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Abstract
In this study an attempt is made to formulate a new source of information on wholesale transactions for manufacturers and distributors of building and construction materials.
In reflecting the true market circumstances, such a source of information must serve a dual purpose: (1) it must enable the manufacturers of building and construction materials to manage strategically; and (2) it must serve as an economic stabilising aid for this particular economic sector.
The building and construction sector was chosen as the field of study because its growth performance was weaker than expected and because the building cost index has risen more than the consumer price index.
The exchange concept is taken as basis for this source of information because the prices of materials are made publicly known under market conditions so that a true free market mechanism is established to engender proper utilisation of the factors of production. Prices must keep pace with the building cycle in order to be a timeous indicator for common, strategic decision-making. Such decisions might have the effect that the heights and the lows in this building cycle could be eliminated to such an extent that more stable growth in real terms could be achieved in the provision of materials and in building and construction work.
The defects of the available statistics and other sources of management information are exposed. These point to insufficient, too global and outdated data.
The material procurement procedures are investigated. It is found that even on the micro-economic level, competitive procurement means taking cognisance of the forces of demand and supply which regulate prices and the availability of materials. Only when prices are subject to competition does the buyer accept that the price offered is low enough, otherwise he has to rely on a cost and value analysis.
The core idea behind the manufacturers' exchange is to establish an open and direct information system that can perform a liaison duty between micro- and macro-economic influences, and to promote the competitive element of free enterprise by way of which productivity can be increased and inflation counteracted.