Growth, employment and the construction industry in Trinidad and Tobago

Trinidad and Tobago is a small open oil- and gas-based economy that has experienced the effects of boom and bust and the associated fluctuations in income and employment. This paper focuses on the behaviour of the construction sector and its relationship to income and employment over the last three decades in this small oil-rich economy. In the boom period the construction sector grew twice as fast as the rest of the economy. Similarly, during the recession the construction sector contracted faster than any other sector, providing proof that the multiplier operates in both directions. The correlation coefficient between construction labour productivity and per capita GDP for the period 1973-2002 was 0.70. As pertains to employment in construction per thousand population and per capita GDP, the correlation coefficient was 0.94.