Impact of Economic Recession on the Growth of Construction Firms in Abuja, Nigeria.

Abstract

Economic recession has badly affected the construction industry so much that there is hardly any new projects coming on stream. This has resulted into redundancy in Nigeria’s construction industry while many construction firms have practically laid off their staff. The aim of the study was to assess the impact of economic recession on growth of construction firms in the Nigerian construction industry in Abuja, Nigeria. To achieve the aim, the study set out to: identify and assess the causes of economic recession; examine the effects of economic recession; and examine measures for preventing the reoccurrence of economic recession in the Nigerian construction industry. Questionnaire was used to collect data from 22 construction firms registered with Federation of Construction Industry (FOCI). Data were analysed using Relative Importance Index (RII). Findings from analysis revealed that the most important causes of economic recession are “Over dependent on oil” and “Wars” (RII = 0.88 and 0.85 respectively) out of the 28 causes identified. It was also shown that “Job Loss” is the most important effect of economic recession with RII of 0.89. 7 out of the 8 measures identified for preventing reoccurrence of economic recession , ranging from “Expansionary monetary policy – cutting interest rates” to “Higher Inflation Target” with RII ranging from 077 – 0.68 are very effective. It was therefore concluded that economic recession has a significant impact of on the growth of construction firms in Abuja. It was thus recommended that Government and construction firms should work out an implementable framework for the adoption of the measures for preventing the reoccurrence of economic recession in the Nigerian construction industry.