We often hear that the construction industry is the motor of the Maltese economy. The truth is that the industry is important but not as important as it is often made out to be.

The industry directly contributes about four per cent of GDP at basic prices. It also generates demand from other sectors and has an income multiplier effect. However, when we compare the contribution of the construction industry with that of other industries we should consider the direct effect only. Otherwise, we will have to take account of the other industries’ indirect effects and income multipliers, in which case, the share of the construction industry may even be lower, given that much larger industries, such as tourism, are also likely to have high inter-industry linkages and income multipliers.

We have to remember that a large proportion of materials used in construction are imported. These include cement, electricity and plumbing fittings, apertures, tiles, air conditioners, furniture and others. The inter-industry linkages therefore are not as high as they used to be when the buildings were mostly made of local stone and imported supplies were minimal. Also, the employees nowadays are mostly foreign workers, probably paid a minimum wage or possibly less, dampening the income-multiplier injections in the economy as a whole.

However, even if the economic contribution of the construction industry was higher, one has to keep in mind that it has many downsides, mostly of an environmental and social nature. Let us mention some of these.

Many contractors are not the most considerate of people. On most construction sites, various disturbances and discomforts to the neighbourhood occur which could be avoided if the law is properly observed and enforced.

Residents living near building sites often have to endure dust emissions, loud noise, use of polluting machinery and vehicles and workers yelling and shouting (because they are not generally given communication devices).

The construction industry has many downsides, mostly of an environmental and social nature

Also, the vicinity of the building site, as well as nearby roads, are often fouled with building debris and, during excavation time, with soil and mud that gets stuck in vehicle tyres. Bricks, stone slabs and other materials, which are heavy to move, are often left lying on nearby pavements.

If allowed, many contractors would probably not hesitate to build in green areas, particularly if they could buy land at a cheap price and then manage to obtain a building permit. This has been done many times, to the detriment of the physical environment in Malta. As a result, Malta has a very high proportion of built space.

Although contractors deal in millions of euros, they often penny pinch.

Many of them carry and lift their materials in old polluting vehicles and cranes.

Old pieces of tattered cloth is used by some contractors to (cynically) give the impression that they are observing the law in reducing dust emissions and in covering the loads of construction materials they carry on trucks.

They use anything they find to display no parking signs, including old pieces of wood, bricks and even old chairs. Steel mesh is often used as temporary barriers, sometimes with dangerously protruding edges.

This penny pinching uglifies the surroundings and often also poses serious health hazards to people working on the site and others too.

Sometimes, vehicles and cranes emitting diesel fumes are left with the engine running, polluting the air in the neighbourhood.

These and many other inconveniences caused by the construction industry should be counterbalanced against the financial gains, most of which are pocketed by the contractors themselves, when assessing the contribution of the construction industry. There is nothing wrong in making profit but this should not be done at the serious expense of the quality of life due to environmental and social harm.

These arguments should not be construed as a proposal that we should ban construction activity but that suitable policies and measures should be adopted to seek a balance between the financial gain of an economic activity and its social and environmental impacts.

In the case of the construction industry, this requires strict enforcement of construction regulations and a better understanding on the part of the authorities as to what sustainable development truly means.

Lino Briguglio is a professor of economics.