Head of the Coordination Council of Engineering Associations warns of the consequences of a continued downturn
۵% Drop in Building Permits Rings Recession Alarm for an Industry That Provides ۱۲% of Iran’s Jobs
- A four to five percent decline in the issuance of building permits across the country
- The construction industry's 12% share of employment and 7% share of gross domestic product
- Emphasis on creating a modern value chain in construction to overcome the recession
According to SAMA, Reza Moghaddasizadeh, head of the Coordination Council of the Country’s Professional and Technical Engineering Associations, citing current economic conditions and existing constraints, reported a noticeable decline in construction activity in recent months. He said: “Official statistics indicate a reduction of about four to five percent in the issuance of building permits across the country.”
Noting that the construction industry accounts for a 12 percent share of employment in the country, he stressed that this decline alone is a factor that could trigger a recession. If the downward trend continues, he warned, it will have irreparable consequences for the labor market and the national economy.
The Need to Move from Traditional Construction to Modern Capacity-Building
Criticizing the country’s traditional model of building construction and delivery, Moghaddasizadeh stated: “Traditional methods no longer meet today’s needs, and we must create a proper value chain in the construction industry—a chain that spans from the supply of materials and support for manufacturers and developers to engineering, delivery, and operation sectors.”
He emphasized that this capacity-building is the key to overcoming the current situation. If the gap between the different parts of this chain persists, he added, given the existing financial constraints, there will be no possibility of sustainable development or achieving the desired results in the field of employment.
Construction’s 7% Share of Gross Domestic Product
The head of the Coordination Council of the Country’s Professional and Technical Engineering Associations went on to highlight the direct link between the construction industry and the macroeconomy, noting: “Contrary to the perception of some who view construction as merely a local activity, this sector accounts for about 7 percent of the gross domestic product, and any reduction in it will have a direct reflection on the country’s macroeconomic indicators.”
Emphasis on Cooperation Across All Sectors to Emerge from Recession
In conclusion, Moghaddasizadeh said that all stakeholders and related institutions must come together to increase the speed and quality of construction. He made clear that the current recession is a serious warning, and if the necessary capacity-building is not carried out, not only will the country’s development come to a halt, but existing employment will also be put at risk.
