Essay On Construction Industry

Role of Construction Sector in the Economic Growth

Muhammad Saad Siddiqui

N.E.D University of Engineering and Technology,

Karachi, Pakistan

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Abstract:

“If Construction moves, everything moves”

Construction Industry is the most important industry for any country. It plays the role of a catalyst in national economy. Throughout the world, Construction Sector accounts for a significant proportion of County’s GDP and GNP.

This industry can be regarded as a mechanism of generating jobs for millions of un-skilled, skilled and semi-skilled workers and it has the largest workforce in the entire world. In the wake of the intensification of infrastructural development that is improving the well-being of people

The behavior of the industry has great implication to the achievement of national socio-economic development goals of providing infrastructure and employment. It includes schools, offices, hospitals and other buildings; urban infrastructure (including water supply, sewerage, drainage); railways, airports, roads, highways, ports, irrigation system, power system etc. Besides, the construction industry generates generous employment and provides a thrust to other sectors. According to the Bipartisan Policy Center, residential house construction can account for 4.5 to 6.3 percent of the nation's GDP. When this industry contracts, the blow is enough to throw the economy into a decline. Economic revival is also historically coupled to the recovery of the housing industry. Figure below shows the share of construction industry in the National GDP. Construction Industry in Pakistan:

The construction sector in Pakistan plays a central role in developing collective economy and dipping unemployment. It provides sizeable employment opportunities. The sector helps lessen poverty by generating earning opportunities for poor family units. It provides jobs to about 5.5 per cent of the total employed labor force or to 2.43 million persons, (2.41 million male and 0.2 million female) during 2003- 04 (Economic Survey 2004-05).

Unluckily the construction sector is one of the most abandoned sectors in

Construction activities and its yield is an essential part of a country’s national economy and industrial growth. The construction industry is often seen as a driver of economic expansion especially in developing countries. The industry can organize and effectively utilize local human and material assets in the development and continuation of housing and infrastructure to encourage local employment and progress economic efficiency (Anaman and Amponsah, 2007).

Field and Ofori (1988) stated that the construction makes a evident input to the economic output of a country; it generates employment and incomes for the people and therefore the effects of changes in the construction industry on the economy take place at all levels and in almost all aspects of life (Chen, 1998; Rameezdeen, 2007)

This means that construction has a sturdy linkage with many economic activities (Bon, 1988; Bon and Pietroforte, 1990; Bon et al., 1999; Lean, 2001; Rameezdeen, 2007), and anything that happens to the industry will directly and indirectly manipulate other industries and ultimately, the prosperity of a country. Hence, the construction industry is regarded as a vital and highly evident contributor to the process of growth (Field and Ofori,