The contribution of the construction industry to economic development in Libya - Essay Example

Such estimates signifying the role of construction industry in the national economies, especially in the context of developing economies, could rise further as these figures do not include the informal sectors. In developing economies informal sectors generates significant casual employment in both rural and urban areas (Ganesan 2000). The construction outputs are considered as a major constituent of investment and part of fixed capital which are essential for continuous and sustainable economic growth.

In the normal course the outcomes of construction activities produce results that benefits on the whole for a larger period of time. Construction industry is also very important since infrastructure development is very crucial and a pre condition for potential economic growth (Ive and Gruneberg, 2000; Hillebrandt 2000). The importance of the construction industry is due to the role it has in the economy, but that role varies between nations. In developing countries, the construction industry has a pivotal role in providing a significant infrastructure in the form of roads, railways, hospitals, schools, airports, housing and other buildings.

In developed countries the emphasis is on professional services, maintenance and repair constructions (Ruddock, 2009; Bon, 1999).The main purpose of this study is to draw attention to the importance of the construction industry in Libya through investigating its relationship with other sectors via linkages which are defined as “backward and forward linkages” (Raza, 2008- p no?). The construction industry stimulates the growth of other sectors through a complex system of linkages which are defined as backward and forward – directions from an input and output model of the economy.

Changes in construction industry usually affect other sectors through its linkages. Therefore, its highest linkages with other sectors provide a more rapid growth in the economy (Song, Liu, 2006). As a matter of fact the backward