Housebuilding in a Recession: A Regional Case Study

Abstract

In this paper we examine recently completed research in the Scottish housebuilding industry as it emerges from recession. A regionally differentiated downturn in construction activity has hit Scotland less severely than parts of England but the Scottish experience may nonetheless be able to shed light on prospects for the future. In the paper we use a structure-conduct-performance paradigm to classify the industry and to see where and by how much it departs from competitive market behaviour. It is clear from the evidence that the industry is restructuring and experiencing problems in a number of areas. With this in mind we discuss a range of short-run and medium-term policy directions that might change the future path of the sector. We conclude with a call for further industrial organisation research in this area, utilising the neoinstitutional economics insights of transactions costs, etc.