Impact of Materials Price Fluctuation on the Execution of Building Projects in Abuja, Nigeria.
The Nigerian construction industry faces significant obstacles in its growth due to the prevailing unpredictable and erratic price fluctuations of materials and unsatisfactory compensation practices. The alarming rate of fluctuation claims on material prices leads to disputes in building projects, adversely affecting project cost, time, and quality performance. This fluctuation in building material costs poses a considerable threat to both the construction sector and aspiring homeowners.
This study aimed to assess the influence of materials price fluctuation on the performance of building projects in Abuja, Nigeria. By examining causative factors and their effects on project performance, investigating the impact of materials price fluctuation claims on project cost and time performance, and establishing strategies for minimizing the effects of materials price fluctuations.
The survey design approach was adopted using quantitative data, and 189 respondents completed well-structured questionnaires. Additionally, archival data on material price fluctuation claims in completed building projects (23 projects) within the study area were collected. The collected data were analyzed using Percentages, Relative Important Index (RII), Mean Item Score (MIS), and Pearson Correlation Moment.
The study found that the main factors responsible for material price fluctuations included the exchange rate of the national currency, cost of transportation, inflation of building materials prices, and the cost of energy (electricity, gas). Furthermore, materials price fluctuation claims positively correlated with total project cost and time, with coefficient strengths (r values) of 0.95 and 0.62, respectively.
In light of the findings, the study recommends taking decisive actions to stabilize the exchange rate, reduce the cost of energy, and regulate the cost of production. Contractors should also prioritize appropriate planning, maintain up-to-date information, make payments within stipulated timeframes, and understand project requirements.
This research provides valuable insights for building construction contractors, enabling them to make informed decisions regarding material prices and contingencies. By implementing the recommended strategies, stakeholders can mitigate the adverse effects of materials price fluctuations and enhance the overall performance of building projects in the Nigerian construction industry.
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