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Assesment of Economic Factors for Sustainable Construction Industry

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Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

Assessment of Economic factors for sustainable construction industry

Muhammad Hanif1 and Sikandar Bilal Khattak2
1
Department of Industrial Engineering
University of Engineering & Technology Taxilla
Taxilla, Pakistan
2
Department of Industrial Engineering
University of Engineering & Technology Peshawar
Peshawar, Pakistan
Corresponding author’s e-mail: sikandarbilal@uetpeshawar.edu.pk

Abstract: In developed countries construction industry contributes around 9.9 % to the GDP, where as in Pakistan it is
around 2.4 %. Moreover, construction industry worldwide engages multiple industrial sectors and majority of the labor
forces. Any positive or negative change directly or indirectly effect the whole economic fabric of a country. Sustainability,
therefore becomes an important aspect to safeguard the current and future generation demands, requirements and other
needs. It is therefore important to identify and assess the different factors associated with economic sustainability. A
thorough literature review is conducted to identify different economic factors. A questionnaire based survey is conducted to
evaluate the identified factors, and then the statistical measures are used to evaluate and rank these factors.

Keywords: Sustainability; GDP (Gross Development Product); Economic Sustainability; Construction Industry.

1. INTRODUCTION
Sustainability or Sustainable development has been commonly defined as “Economic and social development that
meets the needs of the current generation without compromising the ability of future generations to meet their own needs"
(Sultan 2005). Construction is large, dynamic, and complex sector that plays an important role in the country GDP.
Construction workers and employers build roads, houses, work places etc.; and also repair and maintain our national
physical infrastructure. Construction work can involve buildings of new structure, which may include subdividing land for
sale as a buildings sites or preparation for new construction (Moavenzadeh and Rossow 1935).

Sustainable construction provides smarter buildings (optimize technological performance), improve internal
environmental quality, and minimizing the economic impact throughout the life cycle of the building (Drexhage and
Murphy 2010). So, the managers and engineers should focus on sustainable construction. In order to reduce the economic
unsustainability of construction activities, one has to identify the root cause and develop an appropriate model applicable
across the globe. To overcome the increasing concern of today’s resource depletion and to address economic considerations
of developing countries, like Pakistan, Analytical Hierarchical Process (AHP) can be applied for decision making in order
to identify the factors affecting the sustainability of construction industry.

The aim of this research is to access the different construction industries and identify the significant factors that effects
the economic sustainability. The factors are ranked on the basis of AHP Eigen values.

2. LITERATURE REVIEW
In recent years, different techniques such as, life cycle assessment techniques (LCA) in the assessment of sustainability
(Gundes 2016), Modified Delphi method (Lau, Wandersman et al. 2016), Analytical Network Process (Hussain, Awasthi et
al. 2016), Analytical Hierarchical Process (AHP) (Calabrese, Costa et al. 2016), are used for the analysis/evaluation of
factors and selection of best alternatives. Gundes (2016) worked on two life cycle techniques namely Life Cycle Cost
(LCC) & Life Cycle Assessment (LCA) in the assessment of sustainability. LCC with the help of cost analysis includes
economic factors in the assessment of sustainability. Whereas LCA is used to evaluate the potential environmental impacts
of a product/process during entre life cycle. The researcher tried to integrate the LCC and LCA techniques, but the need for
a clear, systematic and standard methodology for integrating the economic, environmental and social impact assessments
still remains unfulfilled. It measures only the environmental performance excellently, like the consumption of natural inputs
and emissions to nature by production processes (Gundes 2016). Turnbull et al. (2016) used modified Delphi method to
develop a list of non-emergent interventions commonly used in Intensive Care Units (ICUs), which requires a clear
Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

understanding of treatment’s goals. Researchers conducted a three-round modified Delphi process via panel consisting’s, of
6 physicians, 6 ICU nurses, 6 former ICU patients, and 6 family members. About Eight interventions are achieved i.e.
Clinical and patient/family participants are the two significant factors were able to identify sensitive decisions that should
trigger in decision making. Donohoe et al. (2012) said it is useful for specific, single-dimension question and fail to support
when there are complex problems with multiple factors.

AHP is a structure technique for analysis of complex decisions and a multi criteria decision making method that was
originally developed by Prof. Thomas L. Saaty in 1980. This method derive ratio scales from paired wise comparisons
(Barczak, Batako et al. 2010). Recently, Liaghati et al. (2016) have worked on developing an ethics-based approach to
indicators of sustainable agriculture using AHP. The developed hierarchical network has two levels for selection from
among the three ethical approaches, which were developed based on the general tenets of utilitarian, rights, and virtue
models. The findings indicated that criteria, i.e. resilience of agricultural systems, supportive policies and self-reliance, and
equity, are the most important criteria for sustainable agriculture in Iran. Finally, he obtained two strategies for developing
a macro ethics approach: namely informational strategies and structural strategies. AHP is multi-attribute approach that has
been applied for formulating and analyzing unstructured problems in a variety of decision making situations ranging from
simple personal decisions to complex (Liaghati 2016). This is the reason AHP is selected for this research.

According to Omair et al. (2015) there are basically three steps involved in this process: (1) to set an overall objective.
(2) Define a criteria (indicators), on which alternatives are to be selected. (3) To pick an alternatives, in which the best one
is to be selected. One of the method used to solve AHP is called Square Matrix Method. Square Matrix Method is used for
higher order matrices i.e. may be used for more than 15 factors. In this research we will go through square matrix method,
because there are more than 15 factors identified Omair et al. (2015). Sustainable Construction requires a long term view,
considering initial capital cost, against running costs of the structure. The major economic benefits of sustainable
construction is to reduce operation and utility costs, maintenance costs, and an overall improvement in the buildings
performance and efficiency (Ugwu et al. 2007). Different researchers have worked on sustainability. Table 1 summarizes
the research work done by different researchers.

Table 1. Literature Reviews

S.No Title Aims/Objective Method used Inputs Conclusion Remarks

1 A review of To determine Using Integrated Annual reports The conclusion is Identification of

construction attitudes to Management of CSR that even though sustainability
companies' attitudes sustainability Systems (IMS), the construction factors
to sustainability and in a large combining industry has its
(Myers 2005) part these were ISO 14001 own sustainability
gauged by (Environment), agenda,
the reporting of OHSAS 18001 Relatively few
corporate social (Health & companies have
responsibility Safety), and ISO changed their
and 9001–2000 business paradigm.
Associated (Quality)
issues.

2 The construction To examine To identify Experts (civil Discuss issues in Limited to

industry in Yemen- construction sustainability engineers, Yemen Yemen
towards economic industries and indicators and architects, construction construction
sustainability industries to select an indicator consultants industries and industries,
(Sultan 2005) contribution to set, Delphi method etc.), bring awareness of
nation’s overall questionnaire new era of
economy survey sustainable
development
3 Role of Construction To examine the 1) Leontief’s (1936) A time- series Granger Causality To identify the
Sector in Economic contribution of Input-Output model, annual indicated that there major issues
Growth: Empirical construction Analysis data (1950- is unidirectional affecting the
Evidence from sector in Pak 2) The new 2005), Monte relationship efficiency of
Pakistan Economy economy and econometric Carlo between construction
(Khan 2008) identification of Methodology Simulation construction sector and take
relationship with developed by Engle industry and corrective action
economic and Granger, aggregate economy to increase in
growth Unit root test of Pakistan economic growth
Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

4 A methodology to To propose a Techniques of Experts, Identify Validating

identify methodology for project Compilation sustainability questionnaire
sustainability selecting management, of information indicators and and expert
indicators in indicators, Pareto principle through to select an experience
construction projects which will be diagramming interviews, indicator set.
in Spain developed by all techniques i.e. Brainstorming,
(Fernandez et al. stakeholders, Ishikawa diagrams, Analysis by
2010) thus reducing systems checklists,
the subjectivity Diagrams questionnaires
and uncertainties
of the process
5 Sustainable An overview of Scoring techniques, Processes, optimization Limited to
manufacturing: recent trends and LIFE CYCLE machines, cost techniques for manufacturing
Modelling and new concepts in ASSESSMENT factors, sustainable industries, only
optimization the development TECHINIQUES environmental, manufacturing show the
challenges at the of sustainable (LCA), social, & processes, focusing presentation of
product, Products, AHP economic on dry, near-dry techniques not
process and system processes and factors and cryogenic the actual data
levels systems. machining as
(Jayal et al. 2010) examples,
Are presented.

6 Sustainable Identification of Statistical analysis, Engineers, Significant LCC and LCA

development tool for relevant product, Framework Experts, & parameters have tools can be used
Khyber and indicators in development Questionnaire been obtained on for cost analysis
Pakhtunkhwa’s terms of the basis of using the
dimension stone parameters using economic, societal identified
industry MS Excel for and environmental parameters
(Omair et al. 2015) measuring factors in life cycle
sustainability of of dimension stone
dimension stone product.
industry
7 Evaluation of To identify the A statistical analysis Experts, Critical factors are Limited to
Factors affecting the success and tool such as chi- Consultants, identified. The quality of
Quality of adverse factors square and weighted Questionnaire critical factors construction
Construction that have mean method identified are projects, can be
Projects significant effect (WMM) were used continuous used for
(Abas et al. 2015) on quality improvement, joint sustainability
performance of working, analysis of
construction communication, construction
projects of technical person projects
Pakistan. availability, and
procurement unit
of the contractor.
8 Identification and This research Analytical Questionnaire In this research the This can be
Evaluation of Risk work addresses Hierarchy Process based effect of external extended to
Factors Affecting the and highlights (AHP) is used factors on key manufacturing
Supply Chain external factors performance industries,
Environment of affecting indicator (Cost, service industries
Construction different Quality and Time) etc.
Industry of Khyber performance of the construction
Pakhtunkhwa (KPK) indicators (Cost, projects is
(Khattak et al. 2015) Quality and assessed.
Time).

As shown in Table 1, multi dimension research has been carried out to identify the factors associated with
sustainability and construction. Sultan (2005) worked on economic sustainability of Yemen construction industry using
Delphi method. Delphi Method was used to identify sustainability indicators & select an indicator set. Table 2 enlist the
economic factors identified from literature review. A total of 23 factors are selected. The factors are extracted from the
literature cited in Table 1.

Table 2. Identified Factors

Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

S.No Identified Factors S.No Identified Factors

A Raw material cost M Electricity consumption
B Operating cost N Heating Consumption
C Capital cost O Energy consumption in processing a ton of
raw material
D Employee wages and benefits P Transportation cost
E Payments to providers of capital Q Maintenance cost
F Payments to government (taxes/month) R Total fuel consumption
G Costs of managing risks/ opportunity S The procurement budget used for significant
locations of operation
H Employees hired on the minimum wages T Consumer injury cost
I Minimum wage of employee/ month U Sustainable construction methods result in
increased capital costs
J Tax relief and tax credits given to your V Awareness of government incentive schemes
organization by the government on sustainability
K Extent to which development infrastructure W Opinion that sustainable construction could be
investments are supported achieved without increased capital costs
L Investments used in enhancing skills and
knowledge among professional
community/year

Factors are verified from expert in a group discussion session. Since the inaugural international conference on
sustainable construction, in Tampa, USA in 1994, sustainable “green” building has become a significant global issue. A
large number of pioneering projects have proved that green buildings can provide a far more comfortable, healthy, living
and working environment for their end users (Dobson, Sourani et al. 2013). Infrastructure projects have significant impact
on a sustainable construction environment. Civil engineering infrastructure differs from other structures such as buildings
for which there are sustainability assessment tools available (Ikediashi et al. 2016). Several researches has been initiated
related to sustainability and environment in general. In South Africa, there have been some projects that focused on
investigating different aspects of sustainability within the local context. Examples include socio-economic aspects at the
planning stages (Talukhaba et al. 2005), health safety in construction (Haupt et al. 2005), and environment sustainability in
affordable housing (Dalgliesh et al. 1997). Other researchers investigated the sustainable development of aviation
transportation infrastructure at the African continental level (Rhoades 2004).

3. METHODOLOGY
The literature review and discussion with experts assisted in identifying the factors related to sustainability in
construction industries. A review was conducted using literature on sustainability research and questionnaire-based survey
for indicators validation. Figure 1 shows the methodology of the project (how the research objective is achieved).

Prelim inary literature Expert consultation /

review Dis cussion

Problem statement Pilot Study Data Analysis

Detail Literature
review
No Questionnaire
AHP
validation?

Economic F actors Yes

identification
Dis tribution of
Creating Dedicated
Questionnaire
Factors shared with Excel Template
academ ic Expert &
construction cons ultant
Collecting
Questionnaires
Solve AHP Matrix
No
Factors Jus tified?
No

Rec eive d more than

30 questionnaire? Selecting significant
factors
Yes
Yes
Design Ques tionnaire
Documentation
Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

Figure 1. Methodology flowchart

Figure 1 shows the methodology used for this research. Different techniques and article associated with sustainable
production were reviewed. After preliminary literature review, problem statement was defined. It was discussed and
finalized in consultation with academic and construction experts. Around twenty-three (23) economic factors as shown in
Table 2 were identified through a comprehensive literature review.

A pilot study was conducted by distributing the initial questionnaire to a panels of experts. The first panel, which
consisted of experts in the field of contracting, was asked to verify and validate the questionnaire topics and its relevance to
the research objective. The second panel, which consisted of two experts in the statistics, was asked to identify that the
instrument used was valid statistically and that the questions was designed well enough to provide relations and tests among
variables. Expert’s comments and suggestions were gathered and evaluated carefully. At the end of this process, some
minor changes, modifications and additions were incorporated to the questionnaire and the final questionnaire was
designed. Then questionnaire was distributed and data analysis was performed when the number of received questionnaires
reached 30.

Data analysis was done through Analytical hierarchical process (AHP) using Microsoft Excel. After solving AHP
matrices significant economic factors were identified. The result compilation and documentation was done at the end. The
designed questionnaire had two sections. The first section was related to information about the respondent profiles such as-
name, designation, qualification, and address. The second section included important weights assigned to identified factors.
Weights were on the scale of 0-5, whereas 0 shows not applicable (N/A), 1(very low), 2(low), 3(moderate), 4(high), and
5(very high).

Different respondents were selected from Pakistan Engineering Council (PEC) database. The top four categories as per
PEC are Class A (CA), Class B (CB), Class1 (C1) and Class (C2). The questionnaire was shared with CA, CB, C1, and C2
category contractors. The designed questionnaire was shared with about 70 respondents. Also series of discussion sessions
were arranged with project managers and site engineers, and executive’s engineers of firms and the responses were noted
during the session. Around 40 questionnaires were received out of which 10 were rejected due to lack of information. So
the response ratio of the received questionnaires is 42.86%.

3.1. Conducting an Item Analysis for Data Validation

For validity and reliability, item analysis for the collected data is necessary. This is important because the data is
collected independently from different organizations and different practitioners, so there may be chance of differences in
their responses. For item analysis, Cronbach’s alpha test was conducted using Minitab software. Table 3 shows the
reliability of data, which is being collected. This statistic is an overall item correlation where the values range between 0
and 1. Value above 0.7 is considered to be acceptable (Gliem 2003). As the Cronbach’s alpha value is greater than 0.7, so
by definition data collected is highly reliable.

Table 3. Reliability Statistics

Cronbach’s Alpha Cronbach’s Alpha N of items

Based on Standardized
items
0.9833 0.9533 30
Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

4. DATA ANALYSIS

The data collected is analysed by the method known as Analytical Hierarchical Process (AHP). This process is used to
evaluate the factors and identifying the significant factors. Basically there are two techniques/methods used to solve AHP.
First one is consistency ratio method and the second is square matrix method. Consistency ratio method is very common
but it is applicable to 15x15 matrix only whereas square matrix method is used for higher order matrices. As there are 23
factors identified, so square matrix method is used to carry out the analysis.

4.1. Square matrix method

Square matrix method is used for analysis of more than 15 factors. The procedure to solve it by square matrix method is
shown below;

Step 1: Factors in rows are being compared to the factors in columns. The values are inserted in the matrix like from to
chart. The values are inserted in such a way that the column values are in numerator while row values are in denominator.

Step 2: Square the matrix obtained in step 1 and new resultant matrix will be obtained.

Step 3: Normalize the matrix by first row wise addition and then sum the values obtained column wise (total sum will be
obtained). Then divide each value in column by the total sum, the values obtained will be normalized values.

Step 4: Again square the matrix obtained in step 2. Repeat the process described in step 3 for normalizing the values.

Step 5: Take difference between normalize values of step 2 and step 1. If the difference is 0 (zero) in each row, then stop
the process. The normalized values obtained in last matrix will be the Eigen values of all the factors.

4.2. Procedure to Solve AHP on Excel

Applying the Square Matrix Method, the calculation for economic factors by using the above steps is shown below.
There are 23 factors, so the matrix obtained will be of order 23x23.

In Table 4, Criteria in the row are being compared to the criteria in the column. The below table is MS Excel template
for AHP based on step 1. The values are inserted in the matrix like “from to chart”. The row values are in numerator while
columns values are in denominator. The values in numerator and denominator are the mean values of the factors obtained
from questionnaire.

Table 4. Pairwise Comparison (Input Matrix)

Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

A B C D E F G H I J K L M N O P Q R S T U V W
A 1 1.114 1.067 1.309 1.076 1.351 1.38 1.84 1.46 1.443 1.427 1.549 1.114 1.427 1.04 1.024 1.175 1.008 1.814 1.512 1.124 1.716 1.46
B 0.897 1 0.958 1.175 0.966 1.213 1.239 1.652 1.31 1.296 1.281 1.39 1 1.281 0.934 0.919 1.055 0.905 1.628 1.357 1 1.54 1.31
C 0.937 1.044 1 1.227 1.009 1.266 1.293 1.724 1.368 1.353 1.337 1.452 1.044 1.337 0.975 0.96 1.101 0.945 1.7 1.417 1.053 1.608 1.368
D 0.763 0.851 0.815 1 0.822 1.032 1.054 1.405 1.115 1.102 1.09 1.183 0.851 1.09 0.794 0.782 0.898 0.77 1.385 1.155 0.858 1.311 1.115
E 0.929 1.035 0.991 1.217 1 1.255 1.282 1.71 1.356 1.341 1.326 1.439 1.035 1.326 0.967 0.952 1.092 0.936 1.685 1.405 1.044 1.594 1.356
F 0.74 0.824 0.79 0.969 0.797 1 1.022 1.362 1.08 1.068 1.056 1.146 0.824 1.056 0.77 0.758 0.87 0.746 1.342 1.119 0.832 1.27 1.08
G 0.724 0.807 0.773 0.949 0.78 0.979 1 1.333 1.058 1.046 1.034 1.122 0.807 1.034 0.754 0.742 0.851 0.73 1.314 1.095 0.814 1.243 1.058
H 0.543 0.605 0.58 0.711 0.585 0.734 0.75 1 0.793 0.784 0.775 0.842 0.605 0.775 0.565 0.556 0.638 0.548 0.985 0.821 0.611 0.932 0.793
I 0.685 0.763 0.731 0.897 0.737 0.926 0.946 1.26 1 0.989 0.977 1.061 0.763 0.977 0.713 0.702 0.805 0.69 1.243 1.036 0.77 1.176 1
J 0.692 0.772 0.739 0.907 0.746 0.936 0.956 1.275 1.011 1 0.989 1.073 0.772 0.989 0.721 0.71 0.814 0.698 1.257 1.048 0.779 1.189 1.011
K 0.7 0.781 0.748 0.918 0.754 0.947 0.967 1.29 1.023 1.012 1 1.086 0.781 1 0.729 0.718 0.824 0.706 1.271 1.06 0.788 1.203 1.023
L 0.645 0.719 0.689 0.845 0.695 0.872 0.891 1.188 0.942 0.932 0.921 1 0.719 0.921 0.672 0.661 0.759 0.651 1.171 0.976 0.726 1.108 0.942
M 0.897 1 0.958 1.175 0.966 1.213 1.239 1.652 1.31 1.296 1.281 1.39 1 1.281 0.934 0.919 1.055 0.905 1.628 1.357 1.009 1.54 1.31
N 0.7 0.781 0.748 0.918 0.754 0.947 0.967 1.29 1.023 1.012 1 1.086 0.781 1 0.729 0.718 0.824 0.706 1.271 1.06 0.788 1.203 1.023
O 0.96 1.07 1.025 1.258 1.034 1.298 1.326 1.768 1.402 1.387 1.371 1.488 1.07 1.371 1 0.984 1.129 0.968 1.743 1.453 1.08 1.649 1.402
P 0.976 1.088 1.042 1.278 1.051 1.319 1.348 1.797 1.425 1.409 1.393 1.512 1.088 1.393 1.016 1 1.148 0.984 1.771 1.476 1.097 1.675 1.425
Q 0.85 0.947 0.907 1.114 0.915 1.149 1.174 1.565 1.241 1.227 1.213 1.317 0.947 1.213 0.885 0.871 1 0.857 1.543 1.286 0.956 1.459 1.241
R 0.992 1.105 1.059 1.299 1.068 1.341 1.369 1.826 1.448 1.432 1.416 1.537 1.105 1.416 1.032 1.016 1.166 1 1.8 1.5 1.115 1.703 1.448
S 0.551 0.614 0.588 0.722 0.593 0.745 0.761 1.014 0.804 0.795 0.786 0.854 0.614 0.786 0.574 0.564 0.648 0.555 1 0.833 0.619 0.946 0.804
T 0.661 0.737 0.706 0.866 0.712 0.894 0.913 1.217 0.966 0.955 0.944 1.025 0.737 0.944 0.689 0.677 0.778 0.667 1.2 1 0.743 1.135 0.966
U 0.889 0.991 0.95 1.165 0.958 1.202 1.228 1.637 1.299 1.284 1.27 1.378 0.991 1.27 0.926 0.911 1.046 0.897 1.615 1.345 1 1.527 1.299
V 0.582 0.649 0.622 0.763 0.627 0.787 0.804 1.072 0.851 0.841 0.831 0.903 0.649 0.831 0.607 0.597 0.685 0.587 1.057 0.881 0.655 1 0.851
W 0.685 0.763 0.731 0.897 0.737 0.926 0.946 1.26 0.987 0.989 0.977 1.061 0.763 0.977 0.713 0.702 0.806 0.69 1.243 1.036 0.77 1.176 1

Table 4 shows the pairwise comparison matrix obtain from mean value of the factors and compared with each other.
For example, factor A “Raw material cost” has a mean value of 4.2333 and Factor B “Operating Cost” has a mean value of
4.2000. So the ratio is 1.114. The same method is applied to all the factors.
In the next step squaring of above Table 4 is done then normalization is performed. After normalization the stopping
criteria is checked by calculating the difference between normalized values of both iterations. The difference is zero and the
resultant values as shown in Table 5 are the Eigen values of the economic factors.

Table 5. Weighted Preference Matrix for Economic factors

S.No. Economic Factors Eigen values

1 Raw material cost 0.055527
2 Total fuel consumption 0.055094
3 Transportation cost 0.054215
4 Energy consumption in processing 0.05335
5 Capital cost 0.052038
6 Payments to providers of capital 0.051592
7 Electricity consumption 0.049847
8 Operating cost 0.049847
9 Sustainable construction increased costs 0.049414
10 Maintenance cost 0.047224
11 Employee wages and benefits 0.042409
12 Payments to government (taxes/month) 0.041098
13 Costs of managing risks/ opportunity 0.040232
14 Heating Consumption 0.03892
15 What extent is the development infrastructure investments are supported 0.03892
16 Tax relief and tax credits given to your organization by the government 0.038474
17 Minimum wage of employee/ month 0.038041
18 Sustainable construction could be achieved without increased capital costs 0.038041
19 Consumer injury cost 0.03673
20 Investments used in enhancing skills and knowledge per year 0.035851
21 Awareness of government incentive schemes on sustainability 0.032361
22 The procurement budget used for significant locations of operation 0.030604
23 Employees hired on the minimum wages 0.030171
Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

Table 5 shows the final AHP priority values in terms of eigen values. The factors are arranged in descending order. The
normalized principle eigen vector is also called priority vectors or weighted preference matrix (Teknomo 2006). By
priority/ Eigen values, it mean the relative weights among the things/factors that we compare. As shown in Table 5 case
raw material cost got the highest ranking with the Eigen value of 0.055527, total fuel consumption is ranked 2nd with the
Eigen value of 0.055094, transportation cost is ranked 3rd with the Eigen value of 0.054215.

5. RESULTS AND DISCUSSION

As shown in Table 5, Raw material cost with a value 0.0555 is ranked first, Total fuel consumption with a value of
0.0520 is ranked second, Transportation cost with a value of 0.0542 is ranked third, Energy consumption in processing a
ton of raw material with a value of 0.0533 is ranked fourth, Capital cost with a value of 0.0520 is ranked fifth, Payments to
providers of capital with a value 0.0515 is ranked sixth, Operating cost with a value of 0.0498 is ranked seventh, Electricity
consumption with a value of 0.0498 is ranked eighth, Sustainable construction methods result in increased capital costs
with a value of 0.0494 is ranked ninth, Maintenance cost with a value of 0.0472 is ranked tenth respectively.

Ranking of Economic Factors based on AHP

0.058
0.056
0.054
EIGEN VALUES

0.052
0.05
0.048
0.046
0.044
0.042

ECONOMIC FACTORS

Figure 2. Top 10 Economic Factors Selected Based on AHP

The bar graph shown in Figure 2 summarizes the results for economic indicators with respect to AHP. In this
Figure relative importance of the factors are discussed. Raw materials represent a major expense in construction, so timely
and proper purchase policy and rules will open opportunities for reducing costs. As construction projects involves the use
of different equipment and machinery, the Total fuel consumption with a value of 0.055094 was reported to second most
significant factor. Transportation cost got the value of 0.054214 and is ranked third. Robust supply chain is one of the most
important aspects of construction projects. It also plays a vital role in economic sustainability. This can be reduced if the
construction organization has proper vendor selection mechanism. High amount of energy is required to process different
types of raw materials. Energy consumption is ranked fourth. The project managers should not over process the raw
materials and should avoid unnecessary processing.

Capital cost got a value of 0.052038 and is ranked fifth. Capital costs are fixed, one-time expenses incurred on the
purchase of land, buildings, construction, and equipment. Project managers should not purchase unnecessary equipment etc.
A payment to providers of capital got a value of 0.051592 and is ranked sixth. It can affect the construction projects
economically. Sometime the government or other shareholders give loan to company for the projects. The yearly interest
and dividends paid to providers of capital should be properly planned. Operating cost got the value of 0.049847 and is
ranked seventh. Operating cost is incurred only when the equipment is operated. The operating cost of the equipment is
influenced by various parameters namely number of operating hours, location of job site, operating conditions, category of
equipment etc. Proper data logging can eliminate the redundant movements. Electricity consumption got the mean value of
0.049847 and ranked eightieth. Some companies look for indigenous solutions by having generators or small turbine
system. This may increase the operating cost of the overall project as well. Construction practioners are of the view that
Proceedings of The First International Conference on Industrial Engineering and Management Applications ISBN: 978-969-7710-01-0

sustainability will increase the capital cost. The factor sustainable construction increased capital cost got the value of
0.049414 and is ranked ninth. Sustainability safeguards future generations’ interests. But if managers focus on the
controlling of unnecessary capital cost then it will be flexible enough to do sustainable development. Maintenance cost got
the value of 0.047224 and is ranked tenth. It has a vital role in the construction processes economically. Machines may
slow down due to long hour operations. Total productivity maintenance may be handful to keep the machines up for most
of the time. The factor employees hired on the minimum wages is the least significant factor. With a value of 0.030171, it is
ranked last. In construction projects large no. of employees are hired below the minimum wages. This factor has less effect
economically on construction projects but can be significant if government imposes penalties. Also social aspect of the
employees should also be safeguarded.

6. CONCLUSION
Construction industrialists due to advancements in technology and techniques need to be economically competitive in
market. In this research paper, we have identified the factors that affect the sustainability in construction industries
economically. The significant factors identified in descending order are Raw material cost, Total fuel consumption,
Transportation cost, Energy consumption in processing a ton of raw material, Capital cost, Payments to providers of capital,
operating cost, Electricity consumption, Sustainable construction methods result in increased capital costs, and
Maintenance cost. These factors are for any type construction including road, building, and bridges construction. The
outcomes findings are distributed to the recognized construction specialists and supervisors. They can easily see the results
as well as the information relevant to their industry. The EXCEL tool can help them to determine the factors they have to
focus upon for enhancement of durability. They have to take initiative for ISO certification. Government should focus on
improving laws related to sustainable construction.

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