Assessment of Economic Sustainability in the Construction Sector: Evidence from Three Developed Countries (the USA, China, and the UK)

Abstract

The construction sector plays a significant role in contributing to uplifts in economic stability by generating employment and providing standardized social development. Economic sustainability in the construction sector has been less addressed despite its wide applicability in the economy. This study aimed to perform a comparative analysis to determine the application of a circular economy in the construction sector toward economic sustainability, along with its long-term forecasting. A time series analysis was used on the construction sector of the United States of America (USA), China, and the United Kingdom (UK) from 1970 to 2020, by taking into account individual effects to propose a framework with global validity. Statistical analysis was performed to analyze the dependence of the construction sector and determine its short- and long-term contributions. The results revealed that the construction sectors in these countries tend to bounce back to equilibrium in the case of short-term effects; however, the construction sector behaves differently with respect to each sector after experiencing long-term effects. The results show that the explanatory power of the forecasting model (R2) was found to be 0.997, 0.992, and 0.996 for the USA, China, and the UK. Based on the concept of the circular economy, it was concluded that the USA will become a leader in attaining sustainability in construction owing to its ability to recover quickly from shocks, and that the USA will become the largest construction sector in terms of GDP, with a USD 0.3 trillion higher GDP than that of the Chinese sector. Meanwhile, there will be no significant change in the construction GDP of the UK up to the end of 2050. Moreover, the speeds of the construction sector toward equilibrium in the long run in the USA, China, and the UK, and regaining of their original positions, is 0.267%, 1.04%, and 0.41% of their original positions, respectively. This study has a significance in acting as a guideline for introducing economic and environmental sustainability in construction policies, because of the potential of the construction sectors to recover from possible recessions in their respective countries.