ABSTRACT
The construction industry is an important focus of government policy. This is largely due to the recognition of the importance of construction to national economies. Broadly defined, the construction industry – including manufacturers of building products, equipment and components, and the various professional services provided by architects, surveyors, engineers and property managers – typically accounts for about 15-16 per cent of total annual economic activity. (You may remember that we compared broad and narrow definitions of construction activity in Chapter 1; and it may be useful to review Key Points 1.3.)
Official statistics, however, generally tend to restrict the construction sector to the narrower definition of the industry, estimating the activity of firms that construct and maintain buildings and infrastructure – that is, just those businesses that undertake on-site activities. Consequently, the share of total annual economic activity attributed to construction by the official statistics in the fully industrialised countries is now rarely larger than 10 per cent and usually between 6 per cent and 9 per cent. On average, the construction sector across the European Union accounted for 8.8 per cent of economic activity in 2014. Note though, as we explained in Chapter 12 (see Key Points 12.3), that construction output tends to decline as a proportion of a country’s GDP as its economy matures.
