The Interaction Effect Relationship Analysis Of Macroeconomic Variables And Construction Cost

In the market economic system of China, the accurate prediction of construction cost,which is regarded as an essential component of construction cost administration system, has a great influence on investment decisions for government and other stakeholders. In practice, however, because of the formation and control model of construction cost, static cost or outdated pricing index is practically used to predict construction cost. On the other hand, due to too much reliance of construction cost management personnel to quotes and cost standards and lack of statistic data, it lays particular emphasis on micro-influence such as material cost. The features and functions of construction cost show that macro-economic dynamic influence cannot be ignored in prediction of construction cost. Macroeconomic variables'influence on construction project cost is the core field of the thesis.To start with analyzing influence factors of construction cost, macroeconomic impact on cost, the application status of VAR and ECM in the economic field, the thesis indicates it is possible that VAR and ECM are used to study the interactive relationship between macro-economy and construction cost. After that, it theoretically analyzes the interactive relationship between construction cost and macroeconomic variables. And then VAR model is used to analyze the interactive relationship between economic variables and construction cost, finding out the gross regional product is the main factor on construction cost and the second is the general retail price index of commodities. It also analyzes construction cost role on macro economy. But VAR model doesn't consider variables'relationship on short-term disequilibrium which is common in practical economic process. The thesis is for studying the long-term equilibrium and short-term adjustment relationship between construction project cost and macro-economic variables to further establishes ECM. At last, it draws a conclusion that long-term adjustment factor ECM has a reverse adjustment function on construction cost fluctuation. Through the analysis of ECM model, it finds that short-term fluctuation of construction cost is sensitive to itself, the gross regional product, registered unemployment rate in cities and towns and general retail price index of commodities which is also the only having a negative correlation. In the end ,the conclusion obtained by the established VAR and ECM models and simulated results, can provide reference for prediction of construction cost.