International Trade in Services.pdf - DSpace at Khazar University

178 International Trade in Services
Box 6.1: The Main Characteristics of the Construction Service Sector
The role of the construction service sector is especially pertinent in the daily lives of
people because it provides the physical infrastructure for personal shelter, sanitation,
water and electricity distribution, schooling, health services, transportation, and private
sector activities. It is one of the major service sectors in most economies in terms
of employment and value added. Global spending on construction, broadly defined,
is likely to have exceeded US$4 trillion in 2005 (Tulacz 2005). This would represent
roughly 9–10 percent of world gross domestic product (GDP). In a study of gross
value added of GDP in construction services in 75 countries, Ruddock and Lopes
(2006) find that the mean is 6 percent (figure 6.1). In large economies of the Organisation
for Economic Co-operation and Development (OECD), the sector represents
6–9 percent of total employment, which illustrates its intensive use of labor (Geloso
Grosso, Jankowska, and Gonzales 2008).
The sector is associated with a limited number of large international companies
and a large number of local small and medium-size companies. In 2007, the top 225
international contractors generated US$827 billion in revenue, of which US$310 billion
represented exports (ENR 2008). Of these 225 companies, 51 were Chinese, and
23 were Turkish. Brazil; Egypt; India; Israel; Kuwait; Lebanon; the former Yugoslav
Republic of Macedonia; Mexico; Pakistan; the Russian Federation; Saudi Arabia; Serbia;
Taiwan, China; and the United Arab Emirates each had one to three companies on
the list. The world’s largest international contractor, Hochtief AG, generated US$21.3 bil -
lion in exports, while the 225th largest international contractor, China National Electronics
Import & Export Corporation, generated US$62.3 million. The ranking of
Figure 6.1. Construction Services: Mean Gross Value Added in GDP,
75 Countries
mean percentage of GDP in construction
7.0
6.5
6.0
5.5
5.0
4.5
< US$1,000 US$1,000–US$2,500 US$2,500–US$10,000 > US$10,000
GDP per capita
Source: Ruddock and Lopes (2006).