Project Management Research Impact of Construction Material

Question: Discuss about the Project Management Research Impact of Construction Material. Answer: An investigation into the impact of construction material price fluctuations on the construction industry in Dubai, United Arab Emirates between the year 2004 and 2016 Price fluctuations refer to changes in the prices of a commodity over a period of time. These changes can either be an increase or decrease in prices of a given commodity. Changes in commodity prices can have a very huge impact on an industry in general. The construction industry has also been affected by the unexpected changes in the prices of materials required for construction purposes. According to the Association General Contractors (AGC) of America, between the year 2004 and 2008, the world experienced a succession of steep increase in prices of various materials. The recession of 2009 also saw many construction projects put on hold or canceled. This was as a result of increased competition which brought about global decrease in the prices of construction costs (Schmidt, 2009). Prices for some construction materials change regularly in the short term while for other products they may not change for over a period of one year. For example according to data from the Dubai chamber of commerce, the year 2012 saw changes in prices of various commodities. An example is the price of diesel fuel which had increased by 3.4% in the month of September. However, between September 2011 and September 2012, it increased by 39.4%. Another example is the price of copper and brass. The prices of copper had decrease by a margin of 0.7% between the month of August and September 2011. However, on average, the prices of copper and brass mills had increased by 14.9% over the year between September 2010 and September 2011. In Dubai during the second quarter of the year 2013, the prices of bricks increased by a margin of 11.3%. This was after prices declining continuously over the previous four months. In the United Arab Emirates and specifically Dubai, the effect of these changes i s also being experienced. According to the economic research journal published in April 2016, the prices of steal in Dubai increased by 6.6% in the first quarter of the year. From the statistics discussed above, its quite clear that the changes in the prices of materials used in construction affect the construction industry in general. This study will therefore seek to determine the impact that this changes have had on the construction industry in Dubai between the years 2004 and 2016. The fluctuations in prices of construction commodities are caused by very many factors. The changes in prices may be due to changes in costs of production of commodities, increase in taxation. Another factor that could affect the prices of commodities is legislation. Laws governing and controlling production of commodities by the government may drive the price of construction commodities up or down. For example the government may set very high regulations on quality of iron metal used in construction. These high standards by government institutions and industry regulators lead to decline in supply of that material. This decline in supply will in turn lead to increase in the price of that particular construction material. The changes in labor costs also have an impact on the construction industry ( Skolnik, Brooks Oman,2013). Labor cost is one of the most significant aspects of direct costs incurred by construction companies. This is because the construction industry is labor intensive in addition to wages being high in this industry. Inflation or economic recession of an economy is another significant factor that affects the prices of construction materials. Inflation is the continuous rapid increase in prices of a commodity over time. Economic recession occurs when the prices of commodities decrease rapidly over a period of time. This is caused by a combination of various economic factors (Levy, 2008). The research topic on the impact of fluctuations in prices of construction commodities on the construction industry is important to a project manager in many various ways. One of the ways in which this research will help project managers is in determining whether changes in prices of construction materials causes delay or termination of construction project. Delay and termination of many construction projects is a very common scenario in the construction industry globally. This delay in the construction projects affects the project managers and the owners in different ways. Delay or stalling of construction projects results into loss of income that the owners of the projects would have accrued in case the project was completed in time. Through this research therefore, the mangers of projects will be capable of determining whether changes in prices of construction materials will affect the rate of completion of the project. After determining this, the project manager will be able to put appropriate measures in place which could prevent this scenario from taking place. One of the measures that project managers can take is to sign contracts that have a cl ause that caters for price changes in construction materials during the course of the construction project. Another importance of this research project to construction project managers is that construction project managers will be able to estimate the costs that the company may incur during the time the construction project will be going on. Some construction projects are short term while others may be long term. This will depend on the size of the project being undertaken by the project manager. The changes in the prices of commodities in the construction industry will affect both the long term and short term projects but the effect is greater in projects that continue for a long time. Therefore, when construction project managers are able to identify the effect that the changes in prices of construction materials have on their projects, they are able to forecast the costs that they will incur over the course of the project and the possible changes that may occur to this costs. This will therefore assists project managers in drawing up their construction projects (Bastianelli, Ness West, 2008). Thirdly, investigation of impact of price fluctuations of construction projects on the construction industry in Dubai will assist project managers in making decisions on procurement. Once the project managers determine the effects that changes in prices of construction materials have on the construction industry, the project managers will be able determine on whether to buy the construction materials locally or import the materials. This will important because it will affect the overall costs of the projects. Since the fluctuations of prices of construction materials may lead to contractors resulting to buying cheaper low quality materials, construction project managers will be able to make decisions on where to buy the materials and the specifications and standards required. This will ensure that the construction project managers do not compromise on the quality and standards of materials they use in construction due to changes in prices. Project managers will therefore be able to m aintain and ensure standards while at the same time minimizing costs (Kelleher Abernathy, 2010). References Bastianelli, A. L., Ness, A. D., West, J. D. (2008). Federal government construction contracts. Chicago, Ill, Forum on the Construction Industry, American Bar Association. Ferraro, J. (2012). Project management for non-project managers. New York, NY, Amacom. https://public.eblib.com/choice/publicfullrecord.aspx?p=881959 Kogon, K., BlakemorE, S., Wood, J. (2015). Project Management for the Unofficial Project Manager: A FranklinCovey Title. Dallas, Texas, BenBella Books, Inc. https://public.eblib.com/choice/PublicFullRecord.aspx?p=1922361. Levy, S. M. (2008). Construction superintendent's operations manual. New York, McGraw-Hill. https://search.ebscohost.com/login.aspx?direct=truescope=sitedb=nlebkdb=nlabkAN=219518. Project Management Institute. (2008). A guide to the project management body of knowledge (PMBOK guide). Newtown Square, Pa, Project Management Institute. Schmidt, T. (2009). Strategic project management made simple: practical tools for leaders and teams. Hoboken, N.J., John Wiley Sons. https://www.123library.org/book_details/?id=9115 Skolnik, J., Brooks, M., Oman, J. (2013). Fuel usage factors in highway and bridge construction.