Response of Nigerian Construction Industry to Economic Growth

Abstract

The study assessed response of Nigerian Construction Industry to economic growth of Nigeria. The research was conducted using secondary data. The secondary data used was the National Account Dataset from 1981 to 2018 as 2010 constant price year. This was gotten from the Central Bank of Nigeria (CBN) publication reports. The response was evaluated through Impact propensity (IP), Finite Distributed Lag (FDL) and the Long Run Propensity (LRP). These parameters were calculated from the time series regression analysis using ordinary Least Square Method of estimation. The results show that the impact propensity of economic growth on construction is weak with correlation coefficient of -0.012. Delayed impact of economic growth on construction was observed with finite distributed lag of two year cycle. Maximum correlation coefficient of 1.265 with the economics of the preceding year (t-1) was observed. Long run propensity of 1.333 establishes a high growth propensity for construction industry given a one percent permanent GDP growth. Therefore, the study concluded that a consistent economic growth is desirable so as to achieve improved construction industry contribution to GDP.