The construction industry is an important part of the country’s economy. Construction is an important sector that greatly contributes to the economic growth of a nation. The construction industry laid the physical and technological foundations upon which modern civilization has grown. It also creates investment opportunities in various related and vital sectors for the realization of the national socio-economic plan.
Here are some factors that clearly underline the importance of the construction industry:
Influence on human development
Construction is the most ubiquitous factor in our lives. There is no aspect of human life and civilization on which construction does not have a profound influence, not only covering physical spaces but also hearts, bringing people together in their social, cultural, political endeavours. , recreational and economical.
It envelops a very wide canvas of human activities, from huts to skyscrapers, from cart roads to super-express highways, from culverts to multi-lane multi-span flyovers, from village shops to supermarkets and large industrial complexes, refineries and factories. fertilizers, from observation posts in the high Himalayas to off-shore drilling rigs on the high seas.
Impact on economy
A major sector of the economy that is receiving increasing attention as a possible area for the development of a better institutional structure in emerging countries is construction, an industry present in all development activities. Construction contributes to economic development by satisfying some of the basic objectives of development, including generation of production, creation of employment, generation of income and redistribution. It also plays a major role in meeting basic physical and social needs, including the production of housing, infrastructure and consumer goods.
A major goal of development is economic growth. At the beginning of the development process, the economy seems to be generally high, and construction, along with manufacturing, tends to play an important growth role in agriculture as the importance of the economy declines; However, once a relatively high level of development is reached, economic growth seems to slow down and the role of construction tends to stabilize or even decline slightly, while other sectors continue as before. The construction industry is an investment-driven sector where the government is showing great interest.
While the direct contributions of construction to development are significant, they also drive a sizable share of economic growth through backward and forward linkages. The needs of construction for goods and services from other industries are considerable; the development of the construction industry therefore stimulates these ancillary industries, thereby encouraging further economic growth. In developing countries, construction of physical facilities accounts for more than half of gross domestic investment and tends to focus on basic infrastructure in agriculture, mining, transport, communications and utilities . Infrastructure services contribute to some extent to GDP, but they also stimulate the development of other industries which, in turn, contribute more directly to economic growth.
Construction plays a central role in the growth of the economy as basic infrastructure. The health of the economy is often gauged by monitoring new home starts as an indicator of consumer confidence. An increase in the level of construction activity will increase GDP and have a positive influence on employment and government revenues.
Any budget cuts on construction will reduce construction activity and, after a while, will reflect lower GDP and slower economic growth. Any change in the level of construction output will have a correspondingly large effect on the economy of the country as a whole.
Around the world, construction is a leading industry in all agricultural markets. This is the first indicator of the health of the economy. Its acceleration initiates sustained economic growth and vice versa. Korea, Taiwan and Hong Kong have used the construction sector to build themselves into a vibrant economy. Malaysia and China are using the same strategy, rebuilding their cities and highways, etc. become major players in the global economy. According to the US Census, spending on construction projects totaled more than $993 billion in 2014.
Nowadays, all over the world, construction has become a leading industry in all vegetable crops. The construction industry accounts for more than 10% of global GDP (6-9% in developed countries) and employs around 7% of the global workforce (around 273 million people). The output of the global construction industry was worth approximately $10.8 trillion in 2017.
A large portion of construction inputs come in the form of raw, semi-processed and processed materials, e.g. aggregates, bricks, cement, steel, etc., which are supplied by labor-intensive domestic suppliers labor and basic industries. From a forward linkage perspective, the construction industry touches almost every sector of the economy. These links and the high value added to production show that construction significantly stimulates the growth of all sectors of the economy.