Construction machinery hire rates deviation in Malaysia: an inflation rate effect analysis

Machinery has been used in the construction industry in both small and large scale projects for a long time. Machinery is one of the main components of any construction projects and rates deviation within the hiring of the machinery can result in cost overrun of the project. To deal with the issue of deviating the machinery hire rates in the construction industry, this study has been conducted. The study accesses the machinery hire rates and aims to investigate the percentage deviation from 2013 to 2018, where statistical analysis was performed to identify the influence of the inflation rate in deviating the machinery hire which results in cost overrun. The analysis shows that the inflation rate possesses a weak relationship with nine of the machinery hire rates, where five shows a moderate relationship. It is therefore recommended to observe other factors which deviate the machinery hire rates within the construction industry.

Download Full-text

INFLUENCE OF INFLATION RATE ON MACHINERY HIRE RATES IN CONSTRUCTION INDUSTRY

Journal of Civil Engineering Science and Technology ◽

10.33736/jcest.3342.2021 ◽

2021 ◽

Vol 12 (1) ◽

pp. 39-45

Author(s):

Wesam Salah Alaloul ◽

Muhammad Ali Musarat ◽

M. S. Liew ◽

Abdul Hannan Qureshi

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Inflation Rate ◽

Influencing Factor ◽

Strong Relationship ◽

Nonlinear Behaviour ◽

Cost Overrun ◽

Spearman Correlation ◽

Moderate Relationship ◽

Made In

Cost overrun is encountered in various construction projects and even with various advancement, the issue remains. When cost overrun occurs in any construction project, it not only affects the project also leaves marks on the construction industry as well. Machinery hire rates are important while finalizing the project budget and when the rates change annually it may result in project cost overrun. Due to these facts, this study investigates the effect of inflation rate on machinery hire rates. Inflation is a powerful influencing factor in deviating the prices and the rates which result in cost overrun. Statistical analysis was performed where the Spearman correlation was used as the data possess a nonlinear behaviour. The overall result came significant as the inflation rate showed a strong relationship with 9 machinery hire rates demonstrating that the inflation rate is the most prominent factor in deviating the rates. Three (3) machinery hire rates showed a moderate relationship, whereas 1 showed a weak relationship with the inflation rate. Therefore, a consideration of the inflation rate should be made in budget estimation.

Download Full-text

Inflation rate and labours’ wages in construction projects: economic relation investigation

Engineering Construction & Architectural Management ◽

10.1108/ecam-07-2020-0478 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Muhammad Ali Musarat ◽

Wesam Salah Alaloul ◽

M.S. Liew

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Inflation Rate ◽

Vital Role ◽

Strongly Correlated ◽

Cost Overrun ◽

Content Type ◽

Spearman Correlation Test ◽

Key Resources ◽

The Impact

PurposeLabours are one of the key resources of construction projects having a significant impact on economic development. With time, the construction industry is getting a boom due to numerous construction projects in which labours’ contribution is significant. Project betterment is associated with the project productivity which relates to the labours. Wages play a vital role in retaining labours in the construction industry.Design/methodology/approachThis study focuses on investigating the increasing and decreasing behaviour of labour wages in the construction industry and observing the impact of the inflation rate in deviating labour wages. Initially, the percentage deviation was calculated to observe the changing behaviour of the data and then the Spearman correlation test was used to find the relationship between the inflation rate and the labour wages.FindingsIt is evident that even with a good economy and a stable construction sector, still, the labour wages faced a decline over time, which is a matter of concern. Also, based on the correlation coefficient, it was revealed that several labour wages categories are moderately and strongly correlated with the inflation rate and can impact project cost if the inflation rate is not considered while finalizing the budget. Besides that, the changing behaviour of labour wages due to the inflation rate impacts significantly on gross domestic product (GDP); therefore, it requires vital attention.Originality/valueChanges in labour wages are not considered in budget estimation which drag the project towards cost overrun. This study brings the attention of the stakeholders on the issue with experimental justification. Also, how the inflation rate is affecting the labour wages has also been addressed.

Download Full-text

Inhibiting Factors of Cost Performance in UAE Construction Projects

International Journal of Sustainable Construction Engineering Technology ◽

10.30880/ijscet.2020.11.02.014 ◽

2020 ◽

Vol 11 (2) ◽

Author(s):

Ahmed Salem Ahmed Marey Alhammadi ◽

◽

Aftab Hameed Memon ◽

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Past Research ◽

Cost Overrun ◽

Index Method ◽

Cost Performance ◽

Factors Affecting ◽

Inhibiting Factors ◽

Critical Problems ◽

Structured Questionnaire

UAE construction industry frequently faces poor cost performance which commonly known as cost overrun problem. This problem is resulted from several factors and it is important to identify these cost overrun factors in order to avoid and minimize it. Hence, this paper focused on determined the relevancy of factors affecting cost performance in construction projects of UAE. Through a review of past research works conducted globally, 27 factors of cost overrun were listed and used for developing a structured questionnaire. A survey was conducted with 33 practitioners from client, consultant and contractors organizations involved in handling construction projects in UAE. The respondents were requested to state their perception regarding the relevancy of each of the factors that was perceived in context with cost overrun issue using 5-points Likert scale. The responses were analysed using average index method and the results found that all the 27 factors are relevant with construction industry of UAE in causing cost overrun. These factors can be used for further investigation to uncover critical problems of cost overrun.

Download Full-text

CRITICAL FACTORS VARYING CONSTRUCTION COST

Science and Technology Development Journal ◽

10.32508/stdj.v12i1.2201 ◽

2009 ◽

Vol 12 (1) ◽

pp. 104-117

Author(s):

Tam Thi Minh Nguyen ◽

Thi Hao Cao

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Multiple Linear Regression Model ◽

Construction Cost ◽

Ho Chi Minh City ◽

Cost Overrun ◽

Key Factors ◽

Industry Sectors ◽

The Relationship ◽

Chronic Problem

Construction industry is considered to be one of the most important industries in Vietnam's economy. But many construction industry sectors have been experienced chronic problem as cost overrun. Therefore, a conceptual model of factors influencing construction cost was developed to determine the key factors that cause difference between budget cost and actual cost and some solutions are recommended to be applied to achieve the best outcome of cost. The result of analyzing 216 construction projects completed from 2002 to 2007 by companies located in Ho Chi Minh City indicated 6 main factors varying construction cost: project planners, project executives, economics, political, natural environment, fraudulent and lost. The results of multiple linear regression model confirmed the relationship between these above 6 factors and construction cost with the theories are supported at the statistically significant level of 0.05.

Download Full-text

Effective Selection of Resources for Construction using Program Tool

International Journal of Engineering and Advanced Technology - Regular Issue ◽

10.35940/ijeat.c5411.029320 ◽

2020 ◽

Vol 9 (3) ◽

pp. 2927-2931

Keyword(s):

Construction Industry ◽

Resource Selection ◽

Construction Projects ◽

Cost Overrun ◽

Cost Performance ◽

Programming Tool ◽

Effective Selection ◽

Selection Factor ◽

Selection Of ◽

Indian Scenario

In the Indian scenario construction industry facing a major problem is cost and time overrun. Effective time performance and cost performance are very important to execute the project in a successful manner by keeping them within the prescribed schedule and cost. Overall cost and duration of construction projects affected by the effective resource selection factor. This paper's objective is to rectify the improper selection of resources by a programming tool. Field survey and codebook study did collect the needed data to feed in the programming tool. The prepared tool gets distributed and making to access by every stakeholder of construction projects. This may result in the selection of construction resources as effectively. The term cost overrun in the resource part will be reduced.

Download Full-text

Demystifying performance difference between local and foreign contractors through organisational culture

Built Environment Project and Asset Management ◽

10.1108/bepam-02-2021-0029 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Chipozya Kosta Tembo ◽

Franco Muleya ◽

Emmanuellie Phiri

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Design Methodology ◽

Large Scale ◽

Overall Response Rate ◽

Organisational Culture ◽

Management Style ◽

Content Type ◽

Public Projects ◽

Grade One

PurposeThis research aimed to investigate the extent to which organisational culture is practised in local and foreign contractors in grade one and two categories and how it affects their performance.Design/methodology/approachThe approach for this research was positivist in nature adopting a mono-method of data collection through a survey using self-administered questionnaires. A total of 138 questionnaires were distributed among public clients and large-scale contractors registered in the stated grades, and 112 questionnaires were returned for analysis representing an overall response rate of 81% for contractors and clients.FindingsFindings revealed that in organisational culture, significant differences were found for management style and dominant characteristics of the organisation between local and foreign contractors. Differences were not found for leadership styles, measures of success and organisational glue. Results suggest that for local contractors to perform better, significant changes are needed to their management style and dominant characteristics of their organisations.Originality/valueForeign contractors in the Zambian construction industry are reportedly outperforming local contractors making them preferred contractors on larger public projects accounting for 85% of construction projects by value of works. This study presents the differences in organisational culture between foreign and local firms. It further demonstrates that organisational culture plays a key role in determining performance of a contracting firm. The study presents areas that local contractors can improve in organisational culture in order to remain competitive.

Download Full-text

Factors influencing decisions on delay claims in construction contracts for Indian scenario

Construction Economics and Building ◽

10.5130/ajceb.v14i1.3766 ◽

2014 ◽

Vol 14 (1) ◽

pp. 32-44 ◽

Cited By ~ 3

Author(s):

Nitin Balkrishna Chaphalkar ◽

K. C. Iyer

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Decision Makers ◽

Infrastructure Development ◽

Court Cases ◽

Cost Overrun ◽

Root Cause ◽

Delay Claims ◽

Indian Scenario ◽

Probing Questions

Construction industry in India is second largest next to agriculture. In current era of infrastructure development construction projects occupy a key position. In any construction project contract time and cost overrun is a common feature, which gives rise to claims leading to disputes. These disputes if not handled properly tend to consume time and money of all parties to the contract. To resolve the dispute in optimum time, it is essential to understand the root cause of disputes as early as possible. Hence there is a need of analyzing the disputes scientifically. The present study reveals from the study of arbitration awards that the causes for delay claims can be grouped in domains and the probable decisions to the disputes can be traced through the probing questions considered by decision makers. This paper attempts to identify questions related to disputes for Indian scenario through literature, arbitration awards, court cases and discussions with professionals.

Download Full-text

Analysis of Time and Cost Overrun in Malaysian Construction

Advanced Materials Research ◽

10.4028/www.scientific.net/amr.452-453.1002 ◽

2012 ◽

Vol 452-453 ◽

pp. 1002-1008 ◽

Cited By ~ 12

Author(s):

Chidambaram Ramanathan ◽

Narayanan Sambu Potty ◽

Arazi B Idrus

Keyword(s):

Risk Factors ◽

Time Delay ◽

Construction Industry ◽

Construction Projects ◽

Project Performance ◽

Assessing of Modern Machinaries used by Large Scale Construction Firms for High Cost Construction Projects

International Journal of Innovative Technology and Exploring Engineering - Special Issue ◽

10.35940/ijitee.b1061.1292s419 ◽

2019 ◽

Vol 9 (2S4) ◽

pp. 1-6

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Large Scale ◽

Time Frame ◽

New Venture ◽

After Effects ◽

Construction Firms ◽

Potential Risks ◽

Growing Economy ◽

The One

India is one of fastest growing economy in the world which attracts many foreign investors to our country. With the economy being liberalized, foreign players have a vital stake over our countries growth and it’s after effects. The Construction area has consistently been progressively to this financial development which all in all is an exceptionally divided industry. It needs to impart on a huge scale other related help business lines prone to be materials, types of gear, merchants, providers, subcontractors, customers and furthermore the undertaking plan and funds. All these elements which this sector deals with are subjected to potential risks involved which have to be predicted, monitored and managed. Construction industry has been following method for managing these risks and issues to be arising from a project. They have been managing these risks by foreseeing them with the experience and knowledge that the company has gained over the period of time. But this will be a question for a firm if they diversify or when they enter into any new venture of business domain. The conventional model is the one using the manual techniques for assessing risks involved from the experience, knowledge and competency gained in the business domain. Using Primavera (P6) the risk is been managed by creating several models generated which explains the process of additions of risks, identification of type of risk, calculation of exposure values, calculation of risk impact, assigning the person responsible to the risk, time frame of risk, preparation of control plans if the risk occurs. Finally the results thus obtained from both the methods are been compared and the results

Download Full-text

A critical analysis of unethical professional practices in the construction industry in Southeast Nigeria

10.36265/arejoen.2020.010107 ◽

2021 ◽

pp. 44-48

Author(s):

Anikwe Nnaemeka J ◽

Agha Kalu A

Keyword(s):

Construction Industry ◽

Construction Projects ◽

Due Process ◽

Economic Transformation ◽

Professional Practices ◽

Project Delivery ◽

Maintenance Cost ◽

Cost Overrun ◽

Unethical Practices ◽

The Government

Economic transformation and the provision of basic infrastructure to engender growth and development in any nation is vested in the construction industry hence the massive investment of the government in this sector. However, the expected gains of the construction industry have been eroded by the failure of many construction projects due to unethical professional practices on the part of the construction professionals. This study analyzed the causes and effects of unethical practices on the industry and project delivery with measures to combat the unethical practices among the stakeholders. The study adopted the survey design and a stratified random sampling technique was used to select 140 respondents. A structured questionnaire was designed and administered to construction professionals (Architects, Quantity Surveyors, Builders and Engineers). The relative importance index tool was used to analyse the severity of the factors identified. Findings revealed the absence of punishment for unethical practices (0.94), collusion between officials, consultants and contractors (0.91), availability of loopholes in project monitoring (0.89), weak law enforcement institution (0.87) and greed for money (0.83) among others as major causes of unethical professional practices which have serious effects on the construction industry. The result also revealed poor workmanship and substandard project delivery (0.88), high cost of construction (0.86), the collapse of structures/buildings (0.82), inflated contract sums (0.81), high maintenance cost (0.79), time and cost overrun (0.76) as the extremely severe effects of unethical practices in the industry. Prosecution and punishment of offenders (0.98), the whilstle blower protection policies and rewards (0.84), strengthening of institutionand anticorruption agencies (0.78), award of contracts on merit (0.75) and civil society participation and oversight (0.68) were identified as highly effective measures to curtail unethical professional practices. The study recommends that the government being a major actor should abide by the due process of contract award and letting, using Public Procurement Act (PPA) guidelines in executing all its construction projects. The professionals, contractors and clients’ representatives should also exhibit high professional excellence through adherence to professional ethics and codes of conduct.

Download Full-text