign exchange rates, inflation rates, debt to equity ratio, land
cost, labour cost.

Https://www.stuff.co.nz/business/property/96541512/construction-industry-struggling-to-
grow-further-despite-demand-anz

Legal factor: Legal factors take into account all the external and internal aspects which are
bound by the law and regulations in the region. This factor takes into account legal aspects
such as quotas, resources, exports, imports, employment, wages, taxes etc. External legal
factor comprises land law, Labour Law, construction law and many other rules and
regulations which have been defined by the government operating in the area. Internal legal
factors comprise shareholder policy, investor policies, contracts, budgets and other policies
which company follows for their own operation. Analysis of legal factor for external
environment analysis is important because the company can chart their strategies by taking
all the legal aspects into account. Legal factors factor also take into account laws like data
protection law, consumer law, contract law, employment law, health and safety law.
Environment factors: The environmental factor is determined that how the organisation is
affecting its surrounding environment. It is not only limited to weather, climate, Global
changes but also because of environmental policies defined by the rules and regulations in
the region. There are certain environmental protection policies which prevent the
construction of the building of a certain height or prevents construction in certain areas. All
such environmental factors must be taken into account before taking up a construction
project.

Social factors: Social factor comes into account because of the influence of consumer
buying behaviour and market sentiment before setting up a project. The merits & demerits of
that project, demand and supply of raw material & finished products must be analysed with
respect to the kind of demographics of the people living in the community. Social factors are
measured by population demographics, norms, culture, behaviours, attitude. These factors
are important because each project is different and must be made as per the need of the
client. And the need of the client is governed by the cultural factors or social norms
prevailing in that region. Social factors also take into account the social environment existing
in the market which is measured by demographics, cultural trends, population analytics,
distribution of wealth, education level, change in lifestyle and aspirations.

Https://www.transport.govt.nz/assets/Uploads/Research/Documents/NZIER-report-2013-
construction-industry-performance.pdf

Technological factors: Technological factors take into account the new innovations,
inventions, machinery, design technology and other changes in technology which is
influencing the way operations of the construction industry has been changing.
Technological factors such as online buying platforms, online cataloguing also affects the
consumer buying behaviour and the market of construction products. Technological factors
also involved the kind of technical capability, technical talent, intellectual property possessed
by the company. A company need to invest in technology so that it keeps on innovating
because after a certain time technology becomes obsolete.

Https://www.hays.net.nz/nziob/HAYS_1907345