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Construction sector concentration: evidence from Britain


  • Patrick McCloughan


For the first time, empirical estimates of concentration in the British construction sector are provided. The research adds value to published DETR/DTI data on the structure of British construction by applying a novel technique for estimating the concentration ratio proposed by McCloughan and Abounoori (MA) (2003). The MA method is applied because the data are grouped and simple summing of the largest market shares is not possible in this case. Results are provided on the trends in aggregate concentration (1971-99), concentration by main trades (1980-98) and concentration by specialist trades (1980-99). The first main finding is that aggregate concentration is low in British construction. This confirms the popular view, namely that construction is a fragmented sector, with the vast majority of private contractors operating at a small scale. The second main result is that concentration among main trades is also low. However, the same cannot be said of concentration among specialist trades - the third main result. The analysis shows that certain specialist trades (scaffolding specialists, asphalt and tar sprayers, constructional engineers, insulation specialists and demolition specialists) are relatively concentrated, even in the context of a national geographic market. These specialist trades experienced sharp rises in concentration in the latter half of the 1990s. The results suggest that the British construction sector is dynamic and comprises many diverse markets in terms of their levels and trends in concentration.

Suggested Citation

  • Patrick McCloughan, 2004. "Construction sector concentration: evidence from Britain," Construction Management and Economics, Taylor & Francis Journals, vol. 22(9), pages 979-990.
  • Handle: RePEc:taf:conmgt:v:22:y:2004:i:9:p:979-990
    DOI: 10.1080/0144619042000209396

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    Cited by:

    1. Lozano Navarro, Francisco-Javier, 2021. "Análisis de la concentración de mercado en la actividad inmobiliaria de Santiago [Market concentration of real estate in Santiago]," MPRA Paper 118262, University Library of Munich, Germany.
    2. Patrick McCloughan, 2005. "What’s Been Happening To Concentration in Irish Industry 1991-2001," The Economic and Social Review, Economic and Social Studies, vol. 36(2), pages 127-156.
    3. Charles K. Leung & Kelvin S. Wong, 2004. "The Construction and Related Industries in a Changing Socio-Economic Environment: The Case of Hong Kong," International Real Estate Review, Global Social Science Institute, vol. 7(1), pages 139-170.
    4. Kunhui Ye & Weiyan Jiang & Liyin Shen, 2008. "Project competition intensity (PCI) in the construction market: a case study in China," Construction Management and Economics, Taylor & Francis Journals, vol. 26(5), pages 463-470.


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