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A glance at the construction sector

A glance at the construction sector


Bereket Gebru 05-17-17


In developing economies, the construction sector is a great source and outcome of growth. With economic growth comes the construction of various infrastructural facilities including roads, power stations, etc. Development also means that there will be more housing projects along with an accelerated rate of building factories and business centers.


As development is not achievable without construction works, the rate of growth of the construction sector is one of the tangible tools for measuring the speed of economic growth. The growth of the construction sector, in turn, stimulates a larger need and thus production of various constructions related materials. The production of materials such as metal and cement along with furniture increases with the expansion of the construction sector. That induces the expansion of organizations that produce these products. Moreover, the sector creates job opportunities for a large group of people. For instance, the Chinese construction sector employs over 30 million people. Such huge figures of employment demonstrate the sector’s vital to an economy.


In Ethiopia, the economic growth in the last fifteen years had its own influence on the construction sector. The growth of income during this time, especially in surplus producing areas of the farming community, has set in a trend of building much better houses. The dire problem of housing in the urban areas has also resulted in pressures to avert the problem. There have been vast undertakings of infrastructure and social development during the time in addition to the expansion evident in the industrial sector as a result of the agricultural led strategy. All these conditions have created a conducive environment for the growth of the construction sector.


In cities like Addis Ababa where a large amount of construction activities are taking place, there is a much wider chance of being employed in the sector besides the increase in the wage of daily laborers. Even though the sector is not distinctively known for women’s indulgence, it has employed thousands of them in our country in such a short time. he sector has shown concrete signs that it can help reduce urban unemployment significantly.


Opportunities and limitations of our construction sector


As stated earlier, the construction sector in our country is undergoing rapid growth. Though not as notable as the increase in the need for cement, the demand for electric, wood and metal materials has also increased. Organizations that produce products for the sector have increased in great number.


Expansion of the construction of houses has allowed business people, public servants and surplus farmers to have a better chance of becoming home owners by saving up some money. Employees of public and private organizations would especially benefit with the availability of long term loans for the construction of houses. The condition has generally created a favorable condition for middle income citizens to become house owners.


Besides the people who get employed in the sector, the expansion of small industries that supply the sector with inputs and construction related home materials also boosts urban employment. Especially the establishment of such small scale industries in the thousands means the number of jobs created would grow tremendously. The construction sector promises a great potential in curbing poverty and unemployment by speeding up development.


The construction of a large number of mega projects in the country over the last decade has raised the level of experience and capacity in the sector. Construction companies have increasingly become familiar with modern ways of doing things and the activities that seemed unimaginable in our country just a few years ago have become the norm these days. The familiarity and use of modern technological materials in the construction sector has also risen considerably in the past few years.


The educational policy of the country has also helped the sector notably as numerous engineers, architects and building professionals have been produced over the last decade. Universities in the federal capital and other regional states have produced thousands of professionals who would make valuable contributions in the sector. Coupled with the increased private and governmental investment in the sector, the availability of well trained professionals complements the future of the sector in the country.


One of the main problems in the sector is the lack of trained man power and the resulting low quality and high priced products. Occasionally, there are also problems associated with the lack of readiness in the part of urban youth to use job opportunities in the sector because they look down on construction work. Another problem associated with the lack of skilled personnel is that there are small numbers of construction companies in the country though the sector needs a large amount of companies at different levels (from small to large).


Another problem in the sector is the lack of organization and mobilization of middle income people to become house owners. Despite the interests of surplus farmers, public servants, private sector workers and small merchants to become house owners, an individual attempt to make that a reality proves to be too expensive. The arrangement of a bank loan to fill the gap and turn their wishes into a reality is not in place. 


Private investors have understood the shortage of construction materials and opted to invest in the sector very recently. Though investors have identified the sector as a profitable one, it has for a long time lacked investment. The situation has changed drastically recently though as cement and brick factories have sharply increased in number along with import of iron bars.


Another notable challenge for the sector is the spread of corruption. Collusion in awarding contracts and in approving quality are just two of the most notable kinds of corruption in the sector. Overpricing is also another problem that has artificially pushing up the cost of construction. There needs to be a mechanism in place to combat corruption in the sector and nurture its positive contributions to development.   



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