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Macroeconomics and the Construction Sector: Evidence from Portugal

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  • Leonida Correia
  • Maria Joao Ribeiro

Abstract

Construction activity is considered one of the primary indicators of a country’s global economic evolution. This article aims to study the cyclical fluctuations of construction production and its relationship with the aggregate business cycles in Portugal over the last six decades. We started by analysing the evolution of an indicator set inherent to the functioning of the construction sector. Then, we extracted the construction output cycles and examined their association with the Portuguese business cycles since the 1960s, focusing on crisis periods. The results demonstrate that the construction sector contributes significantly to the Portuguese economy and the cyclical construction activity fluctuations correlate strongly with the aggregate fluctuations, albeit with greater instability. Finally, we discuss the current problems the construction sector faces and the COVID19 pandemic effects.

Suggested Citation

  • Leonida Correia & Maria Joao Ribeiro, 2023. "Macroeconomics and the Construction Sector: Evidence from Portugal," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 9(1), pages 9-26, January.
    • Handle: RePEc:ate:journl:ajbev9i1-1
    DOI: 10.30958/ajbe.9-1-1
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    References listed on IDEAS

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