Does volume follow share? The case of the Danish construction industry

Abstract

In 1992, Ranko Bon argued that in highly developed countries the relatively declining economic importance of the construction industry is followed by the absolute decline of its output. The shrinking volume has implications with production capacity that, at a certain point of economic maturity, tends to be added at a slower rate than in the past. By using statistical data of the Danish construction industry, this study attempts to verify Bon's proposition. The absolute decline of housing investments partially supports such a proposition. What is more, since the peak of the mid‐1970s, the addition rate to the capacity of the Danish economy has slowed down.

Keywords:

• Construction industry
• Denmark
• construction investments
• construction output

Acknowledgements

The authors are grateful to Dan Ove Pedersen, formerly of the Danish Building Research Institute, for providing the statistical data. They wish also to thank Ranko Bon for his encouragement and advice in their undertaking the study of Denmark.