The Impact of Construction Industry in the Development of Nigeria

1.1 Introduction

The construction industry is a driver of growth in other sectors due to its heavy reliance on an extended and varied supply chain. All other sectors of the economy like manufacturing, agriculture, entertainment, transportation, education, health, sports, etc depend on construction industry as well as the construction industry relying on them for performance. The construction industry has ability to impact on other sectors because of its nature of being infrastructure provider. There is no sector that does not depend on physical infrastructure produce by the construction industry for its production (UKCG, 2009). Construction usually is done or coordinated by general contractors, who specialize in one type of construction such as residential or commercial building. They take full responsibility for the complete job, except for specified portions of the work that may be omitted from the general contract.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of technical terms.

1.2 Background of Study

Construction performance and productivity improvement are the focus areas in construction industry for any nation. Productivity is expressed in many ways but generally as the ratio of output to resources which are consumed to produce that output. Productivity is the average direct labour hours required to install a unit of material. In construction, labour productivity is often expressed as a number of labour hours per unit of work; and or the quantity of work performed by a crew during a standard eight-hour day (Fagbenle, Ogunde and Owolabi, 2011). In a broader sense, it may also measure how much value a worker adds to the economy per unit time.

Productivity in the construction industry is of importance to the economic health of a nation. Labour productivity has always been a key issue for project managers to improve their project results and productivity studies are getting special emphasis in developing countries (Musamil and Khurshid, 2014). A primary task in construction is to bring about a climate conducive for management, workforce and resources to combine effectively and efficiently towards raising productivity, which is achieving a given level of output with fewer inputs, while also providing high reward to those involved (Harris and McCaffer, 2001).

The construction industry is one of the most labour intensive industries and human resources cover a large proportion of the project cost. Particularly, the construction industry in Nigeria has remained largely non-mechanized with heavy reliance on large number of manual workers (Aina and Omoniyi, 2014). Labour is defined as a task that requires the exertion of body and mind (Fagbenle, Ogunde and Owolabi, 2011), and remains the most essential and complex resources that the construction manager will have to deal with. The unprecedented rise in construction demand, shortage of skilled construction workers, enervating weather conditions, complexity of the construction process, poor supervision and delays in receiving instruction have been cited as contributing to the decline in labour output in Nigeria construction sector (Fagbenle, Adeyemi and Adesanya, 2004), and that of the developing countries like New Zealand (Page and Norman, 2014).

Failure by project managers to effectively motivate operatives has been identified to cause productivity to decline. Those managers that seek to understand human behaviour and apply the principles of motivation theory to motivating the construction workers can and nearly always benefit through improved productivity. The construction manager is expected, among other things, to develop ability to motivate and develop the spirit of teamwork among them as workforce motivation is an important aspect in achieving an environment of good industries relations.

Lai (2009) opined that motivated employees are the cornerstone of any successful enterprise. Understanding motivation theory and being able to apply this theory to the labour force plays an important role in increasing productivity (Gonzalez, 1991). Corroborating this assertion, Fagbenle, Ogunde and Owolabi (2011) affirmed that researchers have suggested that in order to have any meaningful improvement in construction workers’ performance, contractors must study the peculiarities of their workers and also identify their main motivators. Labour productivity has always been an issue for project managers in order to produce results. Concerns have also been raised about the choices of particular scheme either financial or non-financial, whether incentive schemes actually raise construction workers output in all circumstances, and the measurement of the actual impact generated (Abdusalam, Faki and Dardau, 2012).

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Impact of Construction Industry in the Development of Cross River State.

1.3 Statement of Problems

Investigation revealed that the construction industry in Nigeria is still largely labour intensive and most empirical studies have, unfortunately, revealed that the output of the industry is quite low when compared with many developed countries (Fagbenle, Adeyemi and Adesanya, 2004; Aina and Omoniyi, 2014). Workmen’s productivity is central to cost and time performance of construction projects. There have been frequent delays and cost overruns in construction projects and poor productivity has been identified as one major contribution (Siriwardena and Ruwanpura, 2012).

Construction workers represent a very important asset in construction industry and the ability of a company to retain its employees is associated with its ability to recognise their contribution to the achievement of company goals (Aina, 2014).

Furthermore, the productivity of individuals, which in turn affects the productivity of a firm, is a very important consideration because it measures a firm’s competitive power. It is an indicator of a firm’s profit margin, a measure of the firm’s survival in business, a yardstick for remuneration of employees, and a means of recognition of hard work (Aiyetan and Olutuah, 2006).

1.4 Aim and Objectives of Study

The aim of the study is to examine the Impact of Construction Industry in the Development of Cross River State Nigeria. In achieving this aim, the following specific objectives were laid out as follows:

1. To establish the relationship between construction industry and socio-economic development of Nigeria;
2. To examine the factors affecting the use of incentive schemes on building sites in the study area;
3. To assess the level of use of selected incentive schemes on building sites in the study area; and
4. To determine the relationship between the use of incentive scheme and workers’ productivity level for selected building operations.

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Are there factors affecting the use of incentive schemes on building sites in the study area?
• What is the relationship between construction industry and socio-economic development of Nigeria?
• What is the level of use of selected incentive schemes on building sites in the study area?
• What is the relationship between the use of incentive scheme and workers’ productivity level for selected building operations?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: There is no significant relationship between construction industry and socio-economic development of Nigeria
• H1: There is a significant relationship between construction industry and socio-economic development of Nigeria

Hypothesis Two

• H0: There is no significant factor affecting the use of incentive schemes on building sites in the study area
• H1: There is a significant factor affecting the use of incentive schemes on building sites in the study area

1.7 Significance of Study

The study has been observed that most contracts in Cross River State has its inability to keep to the targeted contracted period of time and it all turns out in the increment of stipulated period and associated excessive cost maximization thereby causing unwanted and unnecessary delay. Furthermore, the impacts of the causes of the delays of these construction projects have to be known and solutions identify in other to minimize it, if possible rectify the faults.

This study will be of immense benefit to researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

1.8 Scope of the Study

The scope of the research is focused on the Impact of Construction Industry in the Development of Nigeria using Cross River State as a case study.

1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

1.10 Definition of Terms

Client: This is the project owner, he who bears the financial burdens of the projects. He inputs all other parties to the project and the outcome of the project belongs to him as the end product must be to his satisfaction.

Consultant: These are the group of specialists consulted to provide profession services in most construction project, the following are part of the numerous consultants: Architects, Quantity Surveyors, Structural and Service Engineers, Estate surveyors, Builders etc.

Contractor I Builder: This is the successful bidder. He is responsible for the proper execution of the work in accordance with the contractual documents and agreements.

Critical Path: This is a series of work processes / activities that cannot be compressed between now and the end of the project.

Damages: These are financial compensation recoverable by the inquiring party to the contract.

Effect: It is a change produced by an action or cause, a result of an outcome either positively or negatively.

Project: This is a temporary Endeavour undertaken to create a unique product or service. It has peculiar characteristic, which include high risk, limited time frame, instability and flexibility, pro-effectiveness, goal directed and uniqueness.