Construction industry makes significant contributions to the socio-economic development process of a country. Its importance emanates largely from the direct and indirect impact it has on all economic activities. It contributes to the national output and stimulates the growth of other sectors through a complex system of linkages (UNEP, 1996). UNEP further observes that the industry consumes one-sixth to one half of the world’s wood, minerals, water and energy. It contributes to employment and creates income for the population and has multiplier effects on the economy.
Road construction, in particular, plays a significant role in realizing economic development and for the expansion of investment. The role of construction of roads is crucial for sustainable development. Road development is also essential with the perspective of saving of time, minimizing traveling expenses and improving services in trade, education and health sectors. For the realization of sustainable social and economic development, building new roads, maintaining and upgrading of the existing ones is vital (BOFED, 2002).
Likewise, the construction industry has important contributions to the Ethiopian economy, as demonstrated by its share in the GDP. For instance it can be seen from Table 1.1 below that the share of the Construction sector in the total national GDP has been increasing and averaged at about 5.4 percent in the period 2000/01- 2009/10 (NBE, 2013).