Resilience Index Framework for the Construction Industry in Developing Countries

The construction industry in many developing countries is considered the main engine for economic growth. Quantification of the resilience of the construction industry in developing economies is essential for stakeholders and decision makers. Many researchers have attempted to quantify the construction industry's resilience in the context of developed economies; however, there is lack of established measures of such quantification in developing countries. This paper proposes a framework for the composition of an index that quantifies the resilience of the construction industry in developing countries. The proposed framework is demonstrated in the context of three developing countries: Rwanda, Egypt, and Turkey. The index is composed of measures such as the construction value added to a country's gross domestic product (GDP) and employment in construction. Principal Component Analysis (PCA) is utilized for weighting and aggregation of the individual variables. Studying the causal relationship between construction growth and economic development from 1971 to 2022, results show that construction growth leads to economic development in each of the three countries. Results of the proposed index values indicate that the construction industry in each of the three countries demonstrated increased resilience by sustaining both its outputs and its employment generation aspect in the two years following the coronavirus pandemic in 2019. Quantification of the construction industry's resilience in countries where the construction growth leads to the economic growth would provide a crucial insight for stakeholders and decision makers.