The Construction Industry and the Economy

The construction industry is important partly because its output is large and therefore that it is a significant part of the economy. The gross output of the construction industry is the value of all the buildings and works produced by the industry in a given period of time, normally a year. In the world as a whole it is probably about 10 per cent of Gross National Product (GNP), that is 10 per cent of all the goods and services produced, or of the order of US$3,000 billion in 1997. There is a considerable difference between various types of economy and geographical locations. Davis Langdon Consultancy (DLC, 1997) estimated that in 1990 the percentage shares were: Western Europe 30 per cent; Asia 28 per cent; North America 25 per cent; Eastern Europe 7 per cent; South America 5 per cent and Africa, Middle East and Oceania just under 2 per cent each. These estimates are similar in general conclusions to those by Drewer (1999) who estimated that developed market economies accounted for 78 per cent of global construction output in 1990. In Europe, gross construction output was around 10 per cent of GDP in 1997, marginally less for the EU and slightly more for countries of the former Soviet Union (DL&E, 2000).