An Assessment of Construction Value Added and Its Economic Impact on GDP and Other Sectors Across Global North and Global South Countries

12 pages•Published: July 23, 2025

John Annor, Francois Jacobs, Ahmed Abdelaty and Theodore Haupt

Abstract

This paper examines construction value added (VA) across developed and developing countries, aiming to understand its productivity, economic impact, and cross-sectoral dependencies. By comparing construction VA with agriculture and manufacturing sectors across income groups, this study identifies distinct roles of construction in both high- and low-income contexts. In high-income countries, construction VA demonstrates a weak positive correlation with GDP growth, suggesting a stable yet modest impact, aligned with mature infrastructure and economic diversification. In contrast, lower-middle-income countries exhibit a moderate positive correlation, where construction significantly supports GDP growth through infrastructure development and urban expansion. Low-income countries rely on construction for foundational economic functions, though limited productivity and resources constrain its broader impact on growth. The ANOVA test reveals statistically significant differences in construction VA across income groups, highlighting the varying contributions of construction based on income level and economic structure. These findings underscore the need for policy differentiation: high-income countries may prioritize sustainable infrastructure, while developing economies should focus on construction investment to boost productivity and support growth. This study offers a nuanced view of construction’s role globally, providing valuable insights for policymakers aiming to optimize construction’s contribution to economic development across diverse income levels.

Keyphrases: construction value added (va), cross sectoral dependencies, economic growth, income groups, infrastructure development

In: Wesley Collins, Anthony J. Perrenoud and John Posillico (editors). Proceedings of Associated Schools of Construction 61st Annual International Conference, vol 6, pages 631-642.

Links:	https://easychair.org/publications/paper/vD1S
	https://doi.org/10.29007/6978

BibTeX entry

@inproceedings{ASC2025:Assessment_Construction_Value_Added,
  author    = {John Annor and Francois Jacobs and Ahmed Abdelaty and Theodore Haupt},
  title     = {An Assessment of Construction Value Added and Its Economic Impact on GDP and Other Sectors Across Global North and Global South Countries},
  booktitle = {Proceedings of Associated Schools of Construction 61st Annual International Conference},
  editor    = {Wesley Collins and Anthony J. Perrenoud and John Posillico},
  series    = {EPiC Series in Built Environment},
  volume    = {6},
  publisher = {EasyChair},
  bibsource = {EasyChair, https://easychair.org},
  issn      = {2632-881X},
  url       = {/publications/paper/vD1S},
  doi       = {10.29007/6978},
  pages     = {631-642},
  year      = {2025}}

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