Construction services are one of the essential industries in a country’s economy. They produce shelters and other infrastructural features and provide materials for manufacturing products within these structures and new buildings. Construction services also heavily affect a country’s environmental performance, accounting for around 20 percent of greenhouse gas emissions.

A recent study found that car dealership construction services have a significant effect on poverty levels in countries across the world. It concludes that without construction services, poor populations can lack the necessary infrastructure to enable their participation in economic activities, including income-generating generators such as farming or small businesses like restaurants. This constraint can make it harder for them to escape from poverty altogether. On the other hand, construction services can also boost a country’s economy. Construction services are responsible for 10 percent of the global GDP. Infrastructure investments, such as roads and bridges, can enable more economic activities and increase wealth for a country’s citizens.

Some countries experience lower costs when contracting construction services than others. These costs reflect the transaction value of obtaining new assets from the market, including labor and materials. Construction services tend to be less pricey in nations with more competition between suppliers and fewer regulatory or market constraints that make it harder to do business. On the other hand, construction costs tend to be higher in countries where suppliers enjoy more market power. These forces occur because they create fewer restrictions on transaction prices and potential profits.

For consumers, construction service prices can even vary based on location. To be more specific, contractors have different costs that reflect their capabilities and location. Construction costs can also vary based on the quality of a contractor’s skills in accordance with the project’s complexity and difficulty. Through this avenue, a change of location also tends to alter construction services’ price level (Goller&Kavoussi 2009).

Construction services can be broken down into two types: direct and indirect. Direct construction services provide a service to consumers once the project is complete. It is sometimes referred to as off-site construction. For example, direct construction services are involved when a contractor builds a house or other building, whether for their own use or for their employer. Indirect construction services require the service provider to be present at the project’s site throughout its duration. For example, when a contractor assembles materials on-site and monitors their completion, it provides indirect construction services.

Indirect construction services often have high transaction costs due to the presence of higher risks and uncertainty associated with each purchase order (CO).