Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.13/929999

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Title
The impact of oil price regimes on construction cost in Nigeria
Author/Creator
Olatunji, Oluwole Alfred
Institution
The University of Newcastle. Faculty of Engineering & Built Environment, School of Architecture and Built Environment
Description
Construction costs in Nigeria are often high and unpredictable. The pattern of variability is not explained by inflationary indices of common goods and services, but rather it is reactive to boom-and-burst shocks that are triggered by oil price regimes. Pearson’s correlation analysis is deployed to examine the relationships between the dynamics of crude oil price regimes (volume of crude oil export and price), selected indices of macrovariability—lending rate (prime), inflation rate and aggregate GDP growth, and supply deficit (demand–output gap) of local cement production. Analysis shows that construction cost is high because of high cost of finance and wild volatility that are stimulated by frictions in oil price regimes. Moreover, while the Nigerian construction industry shows positive growth and significant contribution to aggregate GDP growth in the past decade, the oil industry has persistently failed to trigger positive GDP growth. Furthermore, the variables under examination (as listed above) are also subjected to regression analysis to develop a mathematical model for predicting construction costs, relative to crude oil shock and defined macrovariability indices. Recommendations are made on how to avoid multicollinearity in similar studies and for areas of further studies.
Relation
Construction Management and Economics Vol. 28, Issue 7, p. 747-759
Publisher Link
http://dx.doi.org/10.1080/01446191003725162
Date
2010
Publisher
Routledge
Keyword(s)
oil economics;  construction costs;  macrovariability;  gross domestic product;  national income
Resource Type
journal article
Identifier
http://hdl.handle.net/1959.13/929999
Identifier
ISSN:0144-6193
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Subject
"Construction Management and Economics"
 
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