THE ROLE OF THE CONSTRUCTION INDUSTRY IN EMPLOYMENT GENERATION AND POVERTY ALLEVIATION IN PAKISTAN

Abstract

Unemployment and poverty are persistent socio-economic challenges in Pakistan, exacerbated by rapid population growth and uneven economic performance. Between 2015 and 2024, the unemployment rate increased from approximately 3.57% to 5.5%, while poverty levels rose to around 25.3% in 2024–2025 (Pakistan Bureau of Statistics [PBS], 2023; World Bank, 2025). A large proportion of the unemployed population consists of unskilled and semi-skilled workers, whose opportunities are limited in export-oriented sectors that primarily demand skilled labor. This study examines the construction sector as a strategic avenue for employment generation and poverty alleviation due to its labor-intensive nature and capacity to generate both direct and indirect employment. Government-led infrastructure projects, private sector construction activities, housing schemes, urban development initiatives, and energy projects have contributed significantly to workforce absorption. Subcontracting practices, renovation, and interior works further enhance employment opportunities. Adopting a mixed-methods approach, the study analyzes secondary data from 2015 to 2025 sourced from the Pakistan Bureau of Statistics, Economic Surveys of Pakistan, and international organizations. Quantitative trend analysis assesses unemployment, poverty, and construction sector performance, while qualitative content analysis evaluates policy frameworks, investment conditions, and sector-specific challenges. Findings indicate that rising material costs, supply chain disruptions, and inconsistent government policies constrained sector performance, particularly during 2021–2025. The study concludes that targeted policy reforms, regulatory simplification, and strengthened public-private partnerships are critical to enhancing the construction sector’s role in sustainable employment creation and poverty reduction in Pakistan.