What factors of production can affect a construction project
There are four main factors of production that can affect a construction project; they are land, labour, capital costs and an entrepreneur.
Land is defined as ‘land comprises all naturally occurring resources whose supply is inherently fixed’.  Land is a fixed resource as there is a limited amount, and price can vary depending on location. There are four main types of land:
Agricultural land denotes the land suitable for agricultural production, both crops and livestock. 
Brownfield Site/Land are abandoned or underused industrial and commercial facilities available for re-use. Expansion or redevelopment of such a facility may be complicated by real or perceived environmental contaminations. 
A green belt or greenbelt is a policy and land use designation used in land use planning to retain areas of largely undeveloped, wild, or agricultural land surrounding or neighbouring urban areas. 
An Investment land is purchased at ones own desire, he/she may want to sell it in the near future or to give it to someone as a gift.
Land Value = Aggregate Gross Revenues – Total Excepted Costs
Capitalisation RateThe price of land is determined by the use to which it can be put into, however it can vary overtime, but, not only does price change overtime but also interest rates can change very suddenly, and high interest rates tend to put people off in purchasing land. Site values are generally in the range of 20% to 25% of the total cost dwellings, the following formula is used to determine land value:
Land Value is also affected by:
Supply and demand, the supply of land is fixed although it use can always be altered.
The permitted of land use to which it can be put under planning regulations.
The location of the land, the more versatile the land the higher price it has.
Physical characteristics of land may alter the cost of development.
Land is a factor that can immensely affect a construction project as there are many ‘sub-factors’ which can make one bit of land more attractive to the buyer than the other as each type of land has its own advantages and disadvantages. Therefore if the correct decisions are made when purchasing land, it should minimise delays on a construction project.
Labour economics seeks to understand the functioning and dynamics of the market for labour. Labour markets function through the interaction of workers and employers. Labour economics looks at the suppliers of labour services (workers), the demanders of labour services (employers), and attempts to understand the resulting pattern of wages, employment, and income. In economics, labour is a measure of the work done by human beings. It is conventionally contrasted with such other factors of production as land and capital. 
The employment rate for the three months to March 2010 was 72.0 per cent. The rate was down 0.3 on the quarter and it has not been lower since the three months to September 1996. The number of people in employment fell by 76,000 on the quarter to reach 28.83 million. The number of full-time workers fell by 103,000 over the quarter but the number of part-time workers increased by 27,000. The number of employees and self-employed people working part-time because they could not find a full-time job increased by 25,000 on the quarter to reach 1.07 million, the highest figure since comparable records began in 1992.
The unemployment rate for the three months to March 2010 was 8.0 per cent, up 0.2 on the quarter. The number of unemployed people increased by 53,000 over the quarter, to reach 2.51 million, the highest figure since the three months to December 1994. The number of people unemployed for up to six months fell by 52,000, to reach 1.21 million. However, the number of people unemployed for more than twelve months increased by 94,000 over the quarter to reach 757,000, the highest figure since the three months to May 1997. 
Large construction companies only tend to employ labourers from larger agencies. Due to the fact that agencies are making labourers redundant, therefore there is a fewer number of labourers for construction companies to employ. This can be a large influence on the overall production of a construction.
Capital costs are costs incurred on the purchase of land, buildings, construction and equipment to be used in the production of goods or the rendering of services. In other words, the total cost needed to bring a project to a commercially operable status. However, capital costs are not limited to the initial construction of a factory or other business. For example, the purchase of a new machine that will increase production and last for years is a capital cost.
Capital costs do not include labour costs except for the labour used for construction. Unlike operating, capital costs are one-time expenses, although payment may be spread out over many years in financial reports and tax returns. Capital costs are fixed and are therefore independent of the level of output. 
In the construction industry it is very important to look out for capital costs, as some items may have a high capital, but they may have little return. For example purchasing a crane for a construction project would have a high capital but it is a very efficient plant therefore giving a high return. Thus, looking at capital costs can increase the production of a construction project.
An entrepreneur is a person who comes up with a new idea or invention and brings together a country's resources (land, labour and capital) to take the idea to the marketplace.
Entrepreneurs are vital to economic growth and, consequently, to higher living standards. Thus, legislators and other leaders who create economic policies should strive to encourage the innovation and risk taking of entrepreneurs. Enforcing property rights through contract, patent and copyright laws; encouraging competition through free trade, deregulation and antitrust legislation; and promoting a healthy economic climate through Federal Reserve anti-inflation initiatives—these are all examples of policies that empower entrepreneurs to be creative and take risks.
The accomplishments of entrepreneurs in our modern world have been possible because of a climate of individual freedom that is so rare in human history. The society that does not honor entrepreneurial accomplishment will find fewer able people engaged in wealth creation. History has shown time and again that economies that appreciate the benefits created by entrepreneurs flourish, while those that devise laws and regulations aimed at seizing the entrepreneurs' rewards founder. 
An entrepreneur takes risk and only sometimes does it pay off. Without any risk takers, the construction industry would not move forward. An entrepreneur would perhaps buy a plot of land, and develop it, not only to they boost the construction industry they also employ people to work for them. Therefore, entrepreneurs can enhance the production of a construction project.
In the construction industry there are three main markets; public, private and third sector. Each of them has their own ways in benefiting the construction industry.
Generally, during any recession public sector investment tends to run counter cyclical to private sector investment (as government attempt to soften the blow of declining levels of private investment), although this is largely dependent on the state of public Finances. The residential and commercial sectors in the UK are likely to be the hardest hit, particularly any speculative building.
However, it should be noted that the sectoral impact of this recession is likely to be slightly different to past experiences, largely because of the effects of PFI. Much public investment is now reliant on private sector financing and this is clearly going to have an effect on the public sectors ability to deliver projects and hence their potential to influence the marketplace.
On the other hand, infrastructure activity increased strongly through 2008 as a number of major projects got on site and this growth is expected to continue through 2009. In contrast the outlook for industrial construction is very negative, with manufacturing output in free fall during 2008 and with little hope of a recovery during 2009.
Infrastructure demand in London saw the fastest expansion. Another major project to be awarded in 2009 in the UK was CrossRail, with a budget of $30 billion; construction is due to start in 2010. CrossRail, along with the 2012 Olympics, could make the South East of England something of a hotbed of construction activity. However, both projects are not likely to be enough to offset the declines in the property sectors and UK construction spending is expected to decline significantly for the first time since the recession in the early 1990s. 
From the graph above we can see that the public sector is more consistent than the public sector. The public sector had a large decrease when the rescission hit, this is due to the fact that private sector is independently funded where as the public sector is funded by the government which uses the tax-payers money.
The third sector is also funded by the government, but they are non-profit making organisations. Non-profit making organisations tend to help the local area or community and all surpluses are not distrusted but it is put back into the company to help it grow andachieve its goal. The presence of a large non-profit sector is sometimes seen as an indicator of a healthy economy in local and national financial measurements. With a growing number of non-profit organizations focused on social services, the environment, education and other unmet needs throughout society, the non-profit sector is increasingly central to the health and well-being of society. 
Any type of construction project requires funding no matter how big or how small, and the source of the funding/finance can vary. These are personal savings, retained profit, other loans, overdraft facilities, grants, venture capital, lottery funding and preference shares.
Personal saving has been defined as disposable income minus personal consumption expenditure. In other words, income that is not consumed by immediately buying goods and services is saved. Other kinds of saving can occur, as with corporate retained earnings (profits minus dividend and tax payments) and a government budget surplus. 
However not many people use this method as a source of finance. The main reason being that not many people earn enough money per annum to be able to afford to fully run a construction project. On the other hand it is perhaps the safest way to get hold of a reasonable sum of money with out any major consequences.
When a business or a construction company makes a profit and it does not spend it, it keeps it, and accountants call profits that are kept and not spent retained profits. The retained profit is then available to use within the business or construction company to help with buying new machinery, vehicles, and computers and so on or developing it in any other way. Retained profits are also kept if the owners think that they may have difficulties in the future.
This is a more common method used to fund a construction project as it is a more realistic vision, and it is possible to base the size of the construction project on the amount of retained profit that is received per month. Quite often retained profit it used in emergency or sometimes put back into the company to expand it, and even some people do not spend that money at all, the reason for this being is having that retained profit to fall back on to or in other words for a peace of mind.
In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. 
Typically, the money is paid back in regular instalments, or partial repayments; in an annuity, each instalment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent.