An Analysis of Factors Determining the Viability of Locally Owned Construction Firms in South West Nigeria

Abstract

Locally owned construction firms (LOCOFs) is strategic to national development and its viability is germane to a virile economy. To this end, this paper identified and examined various factors determining the viability of LOCOFs. A sample size of 65 staff of 31 LOCOFs out of a total survey of 117 staff of 59 LOCOFs that were awarded building contract in selected institutions in South west Nigeria were accessed for this study. Thirty seven factors influencing the viability of construction business were identified from literature and staff of LOCOFs requested to rate each factors on a 5 point like rt scale of importance. Relative importance index and factor analysis were used to identify and summaries the most important factors. Nine of the 37 factors influence the viability of LOCOFs most and the three topmost factors were: organisational competence (relative importance index (RII) = 0.88), cash for construction work (RII = 0.87) and quality of work and services (RII = 0.86). Also, 11 component factors were obtained from the factor analysis to describe the determinant of the viability of LOCOFs. Three topmost factors of the 11 were: effective management of individual project (9.27%); improved construction method (8.86%); and clients’ satisfaction related issues (8.46%). These factors when well harness could significantly improve the viability of LOCOFs with a resultant expected positive impact on the construction business.