Investigation on the Influence of Building Materials Price Fluctuation on Cost of Building Products in Nigeria

Volatility in the fluctuation of prices of building materials has made price forecast on the cost of the materials less reliable in building project management in Nigeria. In the light of this, the study examines the causes of the constant increase in the prices, as well as the implication of the price fluctuation on building projects in the study area. Survey research designs used to gather information for the study are non-parametric in nature. Data were analyzed using chi-square and likert scale to rank the various factors involved in the price fluctuation, as well as the effects of the variation on building projects respectively. Other analytical tools are price index for the rate of changes in the prices of the materials from time to time on average, and simple regression analysis for the relationship between changes in the average price of building materials and the average house rent within the last ten years. Findings reveal that inflation, force of demand and supply, and exchange rate, as economic factors among others are the most significant ones responsible for the building materials price fluctuations in the study area. Difficulty in forecast and planning, project cost overrun, as well as shortage and high cost of accommodation however, are found as the most common effects of the building materials price fluctuations. Besides, the mean un-weighted aggregate price index, and the mean house rent index for each of the successful year are discovered to be 11.02% and 8.73% respectively. Increase in the aggregate price of the building materials however caused approximately a proportional increase in the house rent, especially in the early part of the period. The variables therefore have a positive and linear relationship with the regression model of Y=5776+0.98xi, as derived from Equ.6. It is therefore recommended that research, development and improvement on local material resources be encouraged by the government and the construction stakeholders with legislative instruments against the importation of the basic building materials in Nigeria. Nevertheless, an appropriate framework designed with the aggregate building materials price indices, the model relationship between the effect of change in the aggregate price of the building materials and the consequent change in the residential house rent should be adopted in the management of building projects; for effective forecast and planning of the projects towards sustainable delivery in the study area.