This thesis considers the effect of macroeconomic changes in the level of interaction between countries and their effects on construction. A theoretical model of the construction industry is built and the properties of change within construction systems are investigated. From these hypotheses are developed. The dynamics of construction output are also studied with Catastrophe Theory being employed to model the response characteristics of the industry. The study continues with an in depth investigation of Gibraltar's sovereignty and its relationship with Britain and Spain. The changing levels of interaction between Gibraltar and Spain are considered and the effect on construction demand, output and construction systems are looked at over a twenty year period. Observations based on the study of Gibraltar are used as the basis for the testing of the hypotheses derived earlier. This data is also used to demonstrate the power of Catastrophe Theory. The thesis concludes with a description of other areas of interest, including those consequences of rapid physical development on economies. Suggestions are made for future research.