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Construction Development, Economic Evolution, and Environmental Impact in Ecuador

Abstract:

The construction industry has for many years been a cornerstone in the world economy, and serves as a reliable indicator of a country’s economy since its evolution is pro-cyclical, i.e., it behaves just as the total production does. This chapter focuses on the impact of the Ecuadorian construction sector’s performance on the GDP, as well as its possible relationship with the energy consumption. Hence, this study examines construction, economic, and environmental variables in the Ecuadorian context. With this objective, different indicators such as the GVA, energy demand, and electricity consumption have been considered and compared, during the period from 1997 to 2020. The analysis uses Pearson's correlation coefficient to measure the statistical relationship between the variables. The results confirm that the increase in Ecuador's economy is directly related to the increase in the construction sector, which in turn has a direct influence on the energy expenditure and consumption by different sectors, and specifically, by residential buildings, which shows a directly proportional dependence. In other words, the increase in the country's economy generates a greater amount of construction, which in turn consumes more energy and therefore, is more environmentally polluting.