In 1985 the construction sector generated 4.9 percent of national income, and the construction materials industry produced 6.7 percent of gross industrial output. Mongolian statistics indicated that approximately 28,200 workers were involved in construction projects and that 8,500 workers were employed in the manufacture of construction materials in 1985. Mongolian statistics, however, were misleading because they did not include the role of military and foreign labor in the construction sector. The Soviet Union and, to a lesser extent, East European countries and China, played a key role in constructing Mongolia's infrastructure. The Erdenet combine, for example, was built by a 14,000-strong joint Mongolian-Soviet work force that included military construction troops and workers of the Soviet construction company, Medmolibdenstroy. Other Soviet construction companies working in Mongolia included the joint-stock company, Sovmongolpromstroy, which built industrial facilities, and Mongolenergostroy, which constructed electric lines and power stations. In the mid-1980s, Mongolian construction teams undertook 40 percent of construction work Soviet and other Comecon countries undertook the rest. China provided laborers to help build up Mongolia's transportation and industrial infrastructure in the 1950s, but such aid ceased with the SinoSoviet rift in the 1960s (see Socialist Construction Under Tsedenbal, 1952-84 , ch. 1). In addition, in the 1980s Mongolian military construction troops were involved in building many industrial, agricultural, and other facilities (see Economic Role , ch. 5).

In the late 1980s, the construction sector was plagued by substandard work, delays in completing projects and in installing equipment, and shortages of labor and building materials. To alleviate these problems, the Eighth Plan called for increasing total construction and installation work by 26 to 29 percent, for raising the work performed by Mongolian construction teams by 42 to 44 percent, and for increasing labor productivity by 20 to 22 percent. Manufacture of construction materials was to increase by 160 to 170 percent, and labor productivity in the construction materials industry, by 36 to 38 percent. Measures to increase construction efficiency were recommended, including channeling capital investments into priority projects reducing construction times and the amount of incomplete construction improving coordination among planning, construction, and supply organizations and their clients creating specialized enterprises for rural construction work and improving working and social conditions for construction workers in order to reduce labor shortages.

Data as of June 1989