The construction industry in any country can be considered a highly complex sector, specifically with regard to the finance and economy that mainly involves a wide range of various stakeholders. In addition to this, the industry also possesses wider ranging linkages specifically with many other areas associated with activities including manufacturing along with use of finance, energy, materials, labour as well as equipment (Hillebrandt, 1985). The overall contribution of any country’s construction industry specifically in the aggregate economy has been previously addressed by many researchers and in this regard, ample literature is available particularly on those linkages that are between both the construction sectors as well as in various other economy sectors. Hirschman (1958) defined the term ‘linkages’ and emphasized the importance of ‘unbalanced’ growth specifically among various supporting sectors of finance and economy which were typically opposed to a highly balanced establishment of activities characterized as being interrelated economically (Lean, 2001). Park (1989) confirmed the fact that the entire construction industry of a country helps in generating higher multiplier effects via extensive linkages both backward and forward. The World Bank (1984) discussed the significance of the construction industry to national economies, a significance which mainly stems from the stronger linkages with various other sectors of finance and economy. Despite this, interdependence between both the construction sector and other economic sectors isn’t static (Bon, 1988; Bon, 1992). Strout (1958) clarified this phenomenon in providing a comparative and well-detailed inter-sectorial study (Bon & Pietroforte, 1993; Fox, 1976; Pietroforte & Bon, 1995).
Construction and building activities along with their output can be considered a significant part of both the national economy and the industrial development of a country (Khan, 2008). In addition to this, the housing and construction industry is mostly referred to as a major driver of both financial and economic growth specifically in various developing countries. According to Anaman and Amponsah (2007), this industry has the capacity to both mobilize and legitimately employ local people as well as material resources with regard to the development, setting, and maintenance of housing and infrastructure through the promotion of local employment and the enhancement of national economic efficiency. Field and Ofori (1988) are of the view that construction enables one to develop noticeable contributions specifically to the overall economic and financial output of a country since it helps in generating employment opportunities and income for the local people. Therefore, changes in the entire construction industry affect the financial and economic health of a country in every possible aspect of life (Chen, 1998; Rameezdeen, 2007). This underlines the notion that construction always had a solid linkage directly with the majority of the economic and financial activities; hence, any change in the industry would directly as well as indirectly affect various other industries and in turn the wealth of the entire country. Therefore, the construction industry as a whole is an essential and highly visible contributor to the overall processes of economic and financial growth (Field & Ofori, 1988).
Turin (1969) further highlighted the role played by the construction industry primarily in the areas of national finance and economy. With the help of cross sectional data obtained from different countries at different development levels, Turin (1969) critically argued that there is a positive relationship between construction output and economic growth. Moreover, increases in the economy help facilitate construction output at a much faster rate which equalled to higher GDP (Turin, 1969). Drewer (1997) also debated on the topic of ‘construction and development.’ By obtaining data in 1990 that was assembled by Turin for 1970, Drewer determined that worldwide construction growth was extremely concentrated the areas of marketing finance and economies in almost all the developed countries. Furthermore, several studies have also shown that the existing interdependence specifically between the entire construction sector and other economic and financial sectors does not remain static (Bon, 1988; Bon, 1992). In fact, the construction sector significantly changed when the economy and financial sectors of a country grew and developed (Drewer, 1997; Wells, 1986).