Nexus of economic recession and building construction cost in Nigeria

Abstract

Economic recession became pronounced in the year 2008 to 2009 when the annual growth rate of Nigeria dropped from over 9% to 6.7% leaving macroeconomic variables such as GDP growth rate, oil price, exchange rate, unemployment and underemployment, inflation, external reserve. Relatively unstable. This study is aimed at examining the influence of economic recession on building construction cost in Nigeria. Secondary data were obtained from Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and archival data on prices of building materials from building materials merchants. The data were analysed using inferential statistics and it was revealed that the indicators of economic recession (inflation rate, prime exchange rate, prime lending rate, and gross domestic product (GDP)) and price of building construction materials and crude oil have strong influence on building construction cost in Nigeria. It was thus concluded that economic recession was not anticipated by the Nigerian government and as such relevant strategies to neutralize the effect of the economic recession that can stabilize construction materials prices and macroeconomic variables was not in place. It was thus recommended that; petrol pump price and crude oil should be regulated to prevent its resultant effects on construction cost and that viable fiscal policies should be instituted by government to prevent future occurrence of recession.