PURPOSE: the paper is intended to explore and examine the rate of development in real estate and its effect on utilization of building materials the case of Addis Ababa. The paper is prepared to initiate academic and policy debate in the area of construction material manufacturing, utilization and its linkage to the economy of developing countries in general. The rapid development in construction sector in Addis Ababa significantly altered the manufacturing of construction material. The construction of highrise building, the building permit regulation and rising land market have significantly changed the local building material usage and the construction technology in Addis Ababa. The government of Ethiopia has responded construction boom in the country by providing and promoting an exemption of import duties on building material. Given the levels of construction in the city, there remains much more scope for using increasing locally produced building materials efficiently – in terms of benefits from construction boom, rapid economic development and urbanization.

DESIGN / METHODS FOLLOWED/ APPROACH: The paper uses secondary data on the quantity of construction materials that the building construction completed and handled to the client. The buildings constructed in the last five years were considered in the study. The official data for local materials produced and the import of construction materials was collected from the Central Statistical Office and Custom. Five different building with different functions and types were purposively selected for the study assuming different construction needs and quantity and the heights of the buildings.

FINDING: The research finding will be the main topics of discussion for policy dialogue. The change in building constructed in Ethiopia has increased the use of imported materials. The policy of the government has considerably supported the importation of building materials other than creating local capacity. If such materials are produced locally the construction sector as well as building material manufacturing could contribute increasingly greater economic opportunities.

RESEARCH LIMITATIONS: The research is limited construction of buildings greater than five floors, the empirical finding refers only the sampled buildings, the decomposition of local and import building is based on professional assessments.

PRACTICAL IMPLICATIONS: The paper could provide policy impulse in the rethinking of the construction material manufacturing sector, exemption of import duties, import substitution strategy and the policy towards construction sector in general. The amalgamation of the mass of building material creates as “Building”. If one consider transporting such a mass to that specific site one can simply judge how much cost is devoted to building materials and transport.

ORIGINALITY: There is no much work done in area of the economic significant of building materials in developing countries. The manufacturing sector is well developed elsewhere in developed countries and no need for import of such bulk materials. The case study is conducted on actual information and validity is checked with the certificated of construction.