Pestel Framework Construction Industry

PESTEL analysis is used to identify forces in the macro-environment that affect a business now, and that are likely to affect the business in the future. I work for a UK based international construction company which caters to energy, building and civils sectors. Here in the Caribbean, we are involved in all three. The following factors impact on the construction industry.

Multinational companies such as the one where I am employed need to evaluate the level of political stability in the countries where they make investments. Political instability, particularly changes in government policy significantly impact the operations of these companies. An example of such shift in government follows:
In 2008, our company received a contract for part of the works at the government awarded aluminium smelter project at Eteck Park, Tamana. However, when a new government was elected, they withdrew financial support and closed down the project because of their anti-smelter stance. This resulted in the company’s loss of revenue, capital already invested, and termination of a chunk of our workforce.
Another telling example is the impact on our company of the relationship established between the Patrick Manning led PNM government and the Chinese government, which lead to the major construction projects being awarded to Chinese. “The construction sector took a severe beating under the Patrick Manning government when many Chinese firms got contracts to build government ministries and buildings…” (“Who’s Who” 47).

“Few private sector projects are being undertaken nowadays, especially against the backdrop of former Central bank Governor saying in May 2011 that the Trinidad and Tobago economy was in a slump, due in part to slow implementation of government projects…” (“Who’s Who” 46). This situation had a direct impact on our company itself, as several of our major projects were government awarded, and, due to the economic crisis, government was unable to...