This paper discusses the changing role of the construction sector at various stages of economic growth and development, it argues that construction activity follows the bell-shaped pattern of development of the manufacturing sector, its primary supplier and the old engine of economic growth. Although the construction technology is shifting towards the service sector, the new engine of economic growth, the construction sector remains technologically less dynamic than other major economic sectors. The paper also discusses broad patterns of international trade in construction services and materials. It argues that less developed countries may play an increasingly significant role in international trade as global construction activity shifts to these countries from the advanced industrial countries with abundant physical capital already in place.