AN IDIOGRAPHIC APPROACH TO ASSESSING RISK FACTORS IMPACTING ON CONSTRUCTION CONTRACTORS’ CASH OUT FORECASTS

Purpose: Research has shown that construction contractors face challenges when attempting to manage their present and future financial requirements via cash flow (CF) forecasting and/or the use of cash flow forecasting (CFF) models. Consideration for risk factors impacting on CF forecasts/CFF models has also been identified as a key issue affecting contractors’ application of CFF models. This study assessed the risk factors prevalent in the idiographic setting ofrenovations of primary health care buildings in Kaduna state Nigeria.Design/Methodology: A list of risk factors that impact on CF forecasts were identified through the review of existing literature. The identified risk factors were then investigated in relation to the likelihood of occurrence and the impact on CF forecasts, if they occur. Data was collected via a questionnaire survey of contractors who had been engaged in carrying works of renovating primary health care (PHC) buildings in Kaduna state Nigeria. The questionnaire survey focused on determining the likelihood of occurrence/impact of thirty-one (31) risk factors on cash-out forecasts. Contractors were asked to rank on a scale of 0 to 5 the likelihood of occurrence/impact of the risk factors. The responses obtained were subjected to analysis with the use of IBM SPSS (version 21) software. The mean, standard error and standard deviation were computed. The computed means were used to rank the likelihood of occurence/impact of the factors in decending order.Findings: Nineteen (19) risk factors were found to significantly impact cash-out forecasts- “change in management”, “non-inclusion of project in yearly budget”, “increased duration of the project”, “change in currency exchange rates”, “high cost of materials”, among others.Research Implications: The findings from the research imply that several risk factors have different degree of occurrence on cash-out forecasts in, and different degree of impacts on cash-out forecasts in the Nigerian construction industry.Originality/Value: Construction contractors carrying out renovation works in Kaduna state Nigeria should expect positive variations to their “cash-out” forecasts during the execution of projects. Major recommendations include; contractors should carefully consider the nineteen (19) risk factors affecting “cash-out” before embarking on any construction renovation project.