A Better Modelling and Assessment of Key Factors Affecting Cost Performance of Building Projects: The Case of New Zealand

Abstract

Project cost plays an important role in a project’s success, and is an aspect of high concern to the project stakeholders. Although some studies have been undertaken to investigate the influencing factors of project cost, because of the continuous development in the field, this study is regarded as adding value to the construction industry in New Zealand. This study focuses on exploring the significant factors influencing project cost. The objectives of the study are to identify, assess and analyse the effects of the influencing factors on the cost of a project. A questionnaire survey was carried out among a selection of clients and developers. Structural equation modelling techniques were adopted to analyse the collected data. The results conclude that of all these four constructs, namely market conditions, key stakeholders’ influences, building and construction regulations, and the external economic environment have a significant effect on building project costs. These factors should be appropriately monitored and controlled in a cost management situation in order to achieve project success. These findings attempt to help the industry management by identifying the key cost drivers and applying appropriate management techniques or interventions to enhance project cost performance.