Construction machinery hire rates deviation in Malaysia: an inflation rate effect analysis
DOI:
https://doi.org/10.7764/RDLC.20.1.91Keywords:
percentage deviation, inflation rate, correlation coefficient, construction industry, machinery hite ratesAbstract
Machinery has been used in the construction industry in both small and large scale projects for a long time. Machinery is one of the main components of any construction projects and rates deviation within the hiring of the machinery can result in cost overrun of the project. To deal with the issue of deviating the machinery hire rates in the construction industry, this study has been conducted. The study accesses the machinery hire rates and aims to investigate the percentage deviation from 2013 to 2018, where statistical analysis was performed to identify the influence of the inflation rate in deviating the machinery hire which results in cost overrun. The analysis shows that the inflation rate possesses a weak relationship with nine of the machinery hire rates, where five shows a moderate relationship. It is therefore recommended to observe other factors which deviate the machinery hire rates within the construction industry.
Downloads
References
Rahman, A., & Rozaini, N. (2020). Project Risk Based Evaluation for Infrastructure Works in Qatar: Highway Projects. Proceedings of the International Conference on Civil Infrastructure and Construction (CIC 2020), Qatar University, Doha, Qatar, 2-5 February, 2020.
Rahman, I. A., Memon, A. H., Nagapan, S., Latif, Q. B. A. I., & Azis, A. A. A. Time and cost performance of costruction projects in southern and cenrtal regions of Penisular Malaysia. 2012 IEEE Colloquium on Humanities, Science and Engineering (CHUSER) (pp. 52-57), IEEE, Kota Kinabalu, Malaysia, 3-4 December, 2012.
Alaloul, W. S., Liew, M. S., Zawawi, N. A. W. A., & Kennedy, I. B. (2020). Industrial Revolution 4.0 in the construction industry: Challenges and opportunities for stakeholders. Ain shams engineering journal, 11(1), 225-230.
Alaloul, W. S., Liew, M. S., Zawawi, N. A. W., Mohammed, B. S., Adamu, M., & Musharat, M. A. (2020). Structural equation modelling of construction project performance based on coordination factors. Cogent Engineering, 7(1), 1726069.
Alaloul, W. S., Musarat, M. A., Liew, M. S., Qureshi, A. H., & Maqsoom, A. (2021). Investigating the impact of inflation on labour wages in Construction Industry of Malaysia. Ain Shams Engineering Journal. In press.
Alaloul, W. S., Musarat, M. A., Liew, M. S., & Zawawi, N. A. W. A. (2019, August). Influential safety performance and assessment in construction projects: a review. AWAM International Conference on Civil Engineering (pp. 719-728). Conference proceedings AICCE 2019. LNCE, Volume 53. Springer, Cham.
Alinaitwe, H., Apolot, R., & Tindiwensi, D. (2013). Investigation into the causes of delays and cost overruns in Uganda's public sector construction projects. Journal of Construction in Developing Countries, 18(2), 33.
Aljohani, A. (2019). Cost overrun causality model in Saudi Arabian public sector construction projects (Doctoral dissertation).
Aljohani, A., Ahiaga-Dagbui, D., & Moore, D. (2017). Construction projects cost overrun: What does the literature tell us?. International Journal of Innovation, Management and Technology, 8(2), 137.
Altaf, M., Musarat, M. A., Khan, A., Shoukat, Z., & Salahuddin, U. Change order impact on construction industry of Pakistan. AWAM International Conference on Civil Engineering (pp. 391-402). Conference proceedings AICCE 2019. LNCE, Volume 53. Springer, Cham.
Amusan, L. M., Afolabi, A., Ojelabi, R., Omuh, I., & Okagbue, H. I. (2018). Data exploration on factors that influences construction cost and time performance on construction project sites. Data in brief, 17, 1320-1325.
Assaad, R., El-Adaway, I. H., & Abotaleb, I. S. (2020). Predicting Project Performance in the Construction Industry. Journal of Construction Engineering and Management, 146(5), 04020030.
Aziz, R. F. (2013). Factors causing cost variation for constructing wastewater projects in Egypt. Alexandria Engineering Journal, 52(1), 51-66.
Bayram, S., & Al-Jibouri, S. (2016). Efficacy of estimation methods in forecasting building projects’ costs. Journal of Construction Engineering and Management, 142(11), 05016012.
Catalão, F. P., Cruz, C. O., & Sarmento, J. M. (2019). The determinants of cost deviations and overruns in transport projects, an endogenous models approach. Transport Policy, 74, 224-238.
Endut, I. R., Akintoye, A., & Kelly, J. (2009). Cost and time overruns of projects in Malaysia. retrieved on August, 21, 243-252.
Enshassi, A., Al-Najjar, J., & Kumaraswamy, M. (2009a). Delays and cost overruns in the construction projects in the Gaza Strip. Journal of Financial Management of Property and Construction, 14(2), 126-151.
Enshassi, A., Al‐Najjar, J., & Kumaraswamy, M. (2009b). Delays and cost overruns in the construction projects in the Gaza Strip. Journal of Financial Management of property and Construction, 14(2), 126-151. https://doi.org/10.1108/13664380910977592
Erusta, N. E., & Sertyesilisik, B. (2019, May). An Investigation into Improving Occupational Health and Safety Performance of Construction Projects Through Usage of BIM for Lean Management. Eurasian BIM Forum (pp. 91-100). Springer, Cham.
Firouzi, A., Yang, W., & Li, C.-Q. (2016). Prediction of total cost of construction project with dependent cost items. Journal of Construction Engineering and Management, 142(12), 04016072.
Fulton, B. (2019). Interpreting Correlations. Interpreting Correlations. Retrieved from https://www.staymetrics.com/2019/09/interpreting-correlations/
Goyal, S. (2017). Effect of inflation on project costs in Rajasthan. Proceedings of SARC-CAN International Conference. University Rajasthan, New Delhi, India, 12th March, 2017.
Haslinda, A. N., Xian, T. W., Norfarahayu, K., Hanafi, R. M., & Fikri, H. M. (2018, April). Investigation on the factors influencing construction time and cost overrun for high-rise building projects in penang. Journal of Physics: Conference Series (Vol. 995, No. 1, p. 012043). IOP Publishing.
Jaya, I., Alaloul, W. S., & Musarat, M. A. (2021). Role of Inflation in Construction: A Systematic Review. In Proceedings of the International Conference on Civil, Offshore and Environmental Engineering (pp. 701-708). Springer, Singapore.
Johnson, R. M., & Babu, R. I. I. (2020). Time and cost overruns in the UAE construction industry: a critical analysis. International Journal of Construction Management, 20(5), 402-411. https://doi.org/10.1080/15623599.2018.1484864
Kaliba, C., Muya, M., & Mumba, K. (2009). Cost escalation and schedule delays in road construction projects in Zambia. International journal of project management, 27(5), 522-531.
Khodeir, L. M., & El Ghandour, A. (2019). Examining the role of value management in controlling cost overrun [application on residential construction projects in Egypt]. Ain Shams Engineering Journal, 10(3), 471-479.
Klakegg, O. J., & Lichtenberg, S. (2016). Successive cost estimation–successful budgeting of major projects. Procedia-Social and Behavioral Sciences, 226, 176-183.
Kornbrot, D. (2005). S pearman's Rho. Encyclopedia of Statistics in Behavioral Science.
Le-Hoai, L., Dai Lee, Y., & Lee, J. Y. (2008). Delay and cost overruns in Vietnam large construction projects: A comparison with other selected countries. KSCE journal of civil engineering, 12(6), 367-377. https://doi.org/10.1007/s12205-008-0367-7
Le, N., Chong, O., & Sullivan, K. (2020). Construction Risks in Developing Countries: A Vietnam Case Study. Journal for the Advancement of Performance Information and Value, 12(1), 30-49.
Leavitt, D., Ennis, S., & McGovern, P. (1993). The cost escalation of rail projects: Using previous experience to re-evaluate the CalSpeed estimates (Working Paper No. 567). Berkeley: University of California, Berkeley, Institute of Urban and Regional Development.
Mashwama, X., Aigbavboa, C., & Thwala, D. (2016). Investigation of construction stakeholders’ perception on the effects & cost of construction dispute in Swaziland. Procedia engineering, 164, 196-205.
Memon, A. H., Abdul Rahman, I., Aziz, A., & Asmi, A. (2014). Assessing causal relationships between construction resources and cost overrun using PLS path modelling focusing in Southern and Central Region of Malaysia. Journal of Engineering and Technology, 4(1), 67-68.
Memon, A. H., Rahman, I. A., Zainun, N. Y., & Abd Karim, A. T. (2014). Web-based risk assessment technique for time and cost overrun (WRATTCO)–A framework. Procedia-Social and Behavioral Sciences, 129, 178-185.
Minitab. A comparison of the Pearson and Spearman correlation methods. Retrieved from https://support.minitab.com/en-us/minitab-express/1/help-and-how-to/modeling-statistics/regression/supporting-topics/basics/a-comparison-of-the-pearson-and-spearman-correlation-methods/
Musarat, M. A., & Ahad, M. Z. (2016). Factors Affecting the Success of Construction Projects in Khyber Pakhtunkhwa, Pakistan. Journal of Construction Engineering and Project Management, 6(4), 1-6.
Musarat, M. A., Alaloul, W. S., & Liew, M. (2020a). Impact of inflation rate on construction projects budget: A review. Ain Shams Engineering Journal, 12(1), 407-414.
Musarat, M. A., Alaloul, W. S., Liew, M. S., Maqsoom, A., & Qureshi, A. H. (2020). Investigating the impact of inflation on building materials prices in construction industry. Journal of Building Engineering, 32, 101485.
Musarat, M. A., Alaloul, W. S., Liew, M., Maqsoom, A., & Qureshi, A. H. (2021). The Effect of Inflation Rate on CO2 Emission: A Framework for Malaysian Construction Industry. Sustainability, 13(3), 1562.
Musarat, M. A., Alaloul, W. S., Qureshi, A. H., & Altaf, M. (2020, November). Inflation Rate and Construction Materials Prices: Relationship Investigation. In 2020 International Conference on Decision Aid Sciences and Application (DASA) (pp. 387-390). IEEE.
Musarrat, M. A., Inderyas, O., Khan, S., & Shah, A. A. (2017). Causes of delay in the execution phase of construction projects in khyber pukhtoonkhwa pakistan. Sarhad University International Journal of Basic and Applied Sciences, 4(1), 62-70.
National Construction Cost Centre (N3C). (2019). Machinery Hire Rates. from CIDB, Malaysia http://myn3c.cidb.gov.my/cidb_n3c/output/a_web_mne_details.php?4
Niazi, G. A., & Painting, N. (2017). Significant factors causing cost overruns in the construction industry in Afghanistan. Procedia Engineering, 182, 510-517.
Oghenekevwe, O., Olusola, O., & Chukwudi, U. S. (2014). An assessment of the impact of inflation on construction material prices in Nigeria. PM World Journal, 3(4), 1-22.
Olawale, Y. A., & Sun, M. (2010). Cost and time control of construction projects: inhibiting factors and mitigating measures in practice. Construction management and economics, 28(5), 509-526.
Paraskevopoulou, C., & Benardos, A. (2013). Assessing the construction cost of Greek transportation tunnel projects. Tunnelling and underground space technology, 38, 497-505.
Paul, V. K., & Saigal, D. Cost Overrun Risks in Infrastructure Projects: Case of Hydroelectric Projects. Journal of Civil Engineering and Environmental Technology, 6(2), 68-74.
Ranjithapriya, R., & Arulselvan, S. Study on Factors Affecting Equipment Management and its Effect on Productivity in Building Construction. International Journal of Engineering Research & Technology (IJERT), 9(4), 223-230.
Rashid, Y. (2020). Analysis of delay factors and their effects on construction projects. Management Science Letters, 10(6), 1197-1204.
Samuel, M., & Okey, L. (2015). The relevance and significance of correlation in social science research. International Journal of Sociology and Anthropology Research, 1(3), 22-28.
Shehu, Z., Endut, I. R., Akintoye, A., & Holt, G. D. (2014). Cost overrun in the Malaysian construction industry projects: A deeper insight. International Journal of Project Management, 32(8), 1471-1480.
Sohu, S., Abdullah, A. H., Nagapan, S., Buriro, A. A., & Ullah, K. (2018). Stakeholders’ Perception on Critical Cost Variation Factors in Malaysian Building Projects. Civil Engineering Journal, 4(9), 2075-2081.
Statista. (2019). Malaysia: Inflation rate from 1984 to 2024. Retrieved from https://www.statista.com/statistics/319033/inflation-rate-in-malaysia/
Tang, C. F. (2014). The effect of real wages and inflation on labour productivity in Malaysia. International review of applied economics, 28(3), 311-322.
