The London Interbank Offered Rate (LIBOR) and UK construction industry output 1990 to 2008

Gruneberg, S. and Bickerton, M. 2013. The London Interbank Offered Rate (LIBOR) and UK construction industry output 1990 to 2008. Journal of Financial Management of Property and Construction. 18 (3), pp. 268-281.

TitleThe London Interbank Offered Rate (LIBOR) and UK construction industry output 1990 to 2008
AuthorsGruneberg, S. and Bickerton, M.
Abstract

Purpose - The aim of this research is to answer whether or not wholesale interest rates, such as the London Interbank Offered Rate, (LIBOR), can be used as an effective policy instrument to influence construction output. Developers and contractors borrow to finance construction and are charged retail interest rates, determined by the lending bank. The study investigated the relationship between LIBOR and construction industry output.

Design/methodology/approach - The study identified two time series, LIBOR and annual construction output and a number of regressions were run using first differences to observe whether a change in LIBOR alone had a significant influence on construction output lagged by 1, 2, 3, or 4 years.

Findings - No significant relationship was found between changes in LIBOR and the annual change in construction output, regardless of the number of years lagged.

Originality/value - The value of this research is that it supports the view that government policy needs to focus on stimulating construction demand, using real projects rather than monetary policies, such as interest rate manipulation.

JournalJournal of Financial Management of Property and Construction
Journal citation18 (3), pp. 268-281
ISSN1366-4387
Year2013
PublisherEmerald
Digital Object Identifier (DOI)doi:10.1108/JFMPC-03-2012-0004
Publication dates
Published2013

Related outputs

Workers' compensation in construction: workers' benefits under alternative dispute resolution systems
Emerson, R.D., Minchin, R.E. and Gruneberg, S. 2013. Workers' compensation in construction: workers' benefits under alternative dispute resolution systems. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction. 5 (3), pp. 113-121.

The use of gross fixed capital formation as a measure of construction output
Gruneberg, S. and Folwell, K. 2013. The use of gross fixed capital formation as a measure of construction output. Construction Management and Economics. 31 (4), pp. 359-368.

Programme Procurement in Construction: Learning From London 2012
Gruneberg, S. and Mead, J.M. 2013. Programme Procurement in Construction: Learning From London 2012. Oxford Wiley Blackwell.

Programme procurement in construction: learning from London 2012
Mead, J.M. and Gruneberg, S. 2013. Programme procurement in construction: learning from London 2012. Oxford Wiley.

Construction purchasing power parities: potential roles and limitations
Gruneberg, S. and Fraser, B. 2012. Construction purchasing power parities: potential roles and limitations. Building Research and Information. 40 (3), pp. 348-356.

Construction Markets in a Changing World Economy
Gruneberg, S. 2008. Construction Markets in a Changing World Economy. in: Ruddock, L. (ed.) Economics for the Modern Built Environment Abingdon, Oxon Taylor & Francis. pp. 153-167

Risk under performance-based contracting in the UK construction sector
Gruneberg, S., Hughes, W.P. and Ancell, D. 2007. Risk under performance-based contracting in the UK construction sector. Construction Management and Economics. 25 (7), pp. 691-699.

Site management training: an attitude survey of training providers and contractors' staff
Gruneberg, S. 2006. Site management training: an attitude survey of training providers and contractors' staff. Construction Information Quarterly. 8 (3), pp. 138-143.

Construction orders and output : A comparison of Government and commercially available data 1995-2001
Gruneberg, S. and Hughes, W.P. 2005. Construction orders and output : A comparison of Government and commercially available data 1995-2001. ournal of Financial Management of Property and Construction. 10 (2), pp. 83-94.

Analysing the types of procurement used in the UK: a comparison of two data sets
Gruneberg, S. and Hughes, W.P. 2004. Analysing the types of procurement used in the UK: a comparison of two data sets. Journal of Financial Management of Property and Construction. 9 (2), pp. 65-74.

Exposing the myth of the 1:5:200 ratio relating initial cost, maintenance and staffing costs of office buildings
Hughes, W.P., Ancell, D., Gruneberg, S. and Hirst, L. 2004. Exposing the myth of the 1:5:200 ratio relating initial cost, maintenance and staffing costs of office buildings. in: Khosrowshahi, F. (ed.) Proceedings 20th ARCOM Conference, 1-3 September 2004, Heriott Watt University, Edinburgh ARCOM.

Permalink - https://westminsterresearch.westminster.ac.uk/item/8yzyw/the-london-interbank-offered-rate-libor-and-uk-construction-industry-output-1990-to-2008


Share this
Tweet
Email