Investigating the Causality Relationship between Construction Flows and Aggregate Economy: Evidence from Sudan

Abstract

This research examined the lead-lag relationship between construction output and total GDP in Sudan applying the Granger causality test. The analysis employed data pertaining to the performance of the Sudanese economy during the period prior to the secession of Southern Sudan 1982- 2009. The results of this research reveal that construction flows tend to be
driven by economic growth, not vice versa. This implies that the construction sector is growth-dependent and not growth-initiating. The magnitude of this relationship has been interpreted in a form of a formula derived, applying the
Johansen Co-integration test, to demonstrate the long-run equilibrium between construction flows and total GDP in the Sudan.