An analytical approach to understanding construction cost overruns during COVID-19

Nikhitha Adepu, Sharareh Kermanshachi, Apurva Pamidimukkala, Emily Nwakpuda

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: The building sector is vital to a nation’s economy, as it has a major influence on economic activity and growth, job creations and the advancement of infrastructure. Intricate challenges that are inherent in crises such as the COVID-19 outbreak lead to material scarcities, project delays, labor shortages, escalated expenses, funding challenges, regulatory obstacles and dwindling investment funds, all of which culminate in costs that are in excess of those budgeted. While numerous studies have explored the ramifications of COVID-19 on project budgets, there is little, if any, data available on forecasting the magnitude of this impact. Design/methodology/approach: This investigation seeks to bridge this knowledge deficiency by devising a predictive tool grounded in an ordinal logistic regression method. An online survey was designed and disseminated to gauge the views of construction field experts about the diverse contributors to excessive costs during the viral outbreak, and a predictive tool, crafted from the survey participants’ feedback. Findings: Findings showed that smaller-scale enterprises and contractor-centric establishments faced greater adversities than medium-to-large ones and consultancy-or-owner-type entities. Originality/value: The insights from this research shed light on the amplified risk of higher project costs amid health crises or analogous events, underlining the imperative need for fortified risk management approaches to bolster project outcomes. By factoring in demographics, this research offers policymakers a refined lens through which to customize interventions and promote balanced and enduring advancement in the construction industry.

Original languageEnglish (US)
JournalSmart and Sustainable Built Environment
DOIs
StateAccepted/In press - 2024

All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Architecture
  • Cultural Studies
  • Renewable Energy, Sustainability and the Environment
  • Building and Construction
  • Urban Studies

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