CONCRETE HOLLOW

BLOCKS
 Analysis of Price
Changes of Concrete
Hollow Blocks
Prices per piece of Concrete
Hollow Blocks

Sizes Quality Prices

#4 A Php 11.00
#4 B Php 8.00
#5 A Php 13.00
#5 B Php 10.00
#6 A Php14.00
▐ Sizes #4 and #5 are less expensive despite its
higher demand because more material and
content goes in the bigger hollow block, which
means that it has greater cost of production.

▐ Quality A has better ingredients and proportions

than Quality B. This is why Quality A is more
expensive than Quality B.
▐ There is a greater demand for concrete hollow
blocks during the dry months of the years than
during the rainy seasons, where the demand of it
decreases tremendously.

▐ The demand for this product changes throughout

the year, but the price usually stays for long
periods of time.
▐ Prices of concrete products including concrete
hollow blocks barely change throughout the
year; if the prices do change they would only
do so very slightly. This means that the price
change of the hollow blocks is not dependent
on its demand.
▐ The price of cement, on the other hand affects
the price of concrete hollow blocks. Cement is
one of the main ingredients in mixing and
creating hollow block.
▐ The price of concrete hollow blocks is
dependent on the production cost, and the
supply and price of a related product which is
cement.
 Market Structure and
Theories of Production
Market Period

▐ Long run

▐ Labor units fall are considered variable inputs because there is a very
small need of specialization

▐ Machinery are also considered variable inputs

▐ Ingredients and raw materials used for the concrete hollow blocks are
also variable inputs because they can be easily acquired and are
flexible
Production Technology

▐ Capital-intensive production technology

▐ highly dependent on the machinery and tools that needs to be used

 Product: Concrete Hollow Blocks

▐ Market Structure: Perfect Competition

Number of Firms - A very large number

There is fairly a large number of

manufacturers of concrete hollow blocks.
Higher scale hard wares, which the
Philippines is abundant of, also sell
concrete hollow blocks.
Product: Concrete Hollow Blocks

▐ Type of product - Standardized

There are existing standards for concrete
hollow blocks in the National Building Code of the
Philippines and National Structural Code of the
Philippines that manufacturers must comply to.
Product: Concrete Hollow Blocks

▐ Control over price - None

Since the number of buyers and sellers is
large, none of them individually is in a position
to influence the price and output of the industry
as a whole.
Product: Concrete Hollow
Blocks
▐ Conditions of entry - Very easy, no
obstacles
- It is easy to enter the market of concrete
hollow blocks because a firm does not have an
edge over the other firms.
- the ingredients and machinery used for
the production of concrete hollow blocks are
relatively easy to acquire in terms of availability
of resources.
Product: Concrete Hollow
Blocks
▐ Non-price competition - None
There is no non-price competition. The efforts
for advertising or marketing strategies of the firms will
not be exactly necessary because the demand of this
product is heavily reliant on the seasons and the price
of other goods.
▐ Fiscal policy refers to the government’s spending and taxing
behavior—in other words, its budget policy

▐ Ayodeji (2011) said that there is a considerable importance in the

relationship between government spending on construction work and
taxation
▐ Trade policy, by definition, is the policy applied to international trade

▐ Key link in the transmission of price signals from the world market to
the national economy

▐ Exports > Imports = Surplus

▐ Exports < Imports = Trade Deficit

Fiscal Policy
▐ Government spending and taxation plays a big
role in the field of construction.

 Increase in direct and indirect taxes

could cause reduction in the works of
construction sector.
 Indirect taxation - the total demand for
goods and services is reduced by indirect
taxes
 Inconsistent policy of taxation lead to
less production and demand
▐ Example: In Nigeria, it has been found (by the use of Pearson
correlation analysis) that the amount of taxation and the amount
of government spending on construction sector (capital
spending) of the government budgets for the whole twenty-seven
years (1980-2006) depict a very high positive type of strength of
relationship (Ayodeji, 2011).

▐ This shows that taxation has a significant resultant effect on the

construction sector.

▐ As part of the construction industry, manufacturing concrete

hollow blocks also adapt to this matter.
FISCAL POLICY AND CONCRETE HOLLOW BLOCKS
▐ Example: Government as a client buys most of the product and
general economic measures have a powerful influence on the
demand for that construction product.

▐ Any changes in its policy regarding building and engineering

projects will give a substantial effect on the performance of the
industry since the government is a large client of the construction
industry particularly concrete hollow blocks.

▐ The effects of demand changes contributes to the changes in the

size formation of construction firms within the construction industry.
▐ Fiscal policy also decreases net exports, which has a
mitigating effect on national output and income.

▐ It attracts foreign capital from foreign investors when

government borrowing increases interest rates.

▐ Companies wanting to finance projects relating to

construction must complement with their government
for capital so they could offer higher rates of return
and also, they must acquire that country’s currency.

▐ When foreign capital circulate into the country

undertaking fiscal expansion, demand for that
country’s currency increases.
▐ Consequently, export goods decrease and import
goods increase.

CONCLUSION
▐ Economically, due to the nature of construction
works, the general effect of this policy explained
above, is economically effective on the cost of
construction and also to the production of CHBs.
Trade Policy
Exchange Rates

▐ Analyzing the UK economy, a rise in the exchange rate in

the UK could contribute to further falls in construction
prices as it is likely that cuts in public capital construction
projects will not be compensated by improvement in the
private element of the construction sector
Exchange Rates
Exchange Rates

▐ Although the exchange rate dropped dramatically to

almost parity in 2009 UK manufacturers of construction
materials have not been able to increase their market
share either in the UK or in the export market.

▐ While there are some signs of improvement, an increase

in the exchange rate will favor importers
Exchange Rates

▐ When the euro exchange rate fell in 2008-9, construction

costs did not rise to compensate for the weakened UK
buying power.

▐ This conveys that the basic laws of supply and demand

within the construction supply chain continue to have a
considerably greater effect on costs than the effect of
exchange rates.
Imports vs Exports

This graph, on the other hand, shows that there is clearly a

constant trade deficit in the construction industry of the UK for
the past twenty years.