The economic value of construction: achieving a better understanding

20 September 2007
Les Ruddock, University of Salford
 

 

To fully appreciate the economic value of the construction sector, a distinction needs to be made between the value of the sector in the economy and the value to the economy.  A narrowly-defined construction industry contributes around 5% of Gross Domestic Product (GDP) in many developed countries, whereas, on a wider definition, the contribution may be roughly twice this size (Pearce,2003; Foulkes and Ruddock, 2006). 

On the basis that the entire built environment falls into the field of activity of construction, however, the value to the economy may even be considered to be as high as 20% of GDP.  The latter figure is based on the ‘framework system approach’ to analysing the construction sector.  

The rationale behind this approach and its use in understanding the construction sector’s role in maintaining the built environment and in sustainable development are developed and explained.

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