Analyzing the potential local and distant economic loss of global construction sector due to water scarcity

Abstract

Global water scarcity poses a significant threat to economic production, especially within resource-intensive sectors such as construction. It is essential to assess the potential local economic output loss from water scarcity in the construction sector and the distant repercussions from upstream sectors for sustainable construction practices. Our study aims to evaluate the potential local economic output loss in the construction sector due to water scarcity, taking into account spatially heterogeneous environmental flow requirements. Additionally, we quantify the distant impact from upstream sectors using a multi-regional input-output model. This study emphasizes the need to identify countries, sectors, and national sectors severely affected by water scarcity using potential economic loss per unit of output value. The results indicate that the construction sectors in Gabon, the Czech Republic, and the Central African Republic are the most severely affected by water scarcity. The potential distant economic loss in the construction sector primarily stems from the quarrying of stone, sand, and clay sector, as well as the non-metallic mineral products sector. Hotspots at the national-sector level are also identified. The findings of this study can help policymakers in the construction sector identify key countries affected by water scarcity and determine the sources of these risks.