1. STRI - A reality check from an engineer Roger Flanagan Reading University

2. Construction is not one sector Ranges from repair and maintenance, dams, power plants, gas pipelines to hospitals, hotels and homes

3. Local markets are very different.... local construction tools and methods are different

4. Construction is very different.... and the methods of procurement and delivery are different

6. Global construction output - US$4.8 trillion Africa 70 M East 37 S America 101 Canada 156 Russia 90 China 321 India 81 Hong Kong 19 Australia 68 USA 1163 Europe 1487 Japan 436 S Africa 15 All figures are current with exchange rates as at Jan 2009 Sources of data: Asia Construct, Euroconstruct, and national statistics Malaysia 12 Turkey 12.5 N. Africa 28 N Zealand 14 US$bn Korea 107 Sweden Norway Finland 78

7. Integration of design and production Increasing collaboration across the supply chain using IT Companies from emerging markets seeking work in developed markets Emphasis on value not price Winning on technology, finance, safety, and environmental credentials Changing landscape of construction Bigger projects and bigger risks being undertaken by bigger companies Greater use of sub-contracting New ways of procuring projects (SPV, EPC, BOT etc.)

8. Hochtief Turner (USA) Leightons (Australia) Thiess (Australia) John Holland (Australia) C E Marshall (Earthmoving) ACS Dragados ACS Dragados The big are getting bigger -Emmar MGF JV in India -Al Habtoor Leighton in Middle East (25,000 staff)

9. The industry Table 1 listing W/120 describes construction services. It fails to describe the way that delivering projects has changed. Design has become an integrated part of the delivery process with Build-Operate-Transfer (BOT), Public- Private Partnerships (PPP), Design and Build and Engineer-Procure-Construct (EPC) being used more extensively around the world. The global construction market is huge – US$4.8 trillion, this doesn’t take account of the informal sector

10. A very good comprehensive and rigorous report; the methodology appears robust The reliability of the data and its realism is an issue Construction has not received as much attention as other sectors, probably because of its complexity Figure 3 has some surprising results - Japan is not known for being an easy market to enter for construction. The STRI - some observations

11. Messages Thought needs to be given about how the index will be used, updated and ultimately interpreted by the industry. There is a significant overlap with architectural and engineering and construction services. Hence, if the two indexes give a contradictory message about country entry, there will be a credibility issue. The restrictions on the movement of people are always capable of being overcome – and IT has made a huge difference in knowledge management.

12. Messages The weighting on restrictions of foreign ownership and other market entry conditions (40%) would appear somewhat high, bearing in mind the way that a Special Purpose Vehicle/Joint Venture is used for project delivery. STRI is about restrictiveness, whereas the business focus is attractiveness and project delivery - contractors are very good hunter-gatherers, weighing up ease of entry against opportunity. The weightings should be re-visited with a view to fine tuning to better reflect the characteristics of the sector

13. The contractor – in the face of adversity!