THE CONTRIBUTION OF CONSTRUCTION INDUSTRY TO THE ECONOMIC GROWTH OF ETHIOPIA

Abstract

Construction industry plays a vital role in any developing country because most developing countries are considerably dependent on the growth and development of their physical infrastructures and the linkage of the construction industry to both economic and social sectors is very significant.. The main purpose of this study is to examine the contribution of Construction industry on economic growth in Ethiopia. Data on relevant variables such as RGDP, Construction Expenditures, trade openness, and FDI were acquired from secondary sources that constitute a time series of 19years period (from 2000 to 2018). The collected data was analyzed using STATA 13.The Ordinary least square regression analysis (OLS) revealedthat Construction Expenditures andtradeopennesshave a positive correlation with economic growth while FDI has no significant effect onrealGDP. Finally the researcher recommends to the government to invest more on construction projects to maintain the sustainable economic growth of the country. Furthermore; the researcher also recommends to the government to promot international trade to enable to play its role on economic growth.