The impact of the construction sector in economic growth in Palestine

	The impact of the construction sector in economic growth in Palestine
magazine of college Administration&Economics for economic &administration & financial studies
Article 1, Volume 205, Issue 16, 2016, Pages 54-65
Abstract
Abstract: This study aims to understand the role of construction sector in Palestine. The construction sector is one of the leading sectors in the Palestinian economy, which plays an essential role in economic growth, value added and employment with the highest wage average. It can enhance investment, effective demand and includes high potential demand. On the other side, this sector suffers from a structural distortion and problem as a results of the long term dependency to the Israeli economy, wrong policies, real estate speculation and land confiscation. In addition, high population growth rate, political instability and increased labor service exports caused a high prices and speculation in this sector. We measure the sector impact on growth in the Palestinian economy. We use each gross fixed capital formation (GFCF), total labor, labor in construction sector as percentage to total labor and finally construction as percentage to GFCF, as independent variables, and the gross domestic product as dependent variable. We proof our hypothesis that there is a positive relationship between labor and capital in construction sector and economic growth in Palestine. In addition, our results show that the Palestinian economy and construction sector are labor intensive.
Keywords
Construction Sector; Economic Growth and Palestine

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