Construction in the economy and its role in socio-economic development: role of construction in economic development

The contribution of the construction industry to the national economy and its role in socio-economic development has been addressed by various authors and international organisations, and many of them have focused on developing countries. A partieular feature is that construcrion is the only sector Df the economy char appears twice in the national accounts Df any country: as a major component of fixed capital formarioo and as a secror that contributes to the gross domestic product (GDP) (Hillebrandt, 2000). Historical reviews point to the importance of construction in the process cf industrialisation and urbanisation that followed the advent of the industrial revolution in western and northern Europe and other parts of the globe. As regards the associarian between construction and economic growth, several writers (Strassman, 1970; Turin, 1973; World Bank, 1984; Wells, 1986; Bon, 1990) have analysed the changing role of the construction industry ar various stages cf economic developrnent and presented a developrnent partem for the industry based on the stage of development of a country's economy. One of the main features drawn from these works is the common assumption that directly relates the measures of construction output to a country's levei of econornic developrnent. Furthermore, in chis view, the construction secror, as a major component of a country's physical capital, plays a determinant role in the development process