Impact of Money on Price Direction of Building Materials in Abuja

Abstract

The mechanism for the expansive birthing of developmental infrastructure to service human settlement need is construction. This research evaluates practitioner’s insight on money supply and demand for money among other tested macroeconomic indicators as it impacts building materials prices direction in Abuja Nigeria. The study made use of quantitative research technique. Prices of selected building materials obtained from Federation of Construction Industry’s quarterly publication. Statistical data on macroeconomic indicators were obtained from the official gazette of the Central Bank of Nigeria and Nigeria Bureau of Statistics. Multiple linear regression analysis was used to establish the relationship between Money Supply and Prices of Building Materials. Result revealed the demand for money with mean item score (MIS) of 4.38 and demand for goods with MIS of 4.94 as the most critical factors causing change in money supply and demand for money respectively. The coefficients of determination (R2) were very high for the selected building materials. Sandcrete block was the most significant factor with R2 value of 0.967 (97%) which means that the percentage variation in the prices of building materials could be explained by money supply. While the P –values confirmed that money supply has high negative impact on prices of building materials with cellotex ceiling board value of 0.000 as the highest while demand for money has a statistically negligible impact. The finding will alert practitioners on how money supply causes variation in prices of building materials and assist them in the planning and control of the rising prices of building materials. It will also bring to awareness that demand for money triggers money supply which significantly affect the procurement of building in Nigeria.