An input–output analysis of Thailand's construction sector

Abstract

Three input–output (IO) tables compiled between 1995 and 2000 were used to examine the significance of the construction sector and its relationships with other sectors of the Thai economy. The pull and push effect of the Thai construction sector to the national economy indicated that the former is much larger than the latter. Additionally, the relatively high output multipliers and backward linkage indicators showed that the construction sector had the potential to trigger off production in many economic sectors linked to it. An aggregated sectoral analysis revealed the high dependence of construction on manufacturing followed by services. The findings also suggest that the trends of the profile of inputs and outputs are correlated to the economic conditions in Thailand at the time the IO tables were compiled. Finally, the results of employment analysis showed that although the share of construction sector in direct employment generation may not be very large, its economic importance lies in its direct and indirect contribution to employment through strong backward linkage effects. Consequently, when its backward linkages and output multiplier are considered together with the employment opportunities latent within it, then the construction sector could be a major contributor to the economic growth of Thailand.