The Nexus of Monetary Variables on Construction Prices

Abstract

Increased competition amidst cash crunch calls for a better understanding of the effect of monetary variables on the prices of construction materials. This is because the success or otherwise of construction projects is largely dependent on price variations. Using a multimethod approach, this paper assesses the influence of monetary variables on prices of construction materials. An analysis of the F-statistics shows a significant relationship between variables (0.05 significant level and R2 of 0.8) of the construction materials under review. Furthermore, the F-values show that the predictive value align with observed values at 95% confidence level for some of the materials. Based on the forgoing, the study recommends the establishment of monetary frameworks to guard against sudden changes in fiscal policy. The outcome of the study would be useful to the government in regulating the macro economy through the use of macroeconomic variables.