Abstract
The construction sector (CS) is an economic barometer that mirrors the state of the economy. Therefore, the construction sector is susceptible to economic impacts. This study investigated the impact of economic shocks (measured with the Gross Domestic Product (GDP)) on construction sector performance. The study used econometric methodology which involves several sequential procedure including unit root test, cointegration test, causality and exogeneity tests. The data used was the Annualized time series data about GDP and construction sector. The data were extracted from the United Nations Statistics Division database based on the year 2010 US Dollars price over a forty seven (47) year period (1970-2016). The study found that the GDP significantly caused the construction sector output in all tests investigated. The study concluded that the construction sector significantly responded to economic shocks in both the short and long run. The study recommended that government should develop a policy framework that supports a concurrent development of the economy and the construction sector in Nigeria.
Highlights
The economy sets the landscape whereby human agents exploit, process and trade in scarce resources to enable the production, allocation, exchange and consumption of goods and services (Rees, 2015)
More study is needed to clarify the conflict. It is against the backdrop of the foregoing that this study investigated the response of the Nigerian construction sector to economic shocks
A period of real Gross Domestic Product (GDP) growth tends to raise consumer demand for goods and services which in turn triggers up the demand for construction investment
Summary
The economy sets the landscape whereby human agents exploit, process and trade in scarce resources to enable the production, allocation, exchange and consumption of goods and services (Rees, 2015). The economy is very important to stimulate economic activities, and reduce poverty, raise income levels, create jobs, and drive human development (Department for International Development, 2008). The construction sector contributes more when the economy is growing because it provides a high investment multiplier to other sectors (Bykau and Khavalko, 2017; Qifa, 2013). The construction sector contribution to the Gross Domestic Product (GDP) is higher in developing countries because the diminishing returns of capital for investment are not as strong as the developed countries (Qifa, 2013). The importance of the construction sector to developing economies is due to its contributions to the GDP, domestic fixed capital formation, employment generation and the government as the largest client (Hosein and Lewis, 2004; Hillebrandt, 1988, 2000; Wahab, 2005).
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
