Review of Selected Macroeconomic Factors Impacting Building Material Prices in Developing Countries – A Case Of Nigeria
High prices of building materials had form a crucial constraint to improving construction procurement in Nigeria. The influence of the macro-economic indicators on this problem cannot be ruled out. This study therefore investigates the impact of macro-economic indicators on the prices of building materials with a view to enhancing construction project procurement and delivery. Questionnaires were administered to respondents which included the Architects, Quantity Surveyors, Builders, Engineers, Bankers/Economist. The study established that inflation, exchange rate, import, interest rate, money supply and demand for money have a significant effect on the prices of building materials. Demand for import, inflation rate, government economic policies, level of foreign currency demand and level of foreign currency supplied were identified as causing a change in exchange rate while factors affecting inflation rate were variation in the value of the naira, demand for goods, changes in real in comes lending interest and import tariffs. On the other hand, factors causing a change in interest rate were government economic policies, demand for money, inflation rate, deregulation of interest rate. It was found that a high relationship existed between exchange rate, inflation rate and interest rate and the prices of building materials. The study recommended reduction in import duties, bringing exchange rate to the barest minimum, reduction in interest rate on banks loans while government should maintain stable inflationary trend.
Keywords: Macro-Economic factors, Construction projects, Procurement, prices, Building Materials, Delivery