Taiwanese construction sector in a growing ‘maturity’ economy, 1964–1999

Abstract

Using 12 input‐output tables compiled in Taiwan between 1964 and 1999, the role of the construction sector in the development of the Taiwanese economy is examined and analysed in relationship to other economic sectors. Analytical results reveal a two‐stage inverted U‐shaped relationship between the share of construction in GNP versus GNP per capita. The ‘pull effect’ of the Taiwanese construction sector is approximately equal to that of the Japanese construction sector over time, demonstrating that construction is more closely linked to the wider economy in Taiwan than elsewhere, like Italy, the UK and the USA. The ‘push effect’ increases significantly over time, indicating that the M&R (maintenance and repair) construction expenditures are growing in Taiwan. Finally, the direct and total construction input from manufacturing initially increased from 1969 and then declined after 1981, while the input from the service sector has been steadily growing. These findings confirm the increasing ‘maturity’ of the Taiwanese economy, a trend that mirrors the economic development of other AICs like Italy, Japan, the UK and the USA.