The impact of the Zambian economy (2015 – 2017) on the sustainability of the construction industry
Date
2019
Authors
Manzi, Lindi Emmanuel
Journal Title
Journal ISSN
Volume Title
Publisher
University of Zambia
Abstract
The construction industry is a composite sector with wide range of products, services and technologies that play an important role in economic growth of a country. The Zambian economy suffered an economic downturn in the period of 2015 – 2017 arising from global and domestic headwinds in more than a decade. The aim of the study was to investigate the impact of the 2015 – 2017 economic recession on the construction industry sustainability in Zambia and propose a framework to address the key effects identified for the industry’s sustainability. The study adopted quantitative research approach and primary data collected through questionnaire survey, which was administered to 50 respondents. Interviews were used to support the questionnaire. The data were analysed using descriptive statistics and average index method to rank the strategies used by Zambian construction firms to survive the economic downturn. The study identified; delayed approval of invoices by the client (public), delayed payment to contractors and consultants and limited availability of funding as the prominent effects to the Zambian construction industry in the 2015 – 2017 economic recession. Spearman’s correlation indicated low investment from government (rs =.930**), low investment from private investors (rs=.898**) and delayed approval of invoices by Client (Private) (rs=.857**) as most ranked effects with a positively strong relationship between their frequency and severity. The most utilized strategies were implementing stricter financial management on company cash flow (Mean=3.64); implementing stricter site management to reduce material & time wastage (Mean=3.52) and employing on a contract basis (Mean =3.50). The results of the survival strategies were classified into short-term and long-term strategies that formed part of the framework to assist Zambian Construction Company survive future economic downturns. The study concluded that 2015 – 2017 economic recession had a negative impact on the Zambia construction industry. Firms based on their financial status and operational capacity may use the established framework. The study recommends that government should liquidate contractors and consultants in economic recession.
Keywords: Economic downturn, strategies, construction industry, Zambian, framework
Description
Keywords
Economic conditions--Zambia , Construction industry --Zambia