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Construction Sector Contribution to Economic Stability: Malaysian GDP Distribution

Author

Listed:
  • Wesam Salah Alaloul

    (Department of Civil and Environmental Engineering, Universiti Teknologi PETRONAS, Bandar Seri Iskandar, Tronoh 32610, Perak, Malaysia)

  • Muhammad Ali Musarat

    (Department of Civil and Environmental Engineering, Universiti Teknologi PETRONAS, Bandar Seri Iskandar, Tronoh 32610, Perak, Malaysia)

  • Muhammad Babar Ali Rabbani

    (Department of Civil Engineering, Sarhad University of Science & Information Technology, Peshawar 25000, Pakistan)

  • Qaiser Iqbal

    (Department of Civil Engineering, Sarhad University of Science & Information Technology, Peshawar 25000, Pakistan)

  • Ahsen Maqsoom

    (Department of Civil Engineering, COMSATS University Islamabad Wah Campus, Wah Cantt 47040, Pakistan)

  • Waqas Farooq

    (Department of Electrical Engineering, Sarhad University of Science & Information Technology, Peshawar 25000, Pakistan)

Abstract

The construction sector exerts an exceptional impact on economic development all over the world. Adequate buildings and infrastructures made by the construction sector ensure that a country reaches certain targets like social development, industrialization, freight transportation, sustainable development, and urbanization. This study aims to determine the construction sector’s connectivity with other sectors through complex linkages that contribute immensely to the economy and gross domestic product (GDP). The data were collected from the Department of Statistics Malaysia and the World Bank from the year 1970 to 2019, and the Pearson correlation test, the cointegration test, and the Granger causality test were conducted. The vector error correction model (VECM) was created for short-term and long-term equilibrium analysis and impulse response function (IRF) was performed to study construction industry behavior. Afterwards, the forecasting was done for the year 2020 to 2050 of the Malaysian economy and GDP for the required sectors. It was revealed that some sectors, such as agriculture and services, have forward linkages while other sectors, such as manufacturing and mining, are independent of construction sector causality, which signifies the behavior of the contributing sectors when a recession occurs, hence generating significant revenue. The Malaysian economy is moving towards sustainable production with more emphasis on the construction sector. The outcome can be used as a benchmark by other countries to achieve sustainable development. The significance of this study is its usefulness for experts all over the world in terms of allocating resources to make the construction sector a sustainable sector after receiving a shock. A sustainable conceptual framework has been suggested for global application that shows the factors involved in the growth of the construction industry to ensure its sustainable development with time.

Suggested Citation

  • Wesam Salah Alaloul & Muhammad Ali Musarat & Muhammad Babar Ali Rabbani & Qaiser Iqbal & Ahsen Maqsoom & Waqas Farooq, 2021. "Construction Sector Contribution to Economic Stability: Malaysian GDP Distribution," Sustainability, MDPI, vol. 13(9), pages 1-26, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:5012-:d:546346
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    References listed on IDEAS

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    3. Muhammad Ali Musarat & Wesam Salah Alaloul & Lau Siew Cher & Abdul Hannan Qureshi & Aawag Mohsen Alawag & Abdullah O. Baarimah, 2023. "Applications of Building Information Modelling in the Operation and Maintenance Phase of Construction Projects: A Framework for the Malaysian Construction Industry," Sustainability, MDPI, vol. 15(6), pages 1-28, March.
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    5. Hasnah Mohamed & Liu Hui Wen & Farhana Mohd Zaini, 2024. "Environmental Sustainability in Urban Areas Construction Site: Malaysian Perspectives," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(12), pages 4175-4189, December.
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    7. Sławomir Biruk & Piotr Jaśkowski & Magdalena Maciaszczyk, 2022. "Conceptual Framework of a Simulation-Based Manpower Planning Method for Construction Enterprises," Sustainability, MDPI, vol. 14(9), pages 1-13, April.
    8. Carsten Juergens & Fabian M. Meyer-Heß & Marcus Goebel & Torsten Schmidt, 2021. "Remote Sensing for Short-Term Economic Forecasts," Sustainability, MDPI, vol. 13(17), pages 1-23, August.
    9. Fauzan Choon bin Abdullah, 2024. "The Impact of Moderation Analysis Between Effective Project Governance and Project Performance Management in Malaysia's Construction Industry ," GATR Journals gjbssr652, Global Academy of Training and Research (GATR) Enterprise.
    10. Muhammad Ali Musarat & Wesam Salah Alaloul & Muhammad Irfan & Pravin Sreenivasan & Muhammad Babar Ali Rabbani, 2022. "Health and Safety Improvement through Industrial Revolution 4.0: Malaysian Construction Industry Case," Sustainability, MDPI, vol. 15(1), pages 1-26, December.
    11. Mari-Isabella Stan & Dragos-Florian Vintila, 2021. "Can the Degree of Indebtedness of the Economic Agents Operating in the Construction Sector in Constanta County Influence the Development of the Coastal Area ?," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 163-170, August.
    12. Haifa Afieqah Hasbi & Noorsaidi Mahat & Zulhabri Ismail & Siti Suhana Judi & Mohd Iskandar Abd Malek, 2024. "A Review of Key Factors Influencing Extension of Time (EoT) Applications in Malaysian Institute of Architects (MIA) Contracts," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(10), pages 3110-3122, October.
    13. Mari-Isabella Stan, 2021. "Issues concerning the dynamics of labor productivity at the level of the companies in Constanta County operating in the "Construction" sector before and after the COVID-19 pandemic," Technium Social Sciences Journal, Technium Science, vol. 25(1), pages 225-241, November.
    14. Muhammad Ali Musarat & Wesam Salah Alaloul & Nasir Hameed & Dhinaharan R & Abdul Hannan Qureshi & Mohamed Mubarak Abdul Wahab, 2022. "Efficient Construction Waste Management: A Solution through Industrial Revolution (IR) 4.0 Evaluated by AHP," Sustainability, MDPI, vol. 15(1), pages 1-16, December.
    15. Rui Feng & Zhuqing Zhang & Zonghao Li & Ge Meng & Jian Liu, 2024. "Building a Sustainable Future: Enhancing Construction Safety through Macro-Level Analysis," Sustainability, MDPI, vol. 16(17), pages 1-27, September.
    16. Muhd Shafiq Johari & Syamsul Hendra Mahmud & Sarajul Fikri Mohamed & Mohd Saidin Misnan & Tantish Kamarudin & Mohd Azwarie Mat Dzahir, 2024. "A SWOT Analysis of Digitalization in the Construction Firm: Challenges and Barriers to Managers Level in Malaysia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(3), pages 1520-1540, March.
    17. Héctor Hernández & Felipe Ossio & Michael Silva, 2023. "Assessment of Sustainability and Efficiency Metrics in Modern Methods of Construction: A Case Study Using a Life Cycle Assessment Approach," Sustainability, MDPI, vol. 15(7), pages 1-25, April.
    18. M. R. Ibrahim & D. U. Muhammad & B. Muhammad & J. O. Alaezi & J. Agidani, 2023. "The Key to Organizational and construction Excellence: A Study of Total Quality Management," Papers 2305.13104, arXiv.org.
    19. Bieke Gepts & Erik Nuyts & Griet Verbeeck, 2025. "Explorative Short-Term Predictive Models for the Belgian (Energy) Renovation Market Incorporating Macroeconomic and Sector-Specific Variables," Sustainability, MDPI, vol. 17(3), pages 1-23, February.
    20. Ephrem Melaku Getachew & Woubishet Zewdu Taffese & Leonardo Espinosa-Leal & Mitiku Damtie Yehualaw, 2025. "Machine Learning Applications in Sustainable Construction Materials: A Scientometrics Review of Global Trends, Themes, and Future Directions," Sustainability, MDPI, vol. 17(18), pages 1-34, September.
    21. Mari-Isabella Stan & Dragos-Florian Vintila, 2021. "An Investigation of the Structure of Fixed Assets of Construction Companies in the Context of Coastal Area Development," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 171-178, August.
    22. Aawag Mohsen Alawag & Wesam Salah Alaloul & M. S. Liew & Abdullah O. Baarimah & Muhammad Ali Musarat & Al-Baraa Abdulrahman Al-Mekhlafi, 2023. "The Role of the Total-Quality-Management (TQM) Drivers in Overcoming the Challenges of Implementing TQM in Industrialized-Building-System (IBS) Projects in Malaysia: Experts’ Perspectives," Sustainability, MDPI, vol. 15(8), pages 1-21, April.

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