Needless to state, the construction industry plays an important role in reinforcing the Ethiopian economy, and the activities of the industry are also vital to the achievements of national socio-economic development goals of providing shelter, infrastructure and employment. This trend in turn contributes a lot to the economic development of the nation thereby helping it defeat poverty and underdevelopment.
Keeping all this in mind, The Ethiopian Herald conducted an interview with Asnake Waqjira, who graduated from Hawassa University in Economics, to have ample information regarding the contribution of construction industry to the economic progress at national level.
He said, “At the most basic level, construction is important because it allows us to build infrastructure. Our roads, bridges, tunnels, and ports are all essential components of a functioning society, and construction is what makes them possible. It is clear that construction activities affect nearly every aspect of the economy and that the industry is vital to the continued growth of the national economy. The sector has been becoming one of the major growth drives of the economy.”
As to Asnake, construction activities and its output is an integral part of a country’s national economy and industrial development. The construction industry is often seen as a driver of economic growth especially in developing countries like Ethiopia, indeed! The industry can mobilize and effectively utilize local human and material resources in the development and maintenance of housing and infrastructure to promote local employment and improve economic efficiency.
He further stated that, the construction makes a noticeable contribution to the economic output of a country; it generates employment and incomes for the people and therefore the effects of changes in the construction industry on the economy occur at all levels and in virtually all aspects of life. This implies that construction has a strong linkage with many economic activities, and whatever happens to the industry will directly and indirectly influence other industries and ultimately, the wealth of a country. Hence, the construction industry is regarded as an essential and highly visible contributor to the process of growth.
The significant role of the construction industry in the national economy has been high as there is a positive relationship between construction output and economic growth. Furthermore, as economy grows, construction output raises at a faster rate, assuming a higher proportion of GDP.
The construction outputs can be classified as a major component of investment and part of fixed capital. Both are essential factors for a continuous economic growth. Products of construction require a long period of gestation and are expected to supply services for a period of time, he added.
The construction industry is one of the cannonading industries of today that has a great impact on the economy of any nation. Any kind of alterations in structuring properties are done by a professional construction industry. Construction can be generic or based on civil engineering. Building a dam, road, monument, wooden structure, real estate assets, etc. is done by the construction industry with proper calculations, he opined.
Asnake said, “Construction is an important sector that contributes greatly to the economic growth of a nation. The Construction Industry is an investment-led sector where the government shows high interest. Government contracts with the Construction Industry to develop infrastructure related to health, transport as well as education sector. For the prosperity of any nation, the construction industry is quintessential.”
The construction industry is diversified. It involves numerous clients like property builders, property developers, material suppliers, and contractors. The industry brings cost-effective building solutions where all these clients play an active role in making the contract a success. Also, attractive construction of the infrastructure attracts many inward investors for business deals. Well-constructed infrastructure creates a healthy environment to work in, thereby increasing the productivity and flexibility of the labor force.
As far as logistics is concerned, he said it contributes greatly to the construction industry. It also teaches effective management of product transport, product handling, delivery of material, storage, etc.
As to him, certain common construction equipments including aerial lifts, concrete mixture, backhoe loaders, cranes, excavators, generators, scrapers, welders, among others, have been widely used in the country.
He further stated that, construction sector and construction activities are considered to be one of the major sources of economic growth, development and economic activities. Construction and engineering services’ industry play an important role in the economic uplift and development of the country. It can be regarded as a mechanism of generating the employment and offering job opportunities to millions of unskilled, semiskilled and skilled work force. It also plays key role in generating income in both formal and informal sector. It supplements the foreign exchange earnings derived from trade in construction material and engineering services.
He said, “Considering the significance of the construction sector, it is necessary to identify the major issues affecting the efficiency of the sector and take corrective action for increase in economic growth and development of Ethiopia.”
According to Asnake, construction is a major industry throughout the nation and the importance of the construction sector is not only related to its size but also to its role in economic growth. An industry sector this big could not but have an impact on the economy. Economic growth is currently an issue of global concern as most economies are finding it difficult to create the necessary employment opportunities and achieve meaningful growth.
He said, “The construction sector deals mainly with the provision of capital infrastructure, which has an impact on economic growth. The delivery of such infrastructure creates significant employment opportunities for the population, which generates further investment in other sectors of the economy through the multiplier effect. Considering the fundamental significance of the construction sector in employment creation, capital formation and its aggregate spillover effects, it is clearly an important sector in the economy. That does not mean that it drives economic growth.”
Many factors drive trends in the construction industry. For example, the factors below have contributed to the growth seen over the past several years, and they will continue to play a role in the development of construction trends moving forward.
Advanced technological trends and innovations like building information modeling like internet of things, and new construction materials will continue to push change forward via utilizing key construction industry trends include sustainability, automation, labor productivity changes, among others.
The global push toward sustainability, de-carbonization, water conservation, and energy efficiency has begun to affect green building, and home construction. Many construction companies have announced environmental, sustainability and the likes to enforce plans in response to sustainability concerns. Sustainable construction in both residential and nonresidential applications has several key benefits, of course, he added.
To mention but a few, promoting healthier living, reducing waste, boosting the economy, promoting cost efficiency, decreasing material cost as well as enabling carbon footprint reduction. Technological advancements have been critical to the construction sector’s continued growth, and the recent rapid nature of technological advancements has sparked a revolution in construction tech that is shaping the future trajectory of the industry, he underscored.
He further elucidated that no doubt, the construction industry is an important part of, not limited to in fact, the country’s economy. Construction is an important sector that contributes greatly to the economic growth of a nation. The industry has thus laid down the physical and technological foundations upon which modern civilization has developed. It also creates investment opportunities across various related sectors and vital to the achievement of national socio-economic objectives. Given below are some factors that clearly highlight the importance of the construction industry. There is no aspect of human life and civilization, upon which the construction does not have a profound influence, not only spanning physical spaces but also spanning hearts, by bringing people together in their social, cultural, political, recreational, and economic endeavors. The construction industry has thence attested that it is a viable sector to help the economic sector grow.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD TUESDAY 16 JULY 2024
