There is no gain saying the fact that Downturn in the Construction Industry is bound to have negative effect on employment generation. In this Paper Presentation at the 11th Triennial National Delegates Conference of Construction 8: Civil Engineering Senior Staff Association – CCESSA, at Immaculate Royal international Hotel Ltd Owerri, lmo State. on the 8th of November 2018. Prof. Godwin ldoro of the Department of Building, University of Lagos, Akoka Lagos Nigeria, examined the performance of the Industry for the Past five (5) years and Challenges that a Downturn poses to the Government at all levels while enjoining Stake Holders to put up measures to support the establishment of 008 in Nigeria.
The Federal Government of Nigeria declared that the economy of the nation was in recession shortly after the 2015 elections. The declaration implied that the economy was in a difﬁcult financial situation in which expected income could not meet expected expenditure. The main causes at the recession were the short fall in the volume of crude oil exported and the tall in the price of crude oil in the international market. The recession was as expected accompanied by retrenchment, unemployment, high exchange rate of local currency and contraction in Gross Domestic Product (GDP). Government claim of economic recession was based on a continuous decline in GDP of the nation between the first quarter of 2016 and the first quarter of 2017.
In the second quarter of 2017, the Federal Government through the National Bureau of Statistics (NBS) pronounced on end to economic recession. The pronouncement was based on a claim of steady increase in GDP. According to NBS, the GDP of Nigeria witnessed a positive growth of 0.72% in the second quarter of 2017, 1.17% increase in the third quarter of 2017, 2.1 1% increase in the fourth quarter of 2017 and 1.95% in the ﬁrst quarter of 2018. Based on the development, NBS claimed that the period of economic recession was over in the second quarter of 2018 and that Nigeria moved to economic recovery which is the next stage of economic growth. The understanding now is that the economy has not fully recovered but on the path to sustainable growth which is the last stage of economic growth.
Although, stakeholders in the construction industry do not have cause to disagree with the claim however, the questions arising ore ‘what does the present state of economic recovery mean to the construction industry? What does economic recovery imply to the construction industry? How has the construction industry faired in the period of economic recovery? This paper ascertains whether or not there is a downturn in the construction industry, the challenges of a downturn and how the industry can cape with the challenges.
THE FEATURES OF THE CONSTRUCTION INDUSTRY
The construction industry is acclaimed globally as the driver of economic growth. It exhibits a number of features which are derived from either its products, participants or the environment in which it operates. Some of the features are the high value and size of projects (Odusami and Ameh, 2009) that hamper its contribution to economic growth and development; low capital base on the part of contractors and consultants which makes private sector funding of projects difficult.
The uniqueness of its products which makes costs difficult to compare and easy to inflate (Odusami and Ameh, 2009); the fragmented structure which separates designs from construction of projects; the long period involved in the delivery of projects which makes loans and grants to be difficult to obtain; overlap in the functions of professionals involved in construction which has brought about unhealthy professional rivalry, tension, conflicts and competition; involvement of numerous complementary, but now competing professionals which makes it difficult to determine the professional to hold responsible for a success or failure; numerous permits and approvals which are subject to abuse (Odusami and Ameh, 2009); the high accident and injury rates and low workers’ productivity which increases the cost of construction.
Other features are poor quality standards which make buildings and civil engineering projects to fail during or after construction; high cost-overrun which makes the cost of projects difficult to estimate at the design stage; high time-overrun which makes project completion unpredictable, unnecessary bureaucratic bottlenecks associated with projects especially those procured by government who incidentally is the major client which make projects to drag beyond normal; abnormal secrecy or conﬁdentiality in project information which makes it difficult for stakeholders and the general public to detect fraudulent practices; involvement of numerous parties that are literate and non-literate, professionals and quacks that makes accountability and responsibility difficult; high risks which discourages private sector involvement in project financing; high incidents of collapse or failure of both building and civil engineering structures that question the capacity and capability of project team members, a corrupt society and economy to which the construction industry is part and lastly, the incessant abandonment of projects which causes a waste in investment on projects and contributes to project failure.
This article was originally published in the Nigeria Construction Digest Vol 1 No. 6 July, 2019
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