Construction Industry

Construction is one of the most dangerous occupations in the world, incurring more occupational fatalities than any other sector in both the United States and in the European Union. In 2009, the fatal occupational injury rate among construction workers in the United States was nearly three times that for all workers. Falls are one of the most common causes of fatal and non-fatal injuries among construction workers. Proper safety equipment such as harnesses and guardrails and procedures such as securing ladders and inspecting scaffolding can curtail the risk of occupational injuries in the construction industry. Other major causes of fatalities in the construction industry include electrocution, transportation accidents, and trench cave-ins.

Other safety risks for workers in construction include hearing loss due to high noise exposure, musculoskeletal injury, chemical exposure, and high levels of stress.

Construction is the process of constructing a building or infrastructure. Construction differs from manufacturing in that manufacturing typically involves mass production of similar items without a designated purchaser, while construction typically takes place on location for a known client. Construction as an industry comprises six to nine percent of the gross domestic product of developed countries. Construction starts with planning,[citation needed] design, and financing; and continues until the project is built and ready for use.

Large-scale construction requires collaboration across multiple disciplines. An architect normally manages the job, and a construction manager, design engineer, construction engineer or project manager supervises it. For the successful execution of a project, effective planning is essential. Those involved with the design and execution of the infrastructure in question must consider zoning requirements, the environmental impact of the job, the successful scheduling, budgeting, construction-site safety, availability and transportation of building materials, logistics, inconvenience to the public caused by construction delays and bidding, etc. The largest construction projects are referred to as megaprojects.

Construction is a general term meaning the art and science to form objects, systems, or organizations, and comes from Latin constructionem (from com- “together” and struere “to pile up”) and Old French construction. Construction is used as a verb: the act of building, and a noun: how a building was built, the nature of its structure.

In general, there are three sectors of construction: buildings, infrastructure and industrial. Building construction is usually further divided into residential and non-residential (commercial/institutional). Infrastructure is often called heavy/highway, heavy civil or heavy engineering. It includes large public works, dams, bridges, highways, water/wastewater and utility distribution. Industrial includes refineries, process chemical, power generation, mills and manufacturing plants. There are other ways to break the industry into sectors or markets.

Engineering News-Record (ENR) is a trade magazine for the construction industry. Each year, ENR compiles and reports on data about the size of design and construction companies. They publish a list of the largest companies in the United States (Top-40) and also a list the largest global firms (Top-250, by amount of work they are doing outside their home country). In 2014, ENR compiled the data in nine market segments. It was divided as transportation, petroleum, buildings, power, industrial, water, manufacturing, sewer/waste, telecom, hazardous waste plus a tenth category for other projects. In their reporting on the Top 400, they used data on transportation, sewer, hazardous waste and water to rank firms as heavy contractors.

The Standard Industrial Classification and the newer North American Industry Classification System have a classification system for companies that perform or otherwise engage in construction. To recognize the differences of companies in this sector, it is divided into three subsectors: building construction, heavy and civil engineering construction, and specialty trade contractors. There are also categories for construction service firms (e.g., engineering, architecture) and construction managers (firms engaged in managing construction projects without assuming direct financial responsibility for completion of the construction project).

Building construction

Building construction is the process of adding structure to real property or construction of buildings. The majority of building construction jobs are small renovations, such as addition of a room, or renovation of a bathroom. Often, the owner of the property acts as laborer, paymaster, and design team for the entire project. Although building construction projects typically include various common elements, such as design, financial, estimating and legal considerations, many projects of varying sizes reach undesirable end results, such as structural collapse, cost overruns, and/or litigation. For this reason, those with experience in the field make detailed plans and maintain careful oversight during the project to ensure a positive outcome.

The National Cement Share Company of Ethiopia’s new plant in Dire Dawa.

Commercial building construction is procured privately or publicly utilizing various delivery methodologies, including cost estimating, hard bid, negotiated price, traditional, management contracting, construction management-at-risk, design & build and design-build bridging.

Residential construction practices, technologies, and resources must conform to local building authority regulations and codes of practice. Materials readily available in the area generally dictate the construction materials used (e.g. brick versus stone, versus timber). Cost of construction on a per square meter (or per square foot) basis for houses can vary dramatically based on site conditions, local regulations, economies of scale (custom designed homes are often more expensive to build) and the availability of skilled tradespeople. As residential construction (as well as all other types of construction) can generate a lot of waste, careful planning again is needed here.

Residential construction

The most popular method of residential construction in North America is wood-framed construction. Typical construction steps for a single-family or small multi-family house are:

  • Develop floor plans and obtain a materials list for estimations (more recently performed with estimating software)
  • Obtain government building approval if necessary
  • Clear the building site
  • Survey to stake out for the foundation
  • Excavate the foundation and dig footers.
  • Pour a foundation and footers with concrete
  • Build the main load-bearing structure out of thick pieces of wood and possibly metal I-beams for large spans with few supports. See framing (construction)
  • Add floor and ceiling joists and install subfloor panels
  • Cover outer walls and roof in OSB or plywood and a water-resistive barrier.
  • Install roof shingles or other covering for flat roof
  • Cover the walls with siding, typically vinyl, wood, or brick veneer but possibly stone or other materials
  • Install windows
  • Frame interior walls with wooden 2x4s
  • Add internal plumbing, HVAC, electrical, and natural gas utilities
  • Building inspector visits if necessary to approve utilities and framing
  • Install insulation and interior drywall panels (cementboard for wet areas) and to complete walls and ceilings
  • Install bathroom fixtures
  • Spackle, prime, and paint interior walls and ceilings
  • Additional tiling on top of cementboard for wet areas, such as the bathroom and kitchen backsplash
  • Install final floor covering, such as floor tile, carpet, or wood flooring
  • Install major appliances
  • Unless the original owners are building the house, at this point it is typically sold or rented.

New construction techniques and sustainability

As efficiency codes have come into effect in recent years, new construction technologies and methods have emerged. University Construction Management departments are on the cutting edge of the newest methods of construction intended to improve efficiency, performance and reduce construction waste.

New techniques of building construction are being researched, made possible by advances in 3D printing technology. In a form of additive building construction, similar to the additive manufacturing techniques for manufactured parts, building printing is making it possible to flexibly construct small commercial buildings and private habitations in around 20 hours, with built-in plumbing and electrical facilities, in one continuous build, using large 3D printers. Working versions of 3D-printing building technology are already printing 2 metres (6 ft 7 in) of building material per hour as of January 2013, with the next-generation printers capable of 3.5 metres (11 ft) per hour, sufficient to complete a building in a week. Dutch architect Janjaap Ruijssenaars’s performative architecture 3D-printed building is scheduled to be built in 2014.

In the current trend of sustainable construction, the recent movements of New Urbanism and New Classical Architecture promote a sustainable approach towards construction, that appreciates and develops smart growth, architectural tradition and classical design. This is in contrast to modernist and short-lived globally uniform architecture, as well as opposing solitary housing estates and suburban sprawl. Both trends started in the 1980s.

The construction site may be shut down due to bad weather. Erecting scaffolded tents over the site may reduce the number of lost work days, increasing productivity.

The first huts and shelters were constructed by hand or with simple tools. As cities grew during the Bronze Age, a class of professional craftsmen, like bricklayers and carpenters, appeared. Occasionally, slaves were used for construction work. In the Middle Ages, these were organized into guilds. In the 19th century, steam-powered machinery appeared, and later diesel- and electric powered vehicles such as cranes, excavators and bulldozers.

Fast-track construction has been increasingly popular in the 21st century. Some estimates suggest that 40% of construction projects are now fast-track construction.

List of countries by the largest output in construction

List of countries with the largest construction output in 2015

Economy Construction output in 2015 (billions in USD)
(01)  India 849
(02)  United States 599
(03)  China 569
(04)  Japan 333
(05)  France 147
(06)  Germany 143
(07)  United Kingdom 131
(08)  Canada 131
(09)  Australia 115
(10)  Russia 111
(11)  Brazil 109
(12)  Italy 107
(13)  Spain 104
(14)  Indonesia 93
(15)  Mexico 92
(16)  South Korea 58
(17)  Turkey 35
(18)  United Arab Emirates 34
(19)  Venezuela 34
(20)  Netherlands 34
(21)  Poland 34
(22)   Switzerland 33
(23)  Saudi Arabia 32
(24)  Iran 29
(25)  Colombia 29

Petroleum industry

ReservespieOil & Gas, any of a group of fuel gases produced from oil by exposing it to high temperatures. High-Btu oil gas is so called because of its high heating value; it is often used to supplement natural gas during periods of high demand. Refinery oil gases are produced as byproducts during normal heat treatment in oil refining. Their chief use is in the heating of refinery equipment. Typically, oil gas consists of methane, ethane, propane, butane, and some of their derivatives.

The American Petroleum Institute divides the petroleum industry into five sectors:

  • upstream (exploration, development and production of crude oil or natural gas)
  • downstream (oil tankers, refiners, retailers and consumers)
  • pipeline
  • marine
  • service and supply


Oil companies used to be classified by sales as “supermajors” (BP, Chevron, ExxonMobil, ConocoPhillips, Shell, Eni and Total S.A.), “majors”, and “independents” or “jobbers”. In recent years however, National Oil Companies (NOC, as opposed to IOC, International Oil Companies) have come to control the rights over the largest oil reserves; by this measure the top ten companies all are NOC. The following table shows the ten largest national oil companies ranked by reserves  and by production in 2012.

Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil in general has been used since early human history to keep fires ablaze and in warfare.

Its importance to the world economy evolved slowly, with whale oil used for lighting in the 19th century and wood and coal used for heating and cooking well into the 20th century. The Industrial Revolution generated an increasing need for energy which was met mainly by coal, and with other sources including whale oil. However, when it was discovered that kerosene could be extracted from crude oil and used as a lighting and heating fuel, petroleum was in great demand, and by the early twentieth century had become the most valuable commodity traded on world markets.

Petroleum is a naturally occurring liquid found in rock formations. It consists of a complex mixture of hydrocarbons of various molecular weights, plus other organic compounds. It is generally accepted that oil is formed mostly from the carbon rich remains of ancient plankton after exposure to heat and pressure in the Earth’s crust over hundreds of millions of years. Over time, the decayed residue was covered by layers of mud and silt, sinking further down into the Earth’s crust and preserved there between hot and pressured layers, gradually transforming into oil reservoirs.

The petroleum industry includes the global processes of exploration, extraction, refining, transporting (often by oil tankers and pipelines), and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline (petrol). Petroleum (oil) is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry is usually divided into three major components: upstream, midstream and downstream. Midstream operations are usually included in the downstream category.

Petroleum is vital to many industries, and is of importance to the maintenance of industrial civilization in its current configuration, and thus is a critical concern for many nations. Oil accounts for a large percentage of the world’s energy consumption, ranging from a low of 32% for Europe and Asia, to a high of 53% for the Middle East.

Other geographic regions’ consumption patterns are as follows: South and Central America (44%), Africa (41%), and North America (40%). The world consumes 30 billion barrels (4.8 km³) of oil per year, with developed nations being the largest consumers. The United States consumed 25% of the oil produced in 2007. The production, distribution, refining, and retailing of petroleum taken as a whole represents the world’s largest industry in terms of dollar value.

Governments such as the United States government provide a heavy public subsidy to petroleum companies, with major tax breaks at virtually every stage of oil exploration and extraction, including the costs of oil field leases and drilling equipment.

Top 10 largest world oil companies by reserves and production
Rank Company (Reserves) Worldwide Liquids Reserves (109bbl) Worldwide Natural Gas Reserves (1012 ft3) Total Reserves in Oil Equivalent Barrels (109 bbl) Company (Production) Output (Millionsbbl/day)[1]
1  Saudi Aramco 260 254 303  Saudi Aramco 12.5
2  NIOC 138 948 300  NIOC 6.4
3  Qatar Petroleum 15 905 170  ExxonMobil 5.3
4  INOC 116 120 134  PetroChina 4.4
5  PDVSA 99 171 129  BP 4.1
6  ADNOC 92 199 126   Royal Dutch Shell 3.9
7  Pemex 102 56 111  Pemex 3.6
8  NNPC 36 184 68  Chevron 3.5
9  NOC 41 50 50  Kuwait Petroleum Corporation 3.2
10  Sonatrach 12 159 39  ADNOC 2.9

The Petroleum industry is a favorite subject in contemporary fiction. Films with oil-industry themes include There Will Be Blood (2007) set around Southern California’s oil boom of the late 19th and early 20th centuries, and Syriana (2005) set in present-day Middle-East.

Some petroleum industry operations have been responsible for water pollution through by-products of refining and oil spills. The industry is the largest industrial source of emissions of volatile organic compounds (VOCs), a group of chemicals that contribute to the formation of ground-level ozone (smog).

The combustion of fossil fuels produces greenhouse gases and other air pollutants as by-products. Pollutants include nitrogen oxides, sulphur dioxide, volatile organic compounds and heavy metals.

As petroleum is a non-renewable natural resource the industry is faced with an inevitable eventual depletion of the world’s oil supply. The BP Statistical Review of World Energy 2007 listed the reserve/production ratio for proven resources worldwide. The study placed the ratio of proven reserves to production in the Middle East at 79.5 years, Latin America at 41.2 years and North America at 12 years. A simplistic interpretation of the ratio has led to many false predictions of immanent “running out of oil” since the early years of the oil industry in the 1800s. This has been especially true in the United States, where the ratio of proved reserves-to-production has been between 8 years and 17 years since 1920. Many have mistakenly interpreted the result as the number of years before the oil supply is exhausted. Such analyses do not take into account future reserves growth.

The Hubbert peak theory, which introduced the concept of peak oil, questions the sustainability of oil production. It suggests that after a peak in oil production rates, a period of oil depletion will ensue. Since virtually all economic sectors rely heavily on petroleum, peak oil could lead to a partial or complete failure of markets.

According to research by IBIS World, biofuels (primarily ethanol, but also biodiesel) will continue to supplement petroleum. However output levels are low, and these fuels will not displace local oil production. More than 90% of the ethanol used in the US is blended with gasoline to produce a 10% ethanol mix, lifting the oxygen content of the fuel.

Researchers have discovered that the petrochemical industry can produce ground-level ozone pollution at higher amounts in winter than in summer.

Midstream operations are sometimes classified within the downstream sector, but these operations compose a separate and discrete sector of the petroleum industry. Midstream operations and processes include the following:

Gathering: The gathering process employs narrow, low-pressure pipelines to connect oil- and gas-producing wells to larger, long-haul pipelines or processing facilities.

Processing/refining: Processing and refining operations turn crude oil and gas into marketable products. In the case of crude oil, these products include heating oil, gasoline for use in vehicles, jet fuel, and diesel oil. Oil refining processes include distillation, vacuum distillation, catalytic reforming, catalytic cracking, alkylation, isomerization and hydrotreating. Natural gas processing includes compression; glycol dehydration; amine treating; separating the product into pipeline-quality natural gas and a stream of mixed natural gas liquids; and fractionation, which separates the stream of mixed natural gas liquids into its components. The fractionation process yields ethane, propane, butane, isobutane, and natural gasoline.

Transportation: Oil and gas are transported to processing facilities, and from there to end users, by pipeline, tanker/barge, truck, and rail. Pipelines are the most economical transportation method and are most suited to movement across longer distances, for example, across continents. Tankers and barges are also employed for long-distance, often international transport. Rail and truck can also be used for longer distances but are most cost-effective for shorter routes.

Storage: Midstream service providers provide storage facilities at terminals throughout the oil and gas distribution systems. These facilities are most often located near refining and processing facilities and are connected to pipeline systems to facilitate shipment when product demand must be met. While petroleum products are held in storage tanks, natural gas tends to be stored in underground facilities, such as salt dome caverns and depleted reservoirs.

Technological applications: Midstream service providers apply technological solutions to improve efficiency during midstream processes. Technology can be used during compression of fuels to ease flow through pipelines; to better detect leaks in pipelines; and to automate communications for better pipeline and equipment monitoring.

Industry pioneers

Oil production

Financial and political

Environmental issues

Oil geology

Oil-producing areas

Industry Research Projects

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