Exploring the economic impact of construction pollution by disaggregating the construction sector of the input–output table

It has been argued that much environmental pollution is attributed to the construction sector. Other than the study of how such pollutants affect other parties, emphasis can be placed on estimating its economic impact on the construction sector itself. By knowing this, the sector may think of protecting itself by reducing pollutants. The study employs the disaggregated method in input–output (I–O) analyses to partition the original sector into a construction sector and a construction pollution sector and to employ sensitivity analysis to simulate the economic impacts of different levels of construction pollution. The real I–O tables of Japan are used for demonstration purposes. Results indicate that when the construction sector produces more pollutants, its outputs to other sectors would reduce and the inputs from other sectors would increase. This suggests that the construction sector becomes less economic efficient when more pollutants are generated. As a result, the economic impact of pollution has to be alleviated to improve the efficiency of the sector. This implication may also be applied to other sectors.     

Analysis of the causality links between the growth of the construction industry and the growth of the macro‐economy in Ghana

A vibrant construction industry in a developing country, that mobilizes human and local material resources in the development and maintenance of buildings, housing and physical infrastructure, is an important means to promote increased local employment and accelerate economic growth. Ghana, a country of about 22 million people, currently has one of the fastest growing economies in West Africa. The Government of Ghana (GOG) has recently set a target of annual economic growth rate of 8% and above, up from annual growth rates of 5–6% in the past five years (2001–05). It intends to use the agricultural sector as the major vehicle for achieving such high growth rates in order for the country to reach the status of a middle income country by 2015. Surprisingly, the construction industry was left out from the list of major growth drivers of the economy. We contend that with the construction industry currently making up the third largest sector of the economy, special attention should be given to this industry as one of the main drivers of economic growth in Ghana. Therefore we conducted a study to analyse the causality links between the growth in the construction industry and the growth in the macro‐economy of Ghana, measured by the gross domestic product (GDP), to ascertain whether the construction industry can be used to lead the entire economy on a growth path. The analysis was based on a simple Granger causality test using time series data from 1968 to 2004. We showed that growth in the construction industry Granger‐caused growth in GDP, with a three‐year lag. The construction industry needs to be considered as one of the major drivers of economic growth in Ghana.     

What role does the real estate–construction sector play in China’s regional economy?

Urbanization, industrialization and real estate reform have led to a vast growth of the real estate–construction sector in China. Using the 2002 and 2007 provincial input–output tables, this paper examines the importance of the real estate–construction sector in the Chinese economy by applying the hypothetical extraction method. The results show that for the 30 studied provinces, the weighted average impact of the real estate–construction sector accounts for 21 % of total output and for approximately 14 % of all jobs in 2002. For 2007, these figures are 23 and 22 %, respectively. The impact of the real estate–construction sector on total output and employment varies across regions. In 2007, the direct and indirect output and employment of real estate–construction sector accounted for around 15 % of total regional output and employment in Shandong and Henan, and for 40 % in Tianjin, Jilin, Shaanxi, Ningxia and Xinjiang. Our results also indicate that the real estate–construction sector is strongly own final demand oriented and regional economies which highly rely on it are particularly vulnerable to a fall in its demand.     

Growth,employment and the construction industry in Trinidad and Tobago

Trinidad and Tobago is a small open oil‐ and gas‐based economy that has experienced the effects of boom and bust and the associated fluctuations in income and employment. This paper focuses on the behaviour of the construction sector and its relationship to income and employment over the last three decades in this small oil‐rich economy. In the boom period the construction sector grew twice as fast as the rest of the economy. Similarly, during the recession the construction sector contracted faster than any other sector, providing proof that the multiplier operates in both directions. The correlation coefficient between construction labour productivity and per capita GDP for the period 1973–2002 was 0.70. As pertains to employment in construction per thousand population and per capita GDP, the correlation coefficient was 0.94.     

Editorial

The relationship between construction output and economic growth has been well discussed by construction economists. Most of the previous studies found a positive correlation between gross domestic product (GDP) per capita and various measures of construction output. However, cross‐sectional analysis was commonly adopted but longitudinal analysis has been called upon. Furthermore, recent research argued that non‐linear relationship between GDP and construction output exists because of different stages of economic development in different countries. They explained the phenomenon by means of the change of the growth rates of construction output at different stages of economic development, but the argument has not yet been rigorously tested. With the availability of long time‐series of data of Hong Kong construction industry, this paper attempts to test longitudinally the relationship between the real growth rate of construction output and the real growth rate of GDP. It was found that the growth rate of GDP led that of construction output, and as the growth rate of GDP increased, the growth rate of construction output was marginally diminishing. It agrees with the proposition that construction industry is relatively inefficient in productivity improvement and the accumulation of capital investment results in a marginally diminishing growth of construction output.     

The construction industry in the economy of Trinidad & Tobago

The construction sector is generally one of the larger and more important sectors of a nation's economy. If economic policy is to achieve its desired objectives, it is necessary to have some understanding of how the economy will react to various changes that can be effected. Because the construction sector is large and responsive, it is a key sector for manipulating the economy and, hence, it is important to know what the role of the construction sector is in the economy. Some of the key issues here are the effect of changes in GDP on construction output and employment, as well as the effects of changes in money supply, inflation, expenditure on the public sector investment programme and the rate of approval of building plans. This paper sets out to see if there are relationships between these factors that justify further investigation and, as such, helps establish a research agenda for the industry, particularly in comparing developed and less‐developed countries.     

A comparative input-output analysis of the construction sector in three developing economies of South Asia

Construction is commonly regarded as one of the major industries of an economy that is receiving a significant attention in the developing countries. This paper uses the Asian Development Bank (ADB) input-output database at constant prices for the selected Asian countries, i.e. Bangladesh, Sri Lanka and Nepal to analyze and compare the performance of the construction sector in these economies. The novelty of this research is the application of multiple linkages methods. First, the standard measures of the backward and forward linkages are used to examine the induced output created by the demand push and supply pull effects of the construction industry. Second, the concept of Hypothetical Extraction Method (HEM) is applied to extract a sector hypothetically from an economic system and then to examine the influence of that extraction on the rest of the economy. The results indicate that the construction sector has a strong backward and weak forward linkages for all the three economies. Furthermore, results reveal that the ‘pull effect’ is very significant in these countries while the ‘push effect is very insignificant. With respect to the identification of the key sectors, the findings of the traditional methods are very different from those of the hypothetical extraction methods.     

城市供水规划的自回归分布滞后模型研究

通过对广州市年用水量的分析,考虑时间、区内生产总值、人口、对用水量的影响,运用并建立自回归分布滞后预测模型,对规划用水量进行预测,实例分析说明自回归分布滞后模型预测城市用水量是可行的,具有很高的精度。     

Reassessing productivity in the construction sector to reflect hidden innovation and the knowledge economy

With the development of a knowledge economy, it is reasonable to assume that the level of innovation should be particularly high and that it should have a major effect on investment and productivity across all sectors, including the construction industry. For a valid assessment of the economic performance of the construction sector in terms of its productivity, it is important that the economic benefits for the sector from technological change are properly recognized but the impact of such benefits may be ‘hidden’ due to measurement issues, as innovative activity and investment in intangible assets have both gone unrecognized in official statistics. Much of the innovation in the construction sector is hidden from conventional measures and, for the UK economy, there is evidence that investment in intangibles may be even greater than tangible investment, if a definition of intangible assets incorporating spending on a broad range of knowledge‐based assets including organizational capital, human capital, etc. is taken. While accurate data are difficult to determine, an appraisal of the potential for utilizing existing data sources and for improved measurement is presented.     

An economic modelling approach for public sector construction workload planning

The effectiveness of public sector construction workload planning can be enhanced through employing an economic modelling approach to predict the impact of different workloads on tender price changes. The main problem associated with existing methods used for predicting tender price index (TPI) for construction projects is a lack of robustness when the market becomes unstable. This is due to limited consideration of market conditions in these methods. An economic modelling approach has been developed and applied for public sector construction workload planning in the States of Guernsey where forward planning was required. The developed model overcomes the problem of existing methods—lack of robustness—by correlating TPI of construction projects to demand over capacity ratio of the industry, which represents the industry's economic condition. The model generates the price changes under different planning options associated with different workloads over a five‐year planning period. The information is valuable to the public sector in estimating actually required investment. This ensures the feasibility of the plan and the possibility of contribution to the stability of the construction market. The model development and application process developed in this research can be used to assist a planning process for an industry where a demand, capacity and price relationship is applied.     

The construction industry and macroeconomy in Sub-Saharan Africa post 1970

This paper reports research aimed at the establishment of a model of interdependence between the construction sector and the national economy, based on a long term trend, for the developing countries of Sub-Saharan Africa. This study follows research undertaken by previous writers who have investigated the relationship between the construction sector and economic development and found a positive relationship between the share of construction in gross domestic product (GDP) and the level of per capita national income. In addition, recent economic and demographic trends in Sub-Saharan Africa are presented and significant events that have had a great impact in this region are highlighted. Evidence is presented that a long term decreasing growth in GDP per capita corresponds directly to a relative decrease in construction volume. The converse does not appear to be true.     

Managing knowledge: lessons from the oil and gas sector

Knowledge management (KM) is of increasing interest to a number of leading UK construction organizations. Companies are keen to find out what other organizations are doing both within the construction and other industry sectors. There are important lessons to be learned from Canadian oil and gas organizations on how they manage their knowledge. A case study is used to explore the KM activities of eight leading organizations and investigate the opportunities for construction organizations to adopt some of their ideas. Three areas are covered: KM strategy and implementation, people aspects of KM and metrics for KM performance. There are several potential lessons for UK organizations: the need for KM to be driven by senior management if it is to have any notable success; the use of people‐centred techniques for sharing tacit knowledge and IT tools for sharing explicit knowledge; the importance of selling solutions to project teams to obtain employee support for KM; peer recognition has a more sustainable impact than financial reward; and KM measurement should be considered as a way of improving its impact, rather than justifying expenditure.     

Quantifying the relationship between aggregate GDP and construction value added in a small petroleum rich economy – a case study of Trinidad and Tobago

The relationship between gross domestic product and the output of the construction industry is quantified, using as a case study the economy of Trinidad and Tobago (T&T). A historical perspective is used in order that anomalies can be set within the context of the relevant time and circumstances. Because the economy of Trinidad and Tobago is highly dependent on oil and gas revenues, the relationships between construction value added, GDP and oil and gas industry parameters are also included. In nearly all instances there are positive relationships between the parameters examined, and values for the various correlation coefficients have been obtained. An examination of causal factors obtained from a cumulative experience analysis also establishes that the direction of causality runs from the changes in GDP to the increase in construction value added, both at the aggregate level and at the per capita level. A similar positive relationship and direction of temporal causality is apparent between oil and gas revenues (and prices) and construction value added. These relationships are untypical, as smaller developing economies that do not have oil resources would be expected to show negative correlations for these relationships.     

Linkages in the construction sector

An important issue regarding the use of construction investment as a public policy tool is the magnitude of its contribution to growth and the nature of its interactions with the other sectors in the economy. Development planners have long used the concepts of backward and forward linkages to examine these interactions. None of the previous analysts, however, has concentrated on the construction sector. In this paper, we discuss the general nature of backward and forward linkages and their role in inducing economic development, present the most commonly used measures for quantifying and understanding the strength and nature of these linkages, and review estimates of backward linkages. In all countries for which estimates exist, we found that gross construction linkages are strong and that the economic impact of construction activities is relatively evenly dispersed over the sectors from which they obtain their inputs.     

An input-output analysis of the construction sector in emerging markets

Construction is a major industry in fast growing countries and plays a leading role in the process of economic development. Using input-output tables, the performance of the construction sector in six emerging countries (Brazil, Russia, India, Indonesia, China and South Africa) is compared from 1995 to 2005. First, the construction performance in these developing economies, by using standard indicators based on value added, gross output, final demand and intermediate inputs, is investigated. Then, the similarity cosine index is introduced to assess structural change and differences in input expenditures between countries. This index is a useful tool for identifying input bundles that require a probing international comparison of construction performance.     

The impact of property price on construction output

The interaction between the construction market and the overall economy has attracted much attention, but few studies have investigated the influence of the property market on the construction market in terms of property price. The disaggregated data of Hong Kong’s housing and retail construction sectors are collected to investigate the impact of property price on construction output. The newly developed autoregressive distributed lag (ARDL) bounds testing approach and the error correction (EC)-based Granger causality test are employed. The bounds testing results suggest that there exist stable long-run relationships between construction output and property price for both housing and retail construction sectors. Specifically, a 1.00% increase in the housing price and retail price lead to a 0.55% and 0.42% increase in construction outputs for the two sectors respectively. In addition, the Granger causality tests confirm a distinct long-run causal flow from property price to construction output. Furthermore, the proposed ARDL approach provides an effective method for forecasting construction output.     

基于VAR模型的城镇化进程与建筑业发展关联性分析

基于VAR模型对我国1995~2014年的城镇化进程相关指标和建筑业发展相关指标数据进行分析。以城镇人口数量和人均GDP作为衡量城镇化进程的主要指标,以建筑业增值作为衡量建筑业发展的主要指标。结果表明:我国城镇化进程与建筑业发展之间有显著的影响,城镇人口数量的变动和人均GDP的变动是引起建筑业发展的原因。方差分解的结果显示,城镇人口和人均GDP对建筑业变动的贡献分别为6.77%和29.97%。随着城镇化的发展,城镇化对建筑业的拉动作用逐渐明显,在滞后期为4年后,趋于稳定状态。     

China's fuel gas sector: History,current status,and future prospects

China has a unique urban pipeline network of three types of fuel gases: manufactured gas (coal gas), Liquefied Petroleum Gas (LPG), and natural gas. Manufactured gas, which is often seen as an outdated technology in the western world, is still widely used in Chinese cities. LPG is distributed through community-based pipelines in many Chinese cities, in addition to its distribution in cylinders and canisters in rural areas. Natural gas consumption is increasing throughout China, particularly as a cooking fuel. Expanding the production and supply of natural gas in China faces many challenges. In particular, China's controls on natural gas prices have deterred investment in exploration and natural gas imports. However, recent price decontrols of unconventional natural gas (defined in Chinas as shale gas, coal-bed methane, and coal-to-natural-gas), and recent pricing reforms, appear likely to increase natural gas use. The prospect for increased exploration is promising but will still depend greatly on the future of institutional reforms. In the near term, regulatory reforms toward a more market-driven system will be the most critical issue in the development of China's fuel gas sector.     

建筑业环境问题研究及喀麦隆乍得石油管道工程的案例分析与应用

减少建筑对环境的影响一直以来都被业界和社会所关注,已成为促进社会可持续发展的焦点之一。近几年来,环境法已经对此制定了专门的管理规定,即环境管理系统(EMS)。本文旨在检验环境管理系统在建筑业中的设想和应用情况,并结合喀麦隆乍得石油管道项目,从系统的角度对建筑项目的环境管理进行了研究。该项目是在世界银行投资项目中引起争议最大的项目之一,也是非洲最大的私人部门投资项目之一。     

The future of the private rental sector in sweden

The private rental sector in Sweden is competing on a less-regulated and less-subsidized housing market. The paper analyses the prospects of this sector. The private sector has the dual advantage of an older (more attractive and centrally located) stock and a slightly beter-off tenant profile than the municipal sector. Thus, the private sector will be less affected by the withdrawal of interest subsidies, as these were given to new stock. The rent-to-income ratio will surpass 30 per cent in all sectors of the housing market in the year 2002, according to a recent projection. The private sector suffers less from vacancies than the municipal sector. The economic situation is, however, characterized by high LTV ratios, due to a price and borrowing boom in the late 1980s. This has led to bankruptcies and a weak economic situation for many private landlords. The boom was followed by a bust in 1990–93. Both the upswing and the downturn can be explained by fundamentals such as changes in GDP, unemployment, housing subsidy and tax rules. In the present recession, the private rental sector will benefit from its large share of small dwellings, which will also be advantagenous in the longer run, in view of the demographic trend towards more small households. There is fierce competition between the private and the municipal housing sector. In the short run, the private sector will benefit from the removal of interest subsidies. The effects will be felt in the younger municipal sector. All in all, both short-run and long-run considerations point at a housing market in Sweden which will keep its dualistic character of free competition between the private and the municipal sector in the future. Bengt Turner is Professor of Economics and Chair of the Institute for Housing Research at Uppsala University. He is also chairman of the European Network for Housing Research and coordinates a working group on housing finance. His research area is housing policy, microeconomic analysis of the housing market, as well as housing finance. He has also analysed the housing situation in transitory (East European) countries. In Sweden he is actively involved in housing policy formation as an expert in Governmental commissions and as a member of a number of research boards. Tommy Berger is an economist at the Institute of Housing Research, Uppsala University. His main interest is in housing finance and taxation policy.