The Effect of Timely Delivery of Construction Projects on the Economic Growth in Sri Lanka

Abstract

Economic growth is the increase in the production of goods and services in the economy from one time period to the next. Construction, as the sector with the biggest multiplier effect, has helped continue to accelerate Sri Lanka's economic growth. Timely construction output generates socioeconomic growth and wealth generation in a country. Delays are one of the major issues in the construction industry in Sri Lanka, which can have an ultimate impact on the growth of the national economy. Therefore, the research aims at investigating the effect of the late completion of construction projects in the public sector on the factors contributing to economic growth in Sri Lanka. A mixedmethod approach was adopted, using preliminary interviews and questionnaires as data collection techniques. The collected data was analyzed using manual content analysis and the relative importance index (RII). Twenty (20) factors contributing to the economic growth in Sri Lanka were identified through both literature and preliminary interviews. Among them, Foreign Direct Investment (FDI), external debt, an effective procurement system, open direct assessment, and a proper system of transportation are themost important factors, as highlighted by the respondents. The impact of the delay in completion of public sector construction projects on the identified factors was identified through the questionnaire and classified into three levels: less impacted (RII < 50%), averagely impacted (50% < RII < 70%), and highly impacted (RII > 70%). Including foreign direct investment, credit to the private sector, a proper system of transportation, the material price index, imports and exports, and the service sector overall, twelve factors have been dispersed between 0.65 and 0.70, which represents an overall percentage of 60%. So the findings validate that there is a strong impact on economic growth from public sector project delays. In a nutshell, the research findings revealed that the on-time completion ofpublic sector construction projects strongly affects economic growth, which thereby emphasizes the importance of the on-time completion of construction projects. This study further recommends that in order for a project to proceed well and be completed on schedule, sufficient planning should be done before construction begins with the aid of new technology.