Influence of COVID-19 pandemic on local construction firms’ viability

Abstract

Purpose This paper aims to assess COVID-19 (C-19) pandemic influence in the 37 factors identified from extant literature as factors influencing the viability of local construction firms (LCFs). Design/methodology/approach A sample size of 65 staff of 31 LCFs that were awarded construction projects contracts in institutions in Nigeria was purposefully selected and accessed based on relevant predetermined criteria. Respondents’ views on factors determining the viability of LCFs were obtained. Factors known to be influenced by C-19 are 25 of the 37 factors rated on a five-point Likert scale of importance by the respondents. Mean scores were used to rank the factors and principal component analysis was used to obtain key component factors (CFs) influenced by the C-19 pandemic. Findings Six of the first ten “extremely important” and “very important” factors are known to be influenced by C-19 pandemic. A total of 8 CFs having 20 variables with factor loadings of more than 0.5 each were known to be influenced by C-19. The C-19 pandemic influenced LCFs’ cash flow and management of construction labour, plant and equipment amidst variables that had above 0.8 factor loading. Research limitations/implications A limitation of this study is the inability to conduct close contact interview during this period to obtain personal views on the influence of C-19 on LCFs. However, this does not reduce the quality of findings of this study, as there are valid literature basis hinging this study findings. Practical implications The paper recommends that all stakeholders pay prompt attention to the factors adversely affected by the C-19 pandemic to improve or at the least sustain the viability of LCFs. Originality/value This paper fulfils a present pertinent need of assessing the influence of the C-19 pandemic on various factors influencing the viability of construction firms.