buildings

Article
Construction Cost-Influencing Factors: Insights from a Survey of
Engineers in Saudi Arabia
Ibrahim Mosly

Civil Engineering Department, College of Engineering—Rabigh Branch, King Abdulaziz University,

Jeddah 21589, Saudi Arabia; [email protected]

Abstract: Cost overruns represent a continuous challenge within the construction industry, fre-
quently affecting the success of projects. This study explores the factors influencing cost during
the construction phase in Saudi Arabia, utilizing data from a survey of 1076 engineers working in
the Saudi construction industry. The results identify a number of cost-related factors, including
inadequate project management, poor cost estimation, and design errors. Interestingly, some factors,
such as currency exchange rate fluctuations and social and cultural influences, were found to have a
limited impact on construction costs. Furthermore, the study highlights the role of experience and
education level in shaping engineers’ perceptions of these cost factors. The study employs statistical
analysis, including Pearson’s chi-squared test, to demonstrate associations between demographics,
project characteristics, and cost-influencing factors. The findings suggest the need for refined project
management practices, enhanced technical training, and the implementation of digital technologies
such as Construction 4.0 to mitigate cost-related risks. This research provides significant insights for
construction professionals and policymakers seeking to enhance cost management within the Saudi
construction sector, thereby contributing to the ongoing development initiatives aligned with Saudi
Arabia’s Vision 2030.

Keywords: construction; cost; influence; factors; survey; Saudi Arabia

1. Introduction
Citation: Mosly, I. Construction
Cost-Influencing Factors: Insights
Although the construction industry has a crucial role in the continuous improvement
from a Survey of Engineers in Saudi
of the quality of human life, it has been noted that this industry has resulted in various
Arabia. Buildings 2024, 14, 3399. environmental complications that have impacted our world [1]. This dual impact makes the
https://doi.org/10.3390/ management of construction projects mostly challenging. Sophisticated and dynamic envi-
buildings14113399 ronments with many interrelated factors cause high uncertainty in construction projects [2].
This uncertainty is further compounded by the inherent complexity of construction projects.
Academic Editor: Pramen P. Shrestha
Construction projects are fundamentally complex and involve numerous variables that can
Received: 7 October 2024 significantly impact their costs. Cost is the most important factor in any business, including
Revised: 21 October 2024 the construction industry [3]. Therefore, effective cost management is not just important
Accepted: 23 October 2024 but essential. Managing these costs effectively is crucial for the successful completion of
Published: 25 October 2024 projects within budgetary constraints. To achieve this, it is essential to implement cost
management from the beginning of the project in order to accomplish it within budget and
ensure that it is on time and of high quality [4].
Construction projects play a pivotal role in economic development, yet they frequently
Copyright: © 2024 by the author.
encounter significant challenges that lead to cost overruns, impacting the overall success
Licensee MDPI, Basel, Switzerland.
and viability of projects. These challenges are a global phenomenon and not limited to any
This article is an open access article
distributed under the terms and
one region. The construction industry faces several major challenges, including developing
conditions of the Creative Commons
accurate estimates in context with recent technological and intelligence advancements, as
Attribution (CC BY) license (https:// well as effectively implementing projects within these cost budgets [5]. Despite advance-
creativecommons.org/licenses/by/ ments in technology and project management techniques, the majority of construction
4.0/). projects were completed at a significantly higher cost compared to the original contract

Buildings 2024, 14, 3399. https://doi.org/10.3390/buildings14113399 https://www.mdpi.com/journal/buildings

Buildings 2024, 14, 3399 2 of 19

value [6]. This has led to a situation where many projects are not completed within the
allocated project budget, which eventually leads to cost overruns and causes a negative
effect on the client and the contractor–consultant relationship, leading to mistrust, litiga-
tion, and arbitration [7]. Nevertheless, the continuous advancement in digital construction
technologies, such as building information modeling (BIM), artificial intelligence (AI), and
automation, will provide strategies on how to reduce cost overruns. For instance, BIM can
be used to provide accurate quantities for procurement [8], which increases efficiencies in
cost estimation. Furthermore, AI can analyze historical project data and identify patterns
that lead to more accurate cost forecasts [9]. Moreover, automation and robotics can assist
in reducing labor costs and increasing efficiencies on construction sites [10].
In Saudi Arabia, the construction sector plays a vital role in the national economy,
driven by ambitious development plans and large-scale infrastructure projects. However,
this sector also faces challenges related to cost management. As is the case in other parts
of the world, cost overruns are common in the construction industry in Saudi Arabia [11].
Many factors are related to this cost overrun, ranging from technical issues, such as design
changes and equipment breakdowns, to external influences like economic fluctuations and
regulatory requirements. For instance, inflation affects construction project prices, causing
cost overruns that require budget adjustments [12]. Another significant factor is rework,
which contributed to 52% of a project’s cost growth and 26% of its variance [13]. Given
these challenges, understanding the factors that influence costs during the construction
phase is essential for project managers, contractors, and stakeholders to mitigate risks and
ensure financial sustainability.
Despite the extensive body of research on construction cost management [2,5,7,14–20],
there remains a need for region-specific studies that address the unique conditions and
challenges faced by the construction industry in Saudi Arabia. This research aims to fill this
gap by investigating the factors influencing construction costs during the construction phase
within the context of Saudi Arabia. This is due to the distinct nature of the construction
industry of Saudi Arabia, characterized by large-scale infrastructure projects driven by the
country’s Vision 2030 development plan. This context introduces unique challenges that
are not addressed in global studies. The construction phase was selected for this research
because most cost-intensive costs occur during this stage and it involves a high number
of uncertainties. This study aims to answer the following research questions: (1) How do
engineers’ demographics influence their perception of construction cost-influencing factors?
(2) How do project-specific characteristics affect engineers’ perceptions of cost-influencing
factors? and (3) What are the implications and policy recommendations for construction
industry practices? Furthermore, the study seeks to provide valuable insights and practical
recommendations for improving cost management practices in the construction industry.
To achieve this objective, a comprehensive literature review was conducted to identify
key factors influencing construction costs. Based on the findings, a detailed questionnaire
was developed and distributed to engineers in the construction industry using Google
Forms. The collected data were then analyzed using statistical methods to identify signifi-
cant factors and their impact on construction costs. The results of this study will contribute
to the existing body of knowledge and offer practical guidance for stakeholders involved
in construction projects in Saudi Arabia. This research addresses a critical aspect of con-
struction project management by focusing on the factors that influence costs during the
construction phase. The findings aim to enhance the understanding of cost management
in the Saudi Arabian construction industry, providing a foundation for better planning,
budgeting, and risk mitigation strategies.

2. Literature Review
2.1. Cost Overrun Issues in the Construction Industry Worldwide
The cost overruns in the residential construction sector range from 21% to 55.19% [20].
This statistic highlights the severity of the problem and its impact on the construction
Buildings 2024, 14, 3399 3 of 19

industry. A number of studies have been conducted across different countries to identify
the main factors contributing to these cost overruns.
A significant observation has been made regarding the challenges faced by the major-
ity of project managers and contractors in Egypt when it comes to managing construction
project costs [21]. These challenges arise from several issues such as change orders, design
changes, design errors, the deteriorating economic situation, project delays, and the increas-
ing price of materials [21]. These factors are not limited to Egypt; rather, cost overruns are
a global challenge in the construction industry.
In Malaysia, a study that involved 79 cost-influencing factors found that client re-
quirements on finishing quality were found to be the most critical influencing factor on
construction cost [19]. Additionally, another study in Malaysia that explored the factors
influencing cost variance during the construction phase resulted in identifying the high-
est influencing factors. The top five were, as follows: incomplete design drawings and
specifications; changes in client requirements; financial difficulties faced by the contractor;
fluctuations in material prices; and poor planning, scheduling, and monitoring [6]. These
findings outline the complexity of construction cost management and the various factors
that can cause deviations from the initial planned budget.
A study that involved experts from the Chinese construction industry showed that the
most critical and common factors influencing construction cost are, as follows: market price
changes; national policy changes; currency exchange rate fluctuations; inadequate contract
management; inadequate risk management; insufficient design; major infectious diseases;
natural disasters; project location limitations; design changes; poor drawing design; and
fraud behavior and rebate [7]. Similarly, the impact of external factors, such as market price
changes and national policy changes, cannot be overlooked.
Another study that took place in Trinidad and Tobago found that the top factor
that contributes to cost overruns in public sector construction projects is the selection of
politically aligned contractors [22]. This study highlights the influence of non-technical
factors on construction costs in certain countries.
A Saudi Arabian study has identified six types of construction materials and trades
that have significant impact on construction project costs, these are, as follows: thermal
and moisture protection; site work; concrete work; conveying systems; electrical work; and
mechanical work [23]. Material costs have a significant role in determining the total project
cost, as any fluctuation in their prices can lead to substantial cost overruns.
In certain types of construction projects, such as road projects, a study found that cost
underestimation is more predominant than cost overestimation [24]. This finding suggests
that initial project estimation usually fails to account for all possible cost triggers.
An Indonesian study found that the rise in fuel prices is considered the variable with
the highest impact on construction costs and may lead to an increase in costs of 20–40% of
the original contract value [25]. This reflects the sensitivity of construction project costs to
fluctuations in essential elements such as fuel.
In India, the Ministry of Statistics and Program Implementation identified the follow-
ing factors for construction overruns: time overruns; changes in foreign exchange rate;
expensive environmental protection and rehabilitation measures; high land acquisition
cost; project scope changes; bidders charging extra in certain areas; underestimation; and
increases in prices [16]. These factors emphasize the complicated nature of cost overruns,
involving both technical and external elements. Another study in India identified the
following as the most significant factors of cost overruns: rework; construction delays;
ineffective planning and monitoring; delays in decision-making; disputes; and inflation [26].
All these factors contribute directly to increased costs and are common in the construction
industry in other countries as well.
A study that investigated the factors leading to cost overruns in Vietnam found
that the top five factors are, as follows: (1) project implementation schedule extension;
(2) rapid increase in site worker demand; (3) contract suspension or arbitrary cancellation;
(4) contractors’ poor management and supervision of quantities; and (5) construction site
Buildings 2024, 14, 3399 4 of 19

handover delays and incompleteness [18]. This highlights the vital role of effective project
management and supervision in controlling construction costs.

2.2. Factors Influencing Construction Cost

Understanding the factors that influence construction costs is crucial for effective project
management and successful project completion. Construction projects are complex and involve
various uncertainties and risks that can significantly impact costs. Identifying and analyzing
these factors helps in planning, budgeting, and mitigating potential cost overruns. The objective
of this literature review was to study the available research on the factors affecting construction
costs during the construction stage and provide a comprehensive understanding of these
influences. Table 1 illustrates the factors influencing construction cost during construction
phase that were identified from the literature review process of this study.

Table 1. Factors influencing construction cost during the construction phase.

Factor Brief Description References

The increase/decrease in value of
Currency exchange rate fluctuations [7,15,16,25–27]
local currency.
Delay in project/owner payment Delays in payments from project owners. [5,7,11,15,18,19,21,26,28–33]
Design changes that occur during the
Design changes [5,7,11,15,16,18,19,21,25–27,29,31–37]
construction stage.
Existence of errors or quality issues in the
Design error/weakness [7,11,21,26,28,30,31]
project designs.
Economic fluctuation/market price Inflation and changes in prices of
[7,15,16,19,21,25–29,31,34,36–40]
changes materials, fuel, and labor services.
Equipment breakdowns and Malfunctioning or underperformance of
[7,19,26–28,31,36]
inefficiencies machinery or a tool.
Natural disasters or extreme
Force majeure and environmental issues [7,11,15,18,19,21,25,26,28–30,36–38,41,42]
weather conditions.
Compliance with strict government
Governmental regulations [7,19,25,26,29,30,36]
regulations or changes that occur to it.
Inaccuracy in estimating the
Inadequate cost estimation [7,15,16,18,21,26–29,31,32,34,37,38,40,43]
project budget.
Inadequate management of project, Insufficient or ineffective ways to manage
[7,11,15,18,19,21,26,28,31,33,36]
contract, and communication projects, contracts, or communication.
Insufficient or ineffective planning and
Inadequate planning and scheduling [7,11,15,18,19,21,26,28,29,31,33,36,37,39]
scheduling of a project.
Lack of technical knowledge Personnel deficiency in required
[5,7,11,18,19,26–28,31,33,35,38,40,41,44]
and experience knowledge, skills, and experience.
Conflict or disagreement between two or
Legal disputes between various parties [7,11,26,30,31,45,46]
more parties.
Unreadable drawings due to printing
Poor/unclear drawing [7,15,31]
issues or other damages.
Redoing a job due to errors, design
Rework [5,7,26,27,29,31,32,47,48]
changes, or defects.
Incidents that may lead to harm, injury,
Safety issues and accidents [5,7,18,19,36]
or death of a person.
Social and cultural influences Community opposition or strikes. [7,11,18,19,25,36]
Unethical or illegal behavior of
Staff corruption [7,18,28,30]
an employee.
Buildings 2024, 14, 3399 5 of 19

3. Methodology
The methodology of this research involved a multi-step process to thoroughly under-
stand the factors influencing construction costs during the construction phase. Initially, a
comprehensive literature review was conducted using the Saudi Digital Library to gather
scholarly research on the relevant factors that exist in a global context. The focus was
given to peer-reviewed journal articles and conference papers that directly relate to the
study topic. Keywords such as ‘construction industry’, ‘cost overruns’, ‘factors’, and ‘Saudi
Arabia’ were used to search for relevant studies in the literature. Insights from this review
informed the development of a detailed questionnaire, which was designed to include de-
mographics and project-specific characteristics affecting construction costs. Google Forms
was selected for its ease of use, accessibility, and the need to collect data from a large
and geographically diverse sample across Saudi Arabia. The questionnaire was actively
collecting data from 28 November 2023 to 3 April 2024. However, data collection efforts ex-
ceeded expectations, resulting in 1211 responses. Incomplete responses were then excluded
from the study, and 1076 responses were deemed valid for analysis. To ensure a diverse
and representative sample, the questionnaire was distributed by visiting several random
locations where engineers can be found working, including, but not limited to, consulting
engineering offices, contracting companies, real estate development companies, and ongo-
ing construction projects. The selection of engineers was driven by their critical influence
on cost management, whether they were site engineers, project managers, construction
managers, designers, or hold any other role in their institution. They are directly involved
in decisions that impact project costs, making them the most relevant stakeholders for
assessing the factors influencing construction costs. Formal ethical approval was exempted
for this study by the Research Ethics Committee at King Abdulaziz University. Participants
were informed of the study purpose, and participation consent was obtained before they
started the questionnaire. Data were treated anonymously to protect participants’ identities,
and all responses were securely stored.
The collected data were then analyzed using SPSS 22 (Statistical Package for the Social
Sciences). It was chosen due to its vigorous capabilities in handling large datasets and
a wide range of statistical analyses. The analysis included frequency distributions and
percentages, as well as descriptive statistics to understand the central tendencies and
dispersion of the data by calculating the mean of each factor. To measure the consistency
of the questionnaire used for data collection in this study, a reliability analysis was used.
This was conducted using Cronbach’s alpha, which measures the scale of reliability and is
considered the most commonly used analysis method [49]. Cronbach’s alpha was calculated
for each of the multi-item scales representing the factors influencing construction costs.
Furthermore, Pearson’s chi-squared (χ2 ) test was used to compare the collected data to a
hypothetical model [50]. This was conducted to explore the relationship between categorical
variables [49], specifically exploring the association between participant demographics,
project-specific characteristics, and construction cost-influencing factors. For this reason,
the Pearson’s chi-squared (χ2 ) test represents an appropriate choice for analyzing the
relationships between variables in this study. The Pearson’s chi-squared (χ2 ) test was
conducted using Equations (1) and (2) [49], as follows:

2
Oij − Mij
2
χ = ∑ Mij
(1)

where
• χ2 represents the Pearson’s chi-squared statistic;
• i represents the row in the contingency table;
• j represents the columns in the contingency table;
• Oij represents the observed frequency;
• Mij represents the model frequency, as follows:
 Buildings 2024, 14, 3399 6 of 19

d f = (r − 1)(c − 1) (2)
where
• df represents the degree of freedom;
• r represents the number of rows;
• c represents the number of columns.
The chi-squared (χ2 ) statistic was compared against a critical value from the chi-squared
distribution table at a significant level of 0.05 for the purpose of hypotheses testing. A p-value
less than 0.05 indicated a statistically significant association between the variables, leading to
the rejection of the null hypothesis (H0 ) in favor of the alternative hypotheses (H1 ).
This research aims to answer the following questions:
1. How do engineers’ demographics influence their perception of construction cost
influencing factors?
2. How do project-specific characteristics affect engineers’ perceptions of cost-influencing
factors?
3. What are the implications and policy recommendations for construction industry practices?
The main hypothesis for this research is as follows:
1. Engineers’ demographics vs. factors influencing construction cost.
H0 : There is no significant association between the engineers’ demographics and their
perception of factors influencing construction costs.
H1 : There is a significant association between the engineers’ demographics and their
perception of factors influencing construction costs;
2. Project-specific characteristics vs. factors influencing construction costs.
H0 : There is no significant association between the project-specific characteristic and
engineers’ perceptions of factors influencing construction costs.
H1 : There is a significant association between the project-specific characteristic and
engineers’ perceptions of factors influencing construction costs.
This structured methodology ensured a thorough investigation of the factors influencing
14, 3399 7 of 20
construction costs, providing reliable and valid results to inform future practices and policies
in the construction industry. Figure 1 represents the steps conducted to perform this study.

Litrature
review

Questionnaire
survey design

Data
collection

Data analysis

Research
findings

Figure 1. Research methodology flowchart.methodology flowchart.

Figure 1. Research

4. Results
4.1. Reliability Analysis
Cronbach’s alpha reliability analysis was carried out on the 18 factors influencing
construction costs in Saudi Arabia that form the basis of this study. The value of α = 0.911
Buildings 2024, 14, 3399 7 of 19

4. Results
4.1. Reliability Analysis
Cronbach’s alpha reliability analysis was carried out on the 18 factors influencing
construction costs in Saudi Arabia that form the basis of this study. The value of α = 0.911
for the 18 factors indicates a high level of consistency among these factors. A Cronbach’s
alpha value that is above 0.90 indicates excellent reliability [50]. Thus, confidence can be
given to the data and findings of this study due to the high reliability score.

4.2. Demographic Profile and Project-Specific Characteristics

Most of the participants, representing 40.6% of the sample, were among the 26–35 age
group, an indication that young engineers have a good presence in this study. Furthermore,
the participants’ age groups of 46–55 combined with the older than 55 age group make
up, together, about 28.8% of the study participants, indicating a representative number
of senior professionals. This shows that the study has a balanced number of participants
from young and older professionals in the field of construction. Table 2 illustrates the age
profiles of questionnaire participants.

Table 2. Age profiles of questionnaire participants.

Age Frequency Percent

20–25 54 5.1
26–35 432 40.6
36–45 271 25.5
46–55 143 13.4
More than 55 164 15.4
Total 1064 100.0

The majority of participants in this study specialized in civil engineering (89.5%). Since
this study context is in the area of construction costs, a high participation of civil engineers
will ensure direct benefits and robust data collected in the same field. Engineers from other
specializations have also participated in this study in limited numbers, suggesting some
interdisciplinary input in probably very specific aspects of construction projects. Table 3
illustrates the specialization profiles of questionnaire participants.

Table 3. Specialization profiles of questionnaire participants.

Specialization Frequency Percent

Civil Engineering 952 89.5
Architecture 41 3.9
Mechanical Engineering 25 2.3
Electrical Engineering 28 2.6
Industrial Engineering 5 0.5
Health and Safety Engineering 4 0.4
Chemical Engineering 6 0.6
Computer Engineering 2 0.2
Mining engineering 1 0.1
Total 1064 100.0

Participants with bachelor’s degrees, at 81.5%, represent most of the sample size of
this study. Postgraduate studies holders of both master’s degrees and PhDs represent 18.6%
of the participants, indicating the involvement of professionals with managerial expertise
along with research backgrounds. Table 4 illustrates the academic qualifications profiles of
questionnaire participants.
Buildings 2024, 14, 3399 8 of 19

Table 4. Academic qualifications profiles of questionnaire participants.

Academic Qualification Frequency Percent

Bachelor 867 81.5
Master 156 14.7
Ph.D. 41 3.9
Total 1064 100.0

A balanced distribution of participants with various experience levels participated

in this study, ranging from participants with less than 5 years of experience, at 16.3%,
to more than 20 years of experience, at 30.6%. The involvement of highly experienced
professionals suggests a considerable amount of input from these experts, who likely have
encountered several challenges related to construction costs in their projects. This wide
range of input from different levels of experience provides comprehensive insights into
the factors influencing construction costs at different carrier phases. Table 5 illustrates the
experience profiles of questionnaire participants.

Table 5. Experience profiles of questionnaire participants.

Experience Frequency Percent

Less than 5 173 16.3
5–10 257 24.2
11–15 183 17.2
16–20 125 11.7
More than 20 326 30.6
Total 1064 100.0

Most participants’ involvement was found to be in residential construction projects, at

41.1%, while the least amount of involvement was in industrial construction projects, at
10.3%. These figures reflect the nature of the construction industry of Saudi Arabia, where
the majority of construction projects are residential projects, followed by infrastructure
and commercial construction projects. This is influenced by the objectives of the Ministry
of Housing as well as the mega projects that are part of the Saudi Vision 2030. Table 6
illustrates the types of projects that questionnaire participants were involved in.

Table 6. Types of projects questionnaire participants were involved in.

Type of Project Frequency Percent

Residential Construction 437 41.1
Commercial Construction 254 23.9
Industrial Construction 110 10.3
Infrastructure Construction 263 24.7
Total 1064 100.0

At 64.4%, the majority of participants were involved in large-scale construction projects

valued at more than 20 million Saudi riyals, reflecting the considerable amount of invest-
ment in construction activities in Saudi Arabia. The participants’ involvement in other
project size categories was fairly equal, except for projects that fell in the range of 1–5 million
Saudi riyals, which showed a greater amount of involvement. Table 7 illustrates the project
sizes that questionnaire participants were involved in.
Buildings 2024, 14, 3399 9 of 19

Table 7. Project sizes that questionnaire participants were involved in.

Project Size Frequency Percent

Less than 1 million 64 6.0
1–5 million 153 14.4
6–10 million 82 7.7
11–20 million 80 7.5
More than 20 million 685 64.4
Total 1064 100.0

The findings show that 38.9% of participants work in the Saudi Arabian capital,
Riyadh, which is considered a major economic hub. The city of Jeddah follows, with
18.8% of participants working there. Riyadh and Jeddah are the largest cities in Saudi
Arabia in terms of size and population. Participants spread across various cities in Saudi
Arabia are represented in this study. This guarantees widespread geographical insights
into construction cost factors in Saudi Arabia. Table 8 illustrates the project locations that
questionnaire participants were involved in.

Table 8. Project locations that questionnaire participants were involved in.

Project Location Frequency Percent

Rabigh 17 1.6
Riyadh 414 38.9
Taif 7 0.7
Jeddah 200 18.8
Al Khobar 20 1.9
Makkah 67 6.3
Al Jubail 17 1.6
Neom and Red Sea Project 52 4.9
Jazan 32 3.0
Madinah 38 3.6
Sakakah 6 0.6
Hail 23 2.2
Al Qassim 29 2.7
Abha 16 1.5
Yanbu 9 0.8
AlUla 7 0.7
Tabuk 18 1.7
Al Hasa 15 1.4
Najran 7 0.7
Buraydah 6 0.6
Dammam 58 5.5
Al Bahah 6 0.6
Total 1064 100.0

The study’s descriptive statistics identify the rankings of the factors influencing con-
struction costs in Saudi Arabia according to their means (see Table 9). The findings show
that inadequate management of project, contract, and communication is the highest in-
fluencing factor, with a mean score of 3.77. This indicates that inadequate contract man-
agement and poor communication among project stakeholders can greatly increase the
construction cost. Engineers could have perceived this factor as the most influential for sev-
eral reasons, including centralized decision-making, inconsistencies in project management
practices, and limited training in this factor aspect. This can be addressed by promot-
ing effective project management practices and providing extensive training programs to
improve management skills and communication.
Buildings 2024, 14, 3399 10 of 19

Table 9. Mean value for factors influencing construction costs during the construction phase.

Factor Mean
Inadequate management of project, contract, and communication 3.77
Inadequate cost estimation 3.68
Inadequate planning and scheduling 3.65
Design error/weakness 3.63
Design changes 3.61
Lack of technical knowledge and experience 3.57
Delay in project/owner payment 3.47
Rework 3.44
Economic fluctuation/market price changes 3.43
Staff corruption 3.23
Poor/unclear drawing 3.15
Legal disputes between various parties 3.12
Equipment breakdowns and inefficiencies 3.00
Force majeure and environmental issues 2.86
Safety issues and accidents 2.86
Governmental regulations 2.74
Currency exchange rate fluctuations 2.55
Social and cultural influences 2.39

The second highly influencing factor is inadequate cost estimation, with a mean score
of 3.68. Inaccurate estimations of costs can lead to budget overruns, schedule delays, and
the failure of projects. It is necessary to implement a robust estimation methodology that
utilizes historical data and incorporate contingency plans to improve cost estimates and
prevent unexpected expenses. Engineers could have perceived this factor as the second
most influential factor due to the limited availability of historical data or the complexity of
large-scale projects with numerous challenges.
Close to inadequate cost estimation is the factor inadequate planning and scheduling,
which has a mean score of 3.65, making it another major factor that greatly influences con-
struction costs in Saudi Arabia. Construction projects with poor planning and scheduling
also face delays and extra expenses. To mitigate this issue, it is essential to conduct proper
planning and scheduling via advanced software that assists in creating detailed project
timelines and tracking of activities with a continuous update option.
Factors that relate to design were also found to significantly influence construction
costs, including design error/weakness (mean score of 3.63) and design changes (mean
score of 3.61). Errors in design will lead to rework and variations, which in turn lead to
additional costs and time delays. This needs to be addressed by ensuring high-quality
designs. Furthermore, design changes during the construction phase should not be made
or at least be kept to a minimum to avoid extra costs.
Lack of technical knowledge and experience also appears among highly influencing
factors, with a score mean of 3.57. This emphasizes the importance of having competent
professionals on the construction team in order to reduce mistakes and increase cost
efficiencies. Project outcomes can be significantly improved by hiring skilled personnel and
providing adequate training to employees.
Interestingly, the findings show that factors, such as currency exchange rate fluctu-
ations (mean score of 2.55) and social and cultural influences (mean score of 2.39), are
perceived as less influential on construction costs by engineers working in Saudi Arabia.
Although several construction materials are imported and should be influenced by currency
exchange rate fluctuations, the pegging of the Saudi riyal to the U.S. dollar may have had a
role in reducing this influence and achieving these results. Moreover, Saudi culture is very
keen on the development of the country, which may have contributed to the social and
cultural influences factor ranking as the least influential among factors on the list.
Buildings 2024, 14, 3399 11 of 19

4.3. Chi-Squared Analysis

Pearson’s chi-squared test was used to explore the presence of statistically significant
associations between the categorical variables. The null hypothesis (H0) states that there
is no significant association between the variables, while the alternative hypothesis (H1)
states that a significant association does exist. A p-value of less than 0.05 indicates that
the null hypothesis is rejected in favor of the alternative hypothesis and that a significant
relationship does exist between the variables. A total of 126 Pearson’s chi-squared tests
were carried out for 18 factors against 7 demographics and project-specific characteris-
tics. Table 10 summarizes the chi-squared test results performed to assess the association
between several engineers’ demographics and project-specific characteristics and the per-
ception of construction cost-influencing factors, where the null hypothesis was rejected in
favor of the alternative hypothesis.

Table 10. Chi-squared test results for variables where the null hypothesis was rejected in favor of the
alternative hypothesis.

Variables Tested Test X2 p-Value

Pearson Chi-Squared 26.638 0.046
Age vs. Currency exchange rate fluctuations
Linear-by-Linear Association 8.205 0.004
Pearson Chi-Squared 30.446 0.016
Age vs. Safety issues and accidents
Linear-by-Linear Association 6.101 0.014
Pearson Chi-Squared 67.185 0.000
Specialization vs. Governmental regulations
Linear-by-Linear Association 1.018 0.313
Pearson Chi-Squared 21.597 0.006
Academic qualification vs. Design changes
Linear-by-Linear Association 11.834 0.001
Pearson Chi-Squared 20.357 0.009
Academic qualification vs. Staff corruption
Linear-by-Linear Association 0.240 0.624
Pearson Chi-Squared 19.948 0.011
Academic qualification vs. Governmental regulations
Linear-by-Linear Association 13.507 0.000
Pearson Chi-Squared 40.239 0.001
Experience vs. Currency exchange rate fluctuations
Linear-by-Linear Association 12.814 0.000
Pearson Chi-Squared 34.961 0.004
Experience vs. Design error/weakness
Linear-by-Linear Association 1.562 0.211
Pearson Chi-Squared 27.836 0.033
Experience vs. Staff Corruption
Linear-by-Linear Association 7.233 0.007
Pearson Chi-Squared 28.234 0.030
Experience vs. Safety issues and accidents
Linear-by-Linear Association 6.597 0.010
Pearson Chi-Squared 25.360 0.013
Type of project vs. Design changes
Linear-by-Linear Association 3.340 0.068
Pearson Chi-Squared 47.881 0.000
Type of project vs. Equipment breakdowns and inefficiencies
Linear-by-Linear Association 14.555 0.000
Pearson Chi-Squared 30.771 0.002
Type of project vs. Force majeure and environmental issues
Linear-by-Linear Association 7.080 0.008
Pearson Chi-Squared 23.646 0.023
Type of project vs. Governmental regulations
Linear-by-Linear Association 7.273 0.007
Pearson Chi-Squared 29.742 0.019
Project size vs. Design changes
Linear-by-Linear Association 7.763 0.005
Pearson Chi-Squared 37.480 0.002
Project size vs. Design error/weakness
Linear-by-Linear Association 5.675 0.017
Pearson Chi-Squared 28.452 0.028
Project size vs. Economic fluctuation/market price changes
Linear-by-Linear Association 7.303 0.007
Pearson Chi-Squared 29.424 0.021
Project size vs. Social and cultural influences
Linear-by-Linear Association 5.329 0.021
Pearson Chi-Squared 107.287 0.044
Project location vs. Design changes
Linear-by-Linear Association 7.410 0.006
Buildings 2024, 14, 3399 12 of 19

4.3.1. How Do Engineers’ Demographics Influence Their Perception of Construction

Cost-Influencing Factors?
Age vs. Currency exchange rate fluctuations: The p-value (0.046) indicates a significant
relationship between the age of the participants and their perception of currency exchange
rate fluctuations. This could be due to different levels of experience and familiarity with
economic factors. Furthermore, the significance was also found in the linear-by-linear
association (p-value = 0.004), suggesting a trend related to the perception of currency
exchange rate fluctuations and the age of the participant. Younger engineers with less
experience are less concerned about currency exchange rate fluctuations due to limited
experience compared to older engineers with more experience. Understanding these age-
related differences could help in reducing financial risks and developing training programs.
Age vs. Safety issues and accidents: The p-value (0.016) indicates a significant re-
lationship between the age of the participants and their perception of safety issues and
accidents. This could be due to different levels of experience, awareness, and training on
safety practices and regulations. The linear-by-linear association (p-value = 0.014) suggests
a trend related to the perception of safety issues and accidents and the age of the participant.
Younger engineers with less experience might perceive safety issues and accidents differ-
ently compared to older engineers with more experience and exposure to safety protocols.
Understanding these age-related differences could help in designing better safety training
programs for younger engineers and utilizing the experience of older engineers and sharing
their best practices.
Specialization vs. Governmental regulations: The p-value (0.000) indicates a signif-
icant relationship between the specialization of the participants and their perception of
governmental regulations. This could be due to different degrees of interaction with gov-
ernment regulations depending on the specialization of the engineers, as some engineers
are more involved with daily government regulation in their work activity compared to
others. Thus, the finding indicates a need for targeted communication and support from
regulatory bodies for those engineers with specializations that deal with these regulatory
bodies frequently.
Academic qualification vs. Design changes: The p-value (0.006) indicates a significant
relationship between the academic qualifications of the participants and their perception
of the impact of design changes on construction costs. This could be due to different
levels of theoretical knowledge, practical experience, and exposure to design changes. The
linear-by-linear association (p-value = 0.001) suggests a trend related to the perception
of the impact of design changes on construction costs and the academic qualification of
participants. Bachelor’s degree holders perceive the impact of design changes as moderate
to very high. This is followed by master’s degree holders who have a higher overall
perception, followed by PhD holders who have the highest perception compared to the
others. Thus, a greater awareness of the impact of design changes on cost is needed for
engineers with bachelor’s degrees.
Academic qualification vs. Staff corruption: The p-value (0.009) indicates a significant
relationship between the academic qualifications of the participants and their perception of
the impact of staff corruption on construction costs. This could be due to different levels
of exposure to corruption-related issues. For instance, engineers with a PhD perceived
a very low to moderate impact of staff corruption, most likely due to their involvement
in larger, more complex projects and office-based work. On the other hand, engineers
holding bachelor’s and master’s degrees perceived a substantially higher impact of staff
corruption on construction costs, probably due to their direct involvement with this issue
on construction sites as part of their daily work activities.
Academic qualification vs. Governmental regulations: The p-value (0.011) indicates a
significant relationship between the academic qualification of the participants and their
perception of the impact of governmental regulations on construction costs. This could be
due to different levels of understanding of regulatory frameworks and their implications.
The linear-by-linear association (p-value = 0.000) suggests a trend related to the perception
Buildings 2024, 14, 3399 13 of 19

of the impact of governmental regulations on construction costs and the academic qual-
ifications of participants. The majority of bachelor’s degree holders perceive the impact
of governmental regulations as moderate. This is followed by master’s degree holders
who have a higher overall perception, followed by PhD holders, who have the highest
perception compared to the others. Thus, we can conclude that engineers with a bachelor’s
degree might see governmental regulations as substantial but manageable, that engineers
with a master’s degree have greater involvement in navigating regulatory requirements,
and that engineers with a PhD are involved in projects that are significantly influenced
by regulations.
Experience vs. Currency exchange rate fluctuations: Similar to age vs. currency
exchange rate fluctuations, the p-value (0.001) indicates a significant relationship between
the experience of the participants and their perception of the impact of currency exchange
rate fluctuations on construction costs. This could be due to different levels of exposure
to international markets and economies in their professional careers. The linear-by-linear
association (p-value = 0.000) suggests a trend related to the perception of the impact of
currency exchange rate fluctuations on construction costs and the experience of participants.
The majority of engineers with less than 5 years of experience perceive the impact of
currency exchange rate fluctuations on construction costs as very low; this is followed by
engineers with 5–10 years of experience who have a higher perception of the impact of
currency exchange rate fluctuations on construction costs. On the other hand, the majority
of engineers with more than 20 years of experience perceived the impact of currency
exchange rate fluctuations on construction costs to be the highest. Thus, we can conclude
that as engineers gain experience, they recognize the significance of currency exchange
rate fluctuations on construction costs due to their extensive experience with multi-projects
with economical changes.
Experience vs. Design error/weakness: The p-value (0.004) indicates a significant
relationship between the experience of the participants and their perception of the impact
of design error/weakness on construction costs. This could be due to different levels of
exposure to design challenges and ways to manage them in their professional experience.
Engineers with less experience might benefit from extensive design training, while more
experienced engineers could focus on advanced design reviews that can lead to better
cost management.
Experience vs. Staff Corruption: The p-value (0.033) indicates a significant relationship
between the experience of the participants and their perception of the impact of staff
corruption on construction costs. This could be due to different levels of exposure to
corruption-related issues during their professional career. The linear-by-linear association
(p-value = 0.007) suggests a trend related to the perception of the impact of staff corruption
on construction costs and the experience of participants. The results show that the more
experienced the engineer, the more he recognizes the significant influence of staff corruption
on construction costs.
Experience vs. Safety issues and accidents: Similar to age vs. safety issues and
accidents, the p-value (0.030) indicates a significant relationship between the experience
of the participants and their perception of the impact of safety issues and accidents on
construction costs. This could be due to different levels of exposure to safety protocols
and incidents involving risks and hazards during their professional careers. The linear-by-
linear association (p-value = 0.010) suggests a trend related to the perception of the impact
of safety issues and accidents on construction costs and the experience of participants.
The results show that highly experienced engineers recognize the significance of safety-
related problems but at the same time have developed the skills to manage and mitigate
safety concerns, while less experienced engineers, on the other hand, struggle more with
safety management.
Buildings 2024, 14, 3399 14 of 19

4.3.2. How Do Project-Specific Characteristics Affect Engineers’ Perceptions of

Cost-Influencing Factors?
Type of project vs. Design changes: The p-value (0.013) indicates a significant relation-
ship between the type of project and the perception of the impact of design changes on
construction costs. This could be due to the different nature and technical complexity of
these projects as well as their vulnerability to design changes. Results show that industrial
and infrastructure projects are sensitive to design changes in terms of cost consequences
compared to residential and commercial projects.
Type of project vs. Equipment breakdowns and inefficiencies: The p-value (0.000)
indicates a significant relationship between the type of project and the perception of the
impact of equipment breakdowns and inefficiencies on construction costs. This could be
due to the different environments and equipment required for use in these projects. The
linear-by-linear association (p-value = 0.000) suggests a trend related to the perception of the
impact of equipment breakdowns and inefficiencies on construction costs and the type of
project. The results show that equipment breakdowns and inefficiencies in residential and
commercial construction projects, while important, are less critical compared to the other
cost-related factors. On the other hand, in industrial and infrastructure construction projects,
equipment breakdowns and inefficiencies are considered more disruptive and costly.
Type of project vs. Force majeure and environmental issues: The p-value (0.002)
indicates a significant relationship between the type of project and the perception of the
impact of force majeure and environmental issues on construction costs. This could be
due to the different topographic environments and surroundings of these projects. The
linear-by-linear association (p-value = 0.008) suggests a trend related to the perception
of the impact of force majeure and environmental issues on construction costs and the
type of project. The results show that the impact of force majeure and environmental
issues in residential and commercial construction is significant but less critical compared to
other cost-related factors. On the other hand, in industrial and infrastructure construction
projects, the impact of force majeure and environmental issues is considered more expensive
to manage.
Type of project vs. Governmental regulations: The p-value (0.023) indicates a signifi-
cant relationship between the type of project and the perception of the impact of govern-
mental regulations on construction costs. This could be due to the different regulatory
requirements for each of these projects. The linear-by-linear association (p-value = 0.007)
suggests a trend related to the perception of the impact of governmental regulations on
construction costs and the type of project. The results show that the impact of governmen-
tal regulations in residential and commercial construction is substantial but less critical
compared to other cost-related factors. On the other hand, in industrial and infrastructure
construction projects, the impact of governmental regulations is considered more rigorous
and involving.
Project size vs. Design changes: The p-value (0.019) indicates a significant relationship
between project size and the perception of the impact of design changes on construction
costs. This could be due to the various scales and complexities of these projects. The
linear-by-linear association (p-value = 0.005) suggests a trend related to the perception of
the impact of design changes on construction costs and project size. The results show that,
as projects increase in size, engineers perceive design changes to have a larger impact on
the construction cost.
Project size vs. Design error/weakness: The p-value (0.002) indicates a significant rela-
tionship between project size and the perception of the impact of design error/weakness
on construction costs. This could be due to the various scales and complexities of these
projects and their vulnerability to design quality issues. The linear-by-linear association
(p-value = 0.017) suggests a trend related to the perception of the impact of design er-
ror/weakness on construction costs and project size. The results show that small-sized
projects are impacted by design error/weakness but that their overall influence is less
critical compared to larger projects.
Buildings 2024, 14, 3399 15 of 19

Project size vs. Economic fluctuation/market price changes: The p-value (0.028)
indicates a significant relationship between project size and the perception of the impact of
economic fluctuation/market price changes on construction costs. This could be due to
the different sensitivities of projects to international economic conditions based on their
scale. The linear-by-linear association (p-value = 0.007) suggests a trend related to the
perception of the impact of economic fluctuation/market price changes on construction
costs and project size. The results show that small-sized projects are impacted by economic
fluctuation/market price changes, but that their overall influence is less critical compared
to larger projects involving major investment, which are very sensitive to fluctuations
in prices.
Project size vs. Social and cultural influences: The p-value (0.021) indicates a significant
relationship between project size and the perception of the impact of social and cultural
influences on construction costs. This could be due to the different sensitivities of projects
to social and cultural factors based on their scale and scope. The linear-by-linear association
(p-value = 0.021) suggests a trend related to the perception of the impact of social and
cultural influences on construction costs and project size. The results show that small-sized
projects are impacted by social and cultural influences but that their overall influence is less
critical compared to larger projects involving significant interactions with several social
and cultural contexts, which require robust assessment and community engagement to
minimize risks.
Project location vs. Design changes: The p-value (0.044) indicates a significant rela-
tionship between project location and the perception of the impact of design changes on
construction costs. This could be due to the different design requirements and tasks for
these projects in different cities. The linear-by-linear association (p-value = 0.006) suggests
a trend related to the perception of the impact of design changes on construction costs
and project location. The results show that engineers perceive design changes to projects
in Riyadh city as impactful, likely because of the city size and project complexity. Fur-
thermore, engineers perceive design changes to projects in Neom and Red Sea projects as
also impactful, likely due to the large scale of these projects and their high profiles. Other
smaller cities, such as Rabigh, Taief, and Skaka have fewer respondents and show varying
perceptions with regard to the impact of design changes. Thus, even small cities can differ
significantly in terms of design change impact.

4.3.3. What Are the Implications and Policy Recommendations for Construction
Industry Practices?
The following are a number of policy recommendations that were derived from the
findings of this study and can help to mitigate the risks associated with cost overruns and
contribute to more efficient and sustainable project outcomes:
1. It is important to promote best practices in project management to address the inad-
equate management of project, contract, and communication, which is the highest
cost-influencing factor;
2. To ensure clear communications among stakeholders, it is important to establish
standardized communication protocols;
3. Robust cost estimation methodologies that integrate historical data and contingency
plans to enhance accuracy should be implemented;
4. The use of cutting-edge planning and scheduling software to generate comprehen-
sive project timelines and continuously monitor its activities should be promoted to
mitigate delays and control costs;
5. High-quality designs should be ensured by conducting frequent reviews and imple-
menting strict quality assurance protocols, which in turn will assist in reducing design
errors and weaknesses’
6. Guidelines should be set to minimize design changes during the construction phase.
To manage additional costs, it is important to perform a comprehensive impact
assessment and obtain approvals for required changes;
Buildings 2024, 14, 3399 16 of 19

7. Construction professionals should be encouraged to enroll in formal education and

comprehensive training programs to improve their technical knowledge and expertise;
8. The establishment of a culture that prioritizes knowledge-sharing and mentorship
within organizations should be encouraged in order to utilize the expertise of senior
engineers in favor of younger engineers. Sharing project knowledge can enhance
organizational cost-efficiency and performance [51];
9. Strategies to minimize financial risks caused by fluctuations in currency exchange
rates should be implemented, specifically for large-scale projects that heavily rely on
imported materials;
10. Support should be offered to engineers who deal with regulatory frameworks to en-
sure that they possess the necessary skills to successfully overcome any requirements;
11. Anti-corruption training and policies should be implemented, with an emphasis on
real-life cases in the construction context;
12. Artificial intelligence should be adopted to enhance construction cost control. It was
shown that the artificial intelligence approaches used in construction management
can lead to minimizing cost overruns and improvements in project efficiency [52];
13. Construction 4.0 should be adopted by using digital solutions to achieve cost efficien-
cies. Digitalizing construction improves efficiency, reduces errors, reduces delays,
and prevents exceeding project budgets; it promotes collaboration and information-
sharing throughout the construction supply chain [53];
14. Incentives for fair labor practices and work safety in construction projects should be
introduced to enhance ethical practices in the industry;
15. Ethical cost management practices should be promoted to increase financial efficiency
and minimize environmental impacts;
16. Policymakers should establish holistic national standards for cost estimation in con-
struction projects;
17. Policymakers should stimulate incentives for companies that adopt digital construc-
tion technologies;
18. Policymakers should expand on adopting public–private partnerships (PPPs), as
it will promote the use of digital construction technologies and best practices in
project management;
19. Policymakers can mandate a number of certificate programs in advanced project
management techniques to ensure consistent standards across the industry.

5. Conclusions
The findings in this study reveal that inadequate management of projects, contracts,
and communication is the most significant factor contributing to cost overruns. Additional
significant factors included inadequate cost estimation, poor planning and scheduling,
design errors, and a lack of technical knowledge among professionals. In contrast, fac-
tors such as currency exchange rate fluctuations and social and cultural influences were
regarded as having a limited impact, probably owing to the distinct economic stability and
cultural context of Saudi Arabia.
The findings highlight the importance of enhancing project management practices, im-
plementing advanced cost estimation techniques, and using cutting-edge tools for planning
and scheduling. Moreover, the results indicate that encouraging a culture of knowledge-
sharing and mentorship within the construction industry could significantly enhance cost
efficiency. Furthermore, the extensive experience of senior engineers can significantly
contribute to minimizing errors and improving project outcomes.
This study has resulted in several findings that require further study to provide a
comprehensive overview of construction cost-influencing factors in Saudi Arabia. These
future studies may include understanding the limited impact on construction costs of
both currency exchange rate fluctuations and social and cultural influences. Furthermore,
due to the regional variations within Saudi Arabia, it would be beneficial to examine the
differences across regions or project types in terms of construction costs. This comparison
Buildings 2024, 14, 3399 17 of 19

could also be made with other countries that have similar economic and cultural contexts.
Moreover, there is a need to investigate how digital technology adoption may affect the
cost of construction in Saudi Arabia and which of these technologies have the highest
potential for cost reduction. In addition, longitudinal studies to track the evolution of
cost factors over time with the adoption of these technologies would provide valuable
insights. Sustainable development is a necessity these days; therefore, research on the
role of sustainability-related factors and their influence on construction costs is another
interesting topic for future studies.

Funding: This research received no external funding.

Institutional Review Board Statement: Formal ethical approval was exempted for this study by the
Research Ethics Committee at King Abdulaziz University.
Informed Consent Statement: Informed consent was obtained from all subjects involved in the study.
Data Availability Statement: The data presented in this study are available on request from the
author. The data are not publicly available due to privacy and ethical restrictions.
Acknowledgments: The author would like to thank all questionnaire participants as well as Faisal
Alrashidi and Faisal Almaghrabi for administering the study questionnaire.
Conflicts of Interest: The author declares no conflicts of interest.

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