sustainability
Article
Inflation and Reinforced Concrete Materials: An Investigation
of Economic and Environmental Effects
Ahmed Yousry Akal
Citation: Akal, A.Y. Inflation and
Reinforced Concrete Materials: An
Investigation of Economic and
Environmental Effects. Sustainability
2023, 15, 7687. https://doi.org/
10.3390/su15097687
Academic Editor: Ramadhansyah
Putra Jaya
Received: 18 March 2023
Revised: 25 April 2023
Accepted: 27 April 2023
Published: 8 May 2023
Copyright: © 2023 by the author.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
Sustainability 2023, 15, 7687. https://doi.org/10.3390/su15097687
Civil Engineering Department, Higher Institute of Engineering and Technology, Kafrelsheikh,
Kafrelsheikh City 33511, Egypt; a_yousry85@yahoo.com
Abstract: Focusing on Reinforced Concrete (RC), the main building material worldwide, inflation and
CO2 emissions negatively impact the economic and environmental sustainability of the construction
industry and the environment, respectively. Therefore, it is important to investigate the economic
and environmental correlations and effects of RC in view of the inflation–CO2 emissions nexus.
Previous literature did not sufficiently scrutinize this issue, leaving behind huge knowledge gaps
for understanding (1) the inflation–RC material prices nexus, (2) the inflation–RC cost relationship,
and (3) the inflation–RC material CO2 emissions correlation. The knowledge body, additionally,
suffers from the controversial conclusion of prior literature that countering inflation reduces building
material prices; however, it does not reduce their associated CO2 emissions. To address these
loopholes, Spearman correlation test was employed to analyze data from Egypt’s construction market
on inflation, RC material prices, RC cost, and RC material CO2 emissions from 2011 to 2019. Spearman
test yielded that RC material prices and RC cost are directly correlated with inflation. In addition,
steel reinforcement prices are more sensitive to inflation than the prices of other RC materials.
By analyzing these outputs, using the Deviation Percentage approach, it has been found that 1%
increase in inflation drives up the prices of steel reinforcement and RC cost by 1.568% and 1.548%,
respectively. Further, increasing inflation by 1% increases RC material CO2 emissions, particularly
steel reinforcement by 15.968%. This implies that the inflation–construction material CO2 emissions
nexus has a direct correlation, not an inverse relationship, as mentioned in the archival literature.
These results guide contractors to define an accurate percentage-based risk margin against the effects
of inflation on overrunning their projects budgets. Importantly, they add to the knowledge body
the precise description of the inflation–building materials nexus, whether economically in terms of
construction material prices, or environmentally in light of building material CO2 emissions.
Keywords: inflation rate; construction material prices; reinforced concrete; CO2 emissions;
sustainability
1. Introduction and Theoretical Background
Over the years, the construction industry around the globe has suffered from the
implications of inflation. This stems from the relation that the fluctuation in inflation rates
causes significant variations in the prices of project resources [1]. This, in turn, limits the
ability of project stakeholders to accurately price their projects, either on the short- or
long-term. As a result, construction projects are usually implemented in highly ambiguous
environments with the risk of cost overrun [2]. Some severe statistics regarding the potential
effects of inflation on overrunning the costs of construction projects have been presented
in the study of Musarat et al. [3]. Unfortunately, the findings revealed that inflation can
increase the project cost by 3.8% to 11.63%. More severely, these increases can reach up
to 23.23% in the case of the long-term projects. Undoubtedly, whatever the knowledge of
project stakeholders, they will be unable to overcome such overruns without (a) knowing
the trends of inflation rates in their countries and (b) observing the decreasing or increasing
trend of the prices of project resources over time given the impact of the inflation rate [3].
https://www.mdpi.com/journal/sustainability
Sustainability 2023, 15, 7687 2 of 19

According to Shiha et al. [4], the resources in construction projects are three, comprising
materials, labor, and equipment. However, when studying the effect of inflation on prices of
construction resources, the focus should be more concentrated on building materials. This
interest is associated with the fact that executing construction projects significantly depends
on construction materials. Therefore, building materials represent about 60% of the whole
project cost [5]. Consequently, any changes in the prices of construction materials will have
a great consequence on the project cost [6]. Several studies (e.g., [7,8]) have supported this
fact that the fluctuation in construction material prices owing to inflation is among the
leading causes of cost overrun. Facing this challenge, Musarat et al. [3] advised the analysts
of the construction industry to scrutinize the behavior of building material prices and their
correlation patterns with the inflation rate. In accordance with Marzouk and Amin [6] and
Shiha et al. [4], realizing such investigation is important with respect to the construction
sector given twofold. First, it quantifies how material prices are affected by the countries’
economic conditions. Second, it demonstrates the inflation rates in construction material
prices over time. This, in turn, facilitates planning the timely purchasing of building
materials to minimize their associated effects on deviating the project total cost.
Disappointingly, the aforementioned critical importance of investigating the relation-
ship between inflation and construction material prices has not received an extensive
response from the researchers (see Table A1 of Appendix A). This limited interest is due to
two reasons. First, many analysts of building material prices have directed their efforts to
investigate the changes in material prices with respect to other macroeconomic variables,
such as foreign exchange rate [9] and cured oil prices [10]. Second, the rest of the scholars
(e.g., [4]) have focused on utilizing the latest predictive techniques to accurately quantify the
impacts of macroeconomic indicators on future fluctuations in material prices. Although
this research stream can clarify the consequences of macroeconomic factors on material
prices more precisely, the researchers (e.g., [11,12]) have excluded inflation from the lists of
their indicators. Indeed, ignoring studying inflation by prior analysts runs counter to the
fact that inflation is among the top influencing macroeconomic factors on varying construc-
tion material prices [13]. This implies that the critical macroeconomic indicators that trigger
drastic changes in construction material prices, mainly inflation have not been sufficiently
studied in the previous associated literature. This, unfortunately, limits supporting the
scholarly-based knowledge with more understanding of the inflation–building material
prices nexus.
Other limitations and drawbacks in the inflation-related literature can be grasped from
Table A1, as follows:
(1) First, the majority of the studies of Table A1, including Oghenekevwe et al. [14];
Adegbembo and Adeniyi [15]; Kalu et al. [16]; Oladipo and Olukayode [17]; Bedi-
ako et al. [18]; Oba [19]; Mohamed and Mahmoud [20]; and Dilip and Jesna [21]
utilized Pearson correlation test or the regression analysis to examine the relationship
between the inflation rate and building material prices. This is a critical flaw in these
works, indicating that their findings are totally inaccurate. The reason is completely
intelligible, as the inflation–material prices nexus is often nonlinear; accordingly, it
cannot be analyzed based on Pearson correlation test or the regression analysis. It can,
however, be scrutinized by utilizing Spearman correlation test [3,4].
(2) Second, the other works of Table A1, comprising Musarat et al. [3], Musarat et al. [22],
and Musarat et al. [23] determined the correlation between the inflation rate and
building material prices using Spearman correlation test. Further, they studied the
materials with the highest consumption rates in any construction market, i.e., steel
reinforcement, ordinary Portland cement, sand, and gravel. However, none of these
works focused on showing how the cost of the main associated construction item of
these materials, namely Reinforced Concrete (RC), can be affected by inflation. This is
a critical knowledge gap because RC is the most used and expensive building material
worldwide, represents a considerable percentage of the project cost, and possesses
severe implications on deviating the project budget [24,25].
Sustainability 2023, 15, 7687 3 of 19

(3) Third, despite the pioneering role of Musarat et al. [23] in terms of examining the
relationship between inflation and CO2 emissions of construction materials, their
conclusion is controversial. Musarat et al. [23] were able to collect data on infla-
tion and construction material prices. However, they were unable to gather data on
CO2 emissions of building materials for being analyzed with inflation. Alternatively,
they deemed the value of the executed works instead of the construction materials’
CO2 emissions in order to be explored against the inflation rate. Drawing on this
methodology, Musarat et al. [23] reached that reducing inflation reduces building
material prices, pushing the end-users to grab the opportunity of buying construction
materials at lower prices; accordingly, more construction works are executed. In the
same vein, implementing more construction works needs additional production of
construction materials, increasing CO2 emissions. This indirect and inverse relation-
ship between inflation and CO2 emissions implies that if governments play their roles
to control inflation in their countries, the CO2 emissions of building materials will be
increased. This is a controversial result and cannot be generalized without examining
the inflation–construction material CO2 emissions relationship directly, as will be
addressed in the current study.
The previous drawbacks and gaps clearly point out that it is a risk, and insufficient
to deem the conclusions of the inflation-related construction management literature when
(a) understanding the economic implications of inflation on the construction sector in
terms of fluctuating construction material prices and projects costs; and (b) interpreting the
environmental consequences of building materials on the environment in terms of their
CO2 emissions owing to the variations in inflation. In summary, two reasons are behind
this risk and inadequacy. The first reason is the inaccurate and inappropriate analytical
techniques and methodologies of previous works. The second reason is the knowledge gap
of studying the effect of inflation on varying the cost and CO2 emissions of RC, although RC
cost represents a major portion of projects budgets and its materials contribute significantly
to increasing global CO2 emissions [24,25]. These reasons give the impetus for the author to
adopt an accurate approach and utilize the most appropriate analyzing tools with a focus
on RC and its materials to answer the research questions of: (1) what is the relationship
pattern between inflation and RC material prices?; (2) which RC material in terms of its
price is more sensitive to the impact of inflation?; (3) what is the type and strength of the
relationship between inflation and RC cost; and (4) what is the type and strength of the
relationship between inflation and CO2 emissions of RC materials? The answers derived
from these questions support understanding the inflation–construction material prices
nexus and the inflation–construction material CO2 emissions relationship. This enhances
the knowledge of governments and policy-makers in the construction sector to better
counter the inflation and its consequences.
The remainder of the current research includes, in Section 2, the contextual background
and the period of the study, along with the associated justifications for being considered.
Subsequently, Section 3 presents the methodology and introduces the findings. This is
followed by Section 4, which analyzes and discusses the results and demonstrates their
implications. Then, Section 5 lists the limitations and outlines upcoming research directions.
Finally, Section 6 summarizes the paper.

2. Contextual Background
The answers of the research questions of the present work have been derived from data
related to Egypt’s construction industry. The data cover a critical period in Egypt, mainly
from 2011 to 2019. For four reasons, either Egypt’s construction sector or this critical period
offers an excellent opportunity to the author to prudently answer the research questions.
(1) First, from 2011 to 2019, Egypt experienced severe economic and political instabilities,
comprising (a) the January 2011 Egyptian revolution; (b) the June 2013 Egyptian
revolution; and (c) the November 2016 Egyptian government devaluation of the
Egyptian pound (LE) [4]. Certainly, whatever the reforms taken by the Egyptian
Sustainability 2023, 15, 7687 4 of 19

government during this period, the inflation lesion has appeared and impacted the
prices of the materials used in all sectors. For instance, the Central Agency for Public
Mobilization and Statistics (CAPMAS)—Egypt’s official statistical agency—declared
that the price of hollow cement bricks/1000 bricks increased by 211.864% from 2011
to 2019 [26]. Such sharp increases can reveal how construction material prices can
be affected by macroeconomic variables, particularly when they result from unstable
economic and political conditions.
(2) Second, concerning RC—the wide utilized building material in the Middle East and
Egypt, without exception [24]—Hassanein and Khalil [27] reported that RC materials,
specifically steel reinforcement and cement, represent 43.98% and 32.29%, respectively,
of the construction costs of the Egyptian RC buildings. More importantly, the statistical
data of CAPMAS [26] highlighted that steel reinforcement, ordinary Portland cement,
sand, and gravel—the major components of RC in Egypt—witnessed severe increases
in their prices from 2011 to 2019. In 2011, the average prices of steel reinforcement/ton,
ordinary Portland cement/ton, sand/m3 , and gravel/m3 were 4778.25 LE, 528.7 LE,
31.83 LE, and 69.15 LE, respectively. Yet, in 2019, the average prices of these materials
were 11,892.56 LE, 960 LE, 87.5 LE, and 155 LE. Of course, these sharp movements
in the prices of these materials have been affected by inflation during this period.
Additionally, the implications of these increases lead to significant changes in the cost
of their construction item, i.e., RC. Hence, by collecting the data associated with this
period, encompassing inflation rates, RC material prices, and RC cost, this study can
define the inflation–RC material prices nexus and the inflation–RC cost relationship.
Fortunately, CAPMAS [26] and CAPMAS [28] in Egypt collect credible statistics on
such data, providing reliable answers to the first three questions of the present work.
(3) Third, focusing on the fourth question of the current paper, CAPMAS [29] has signifi-
cant statistics concerning the annual consumed quantities of RC materials in Egypt.
However, from the data of CAPMAS [29], only the consumed quantities of steel
reinforcement will be relied upon. The reason behind this consideration will be
demonstrated later in Section 3. Subsequently, by multiplying the annual consumed
quantities of steel reinforcement by the corresponding rate of CO2 emissions per unit,
using the data of a report relevant to Egypt’s construction industry (i.e., [30]), the
annual CO2 emissions of steel reinforcement can be defined. This output, in turn,
along with the annual inflation rates of CAPMAS [28], provides the author with
trustworthily data to directly investigate the pattern of the inflation–building material
CO2 emissions relationship.
(4) Fourth, the reason for studying this time period of Egypt’s construction sector, specif-
ically from 2011 to 2019, is ascribed to the availability of data, particularly those
related to the consumed quantities of RC materials. Although this adds a limitation
to the present work in terms of the novelty of data, the above-mentioned justifica-
tions illustrate that the findings of the current research will be based on reliable data.
This enhances the precision of the derived conclusions for providing the scholarly
based-knowledge with more accurate implications concerning the economic and
environmental consequences of inflation on construction material prices and their
associated CO2 emissions, respectively.

3. Research Methodology
This study analyzes four variables. While inflation is the independent variable, the
dependent variables are prices of RC materials, RC cost, and CO2 emissions of steel
reinforcement. To examine the relationship between inflation and each of these dependent
variables, the methodology consists of four phases. First, data on the variables have been
collected from official sources and reputable references related to Egypt’s construction
sector. Second, the gathered data have been initially assessed to define their behavior
(i.e., linear or nonlinear). According to Alaloul et al. [31], this is a very significant step
because determining the appropriate correlation test is associated with the behavior of

Sustainability 2023, 15, 7687
dependent variables are prices of RC materials, RC cost, and CO2 emissions of steel rein-
forcement. To examine the relationship between inflation and each of these dependent
variables, the methodology consists of four phases. First, data on the variables have been
collected from official sources and reputable references related to Egypt’s construction
sector. Second, the gathered data have been initially assessed to define their behavior5(i.e.,
of 19
linear or nonlinear). According to Alaloul et al. [31], this is a very significant step because
determining the appropriate correlation test is associated with the behavior of the data.
Third, the compiled data have been statistically analyzed by calculating the Annual Per-
the data. Third, the compiled data have been statistically analyzed by calculating the
centage of Deviation (APD) with respect to each variable. This step can help in observing
Annual Percentage of Deviation (APD) with respect to each variable. This step can help in
the decreasing or increasing trend of the variables over time and carrying out their corre-
observing the decreasing or increasing trend of the variables over time and carrying out
lation analysis [32]. Fourth, by knowing the behavior of the data and the values of the
their correlation analysis [32]. Fourth, by knowing the behavior of the data and the values
APD of the variables, the proper correlation test can be appointed and performed to define
of the APD of the variables, the proper correlation test can be appointed and performed to
the relationship between inflation and each dependent variable. Figure 1 outlines the four
define the relationship between inflation and each dependent variable. Figure 1 outlines
steps of the methodology.
the four steps of the methodology.
Figure
Figure 1.
1. Methodology
Methodologyof
of the
the study.
study.
3.1. Data Collection
In the current paper, CAPMAS has been relied upon to collect data on inflation,
RC material prices, and the consumed quantities of steel reinforcement from 2011 to
2019. CAPMAS is an Egyptian official statistical agency. Its objectives are associated with
collecting, processing, analyzing, and disseminating statistical data about Egypt’s economic
and social conditions. Among its statistical data are (a) the annual inflation rate of the
urban in Egypt [28]; (b) the Monthly Bulletin of Average Retail Prices of Major Important
Building Materials [26]; and (c) the Annual Bulletin of Construction and Building Statistics
for Private Sector Companies [29]. Based on these data, all the variables of the study have
been defined, as follows:
 Sustainability 2023, 15, 7687 6 of 19

(1) Inflation: CAPMAS [28] has been employed to identify the annual inflation rate in
Egypt from 2011 to 2019. Figure 2 shows the rates of inflation during this time period
according to CAPMAS [28].
(2) RC material prices: CAPMAS [26] has been utilized to specify the prices of RC
materials, comprising steel reinforcement, ordinary Portland cement, sand, and gravel.
It is worth mentioning that building material prices in CAPMAS [26] are monthly
prices. Therefore, the monthly prices per year with respect to each RC material have
been averaged to determine its annual price. The column of “average prices of RC
materials” in Table 1 presents the average annual prices of steel reinforcement/ton,
ordinary Portland cement/ton, sand/m3 , and gravel/m3 .
(3) RC cost: According to Marzouk and Amin [6], in Egypt’s construction sector, the RC
cost from materials is 51%. Yet, the other percentage (i.e., 49%) is pertinent to the costs
of site overhead, equipment, and labor. Focusing on RC cost from materials, Marzouk
and Amin [6] defined the percentages of 40%, 9%, and 2% for determining the RC
cost from steel reinforcement, cement, and sand and gravel, respectively. Hence, by
multiplying these percentages in the annual prices of their corresponding materials,
as Equation (1) demonstrates, the annual RC cost can be specified. The column of “RC
cost” in Table 1 illustrates the annual RC cost from 2011 to 2019.

Sustainability 2023, 15, x FOR PEER REVIEW RC cost = ∑ 40% × steel reinforcement + 9% × cement + 2% × sand &6gravel
of 19 (1)

(4) CO2 emissions: Although CAPMAS [29] has the annually consumed quantities of
RC materials, its data can be relied upon to get the annual consumed quantities of
3.1. Data Collection
steel reinforcement only. This stems from two facts. First, the utilized quantities of
In thesand andpaper,
current gravelCAPMAS
are aggregated andrelied
has been presented
upontogether.
to collectSecond,
data onthe used quantities
inflation, RC
of cement in CAPMAS [29] may represent many types of cement,
material prices, and the consumed quantities of steel reinforcement from 2011 to 2019. such as ordinary
CAPMAS Portland cement,
is an Egyptian Sulphate
official resistant
statistical cement,
agency. Itsand white cement.
objectives These types
are associated withof cement
col-
have many
lecting, processing, applications
analyzing, in the construction
and disseminating sector,
statistical comprising
data about Egypt’s the works
economicof plain
and socialconcrete, RC,Among
conditions. and finishing. Hence,
its statistical datathe aredata
(a) of
theCAPMAS [29] arerate
annual inflation accurate
of theto get
the annually consumed quantities of steel reinforcement only.
urban in Egypt [28]; (b) the Monthly Bulletin of Average Retail Prices of Major Important Although this adds
Building Materials [26]; and (c) the Annual Bulletin of Construction and Building Statistics data.
a limitation to the present paper, it is important to build the results on reliable
for PrivateIn accordance
Sector with [29].
Companies Enterprise
Based [30], the CO
on these 2 emissions
data, of steel of
all the variables reinforcement/ton
the study have are
1890 kg. Enterprise
been defined, as follows: [30] has been adopted as a reference because its scope is relevant
to Egypt’s construction industry. By multiplying this rate in the annual consumed
(1) Inflation: CAPMAS [28] has been employed to identify the annual inflation rate in
quantities of steel reinforcement, using the data of CAPMAS [29], this study can
Egypt from 2011 to 2019. Figure 2 shows the rates of inflation during this time period
present the annual CO2 emissions of steel reinforcement, as the column of “CO2
according to CAPMAS [28].
emissions” in Table 1 includes.

35
29.5
30
Inflation Rate (%)

25
20
13.8 14.5
15 10.4
10.1 9.5 10.1 9.2
10 7.1
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Year
Figure 2. Egypt’s inflation rate from 2011 to 2019 [28].
Figure 2. Egypt’s inflation rate from 2011 to 2019 [28].

(2) RC material prices: CAPMAS [26] has been utilized to specify the prices of RC mate-
rials, comprising steel reinforcement, ordinary Portland cement, sand, and gravel. It
is worth mentioning that building material prices in CAPMAS [26] are monthly
prices. Therefore, the monthly prices per year with respect to each RC material have
been averaged to determine its annual price. The column of “average prices of RC
Sustainability 2023, 15, 7687 7 of 19

Table 1. Data of the dependent variables of the study from 2011 to 2019.

Average Prices of RC Materials CO2 Emissions

Year Steel RC Cost (LE) Steel
Cement
Reinforcement Sand (LE/M3 ) Gravel (LE/M3 ) Reinforcement
(LE/Ton)
(LE/Ton) (Ton CO2 )
2011 4788.25 528.7 31.836 69.162 1964.903 560,190.33
2012 4727.75 525.8 29.972 69.617 1940.414 418,406.31
2013 5145.833 635.1 33.864 75.671 2117.683 306,639.27
2014 5200.083 749.717 36.939 80.879 2149.864 481,997.25
2015 4995.048 717.25 42.909 87.493 2065.18 882,507.15
2016 6300.827 754.683 55.862 101.502 2591.399 1,080,053.73
2017 10,879.79 868.85 67.967 122.315 4433.918 13,247,822.7
2018 12,525.67 999.833 79.667 144.45 5104.734 2,146,123.35
2019 11,892.86 960 87.5 155 4848.392 2,219,213.43

3.2. Initial Assessment of the Data

The initial assessment of the data of Figure 2 and Table 1 aims at defining whether they
follow a linear or nonlinear behavior. By answering this question, the proper correlation
test can be specified to investigate the relationship between the inflation rate and each of
RC material prices, RC cost, and CO2 emissions of steel reinforcement [31]. In accordance
with Xiao et al. [33] and Musarat et al. [3], if two variables have a linear relationship,
their correlation can be investigated based on Pearson correlation test. If not, Spearman
correlation test must be called upon. To know whether Pearson or Spearman correlation
test is the proper test for analyzing the data of the present research, Figures 3–5 have
been developed. As shown in these figures, the inflation rate occupies the x-axis. Yet,
the y-axes of Figures 3–5 represent RC material prices, RC cost, and CO2 emissions of
steel reinforcement, respectively. By taking a deep insight into these figures, it can be
observed that each figure has an imaginary trend line. More importantly, all the values of
the variables of RC material prices, RC cost, and CO2 emissions of steel reinforcement are
extremely far from the drawn trend lines. This observation, in turn, implies that the data
associated with RC material prices, RC cost, and CO2 emissions of steel reinforcement have
a nonlinear relationship with the inflation rate [23]. Accordingly, their correlation tests with
the inflation rate can be explored, utilizing Spearman correlation test.

3.3. Statistical Analysis of the Data: Annual Percentage of Deviation

In order to observe the yearly decreasing or increasing percentage in the inflation
rate, RC material prices, RC cost, and CO2 emissions of steel reinforcement, Equation (2)
has been employed. Equation (2) presents the APD with respect to an individual variable.
Building on Equation (2), the APD of an individual variable can have a positive or negative
value. The positive value denotes an increase in the value of the studied variable from
the previous year. Yet, the negative value means a decrease in the value of the studied
variable from the prior year [3]. Relying upon Equation (2), Table 2 has been prepared to
demonstrate the values of the APD of the inflation rate, RC material prices, RC cost, and
CO2 emissions of steel reinforcement.

Current year − Previous year

Annual Percentage of Deviation (APD) = × 100 (2)
Previous year
Sustainability 2023,
Sustainability 2023, 15,
15, 7687
x FOR PEER REVIEW 8 8of
of 19
19

14,000
Steel Reinforcement

12,000
10,000
Pricee (LE)

8,000
6,000
4,000
2,000
0
5 10 15 20 25 30
Inflation Rate (%)

1200
Cement Price (LE)

1000
800
600
400
200
0
5 10 15 20 25 30
Inflation Rate (%)

100
Sand Price (LE)

80
60
40
20
0
5 10 15 20 25 30
Inflation Rate (%)

180
Gravel Price (LE)

150
120
90
60
30
0
5 10 15 20 25 30
Inflation Rate (%)

Figure 3.
Figure Scatter diagram
3. Scatter diagram of
of the
the inflation
inflation rate
rate and
and RC
RC material
material prices.
prices.
Sustainability 2023, 15, x FOR PEER REVIEW 9 of 19
Sustainability
Sustainability2023,
2023,15,
15,x7687
FOR PEER REVIEW 9 9ofof19
19

6000
6000

5000
5000
(LE)

4000
Cost (LE)

4000

3000
RCCost

3000
RC

2000
2000

1000
1000

00
55 10
10 15
15 20
20 25
25 30
30
InflationRate
Inflation Rate(%)
(%)

Figure
Figure
Figure 4.Scatter
4. Scatter
4. Scatter diagram
diagram ofthe
of the
diagram of theinflation
inflation
inflation rate
raterate and
andand RCcost.
RC RC cost.
cost.

14,000,000
14,000,000
12,000,000
12,000,000
Steel
Reinforcement (Ton)
EmissionsofofSteel
(Ton)

10,000,000
10,000,000
8,000,000
Reinforcement
CO2 2Emissions

8,000,000
6,000,000
6,000,000
4,000,000
4,000,000
CO

2,000,000
2,000,000

00
55 10
10 15
15 20
20 25
25 30
30
InflationRate
Inflation Rate(%)
(%)

Figure 5. Scatter diagram of the inflation rate and CO2 emissions of steel reinforcement.
Figure5.
Figure 5.Scatter
Scatterdiagram
diagramof
ofthe
theinflation
inflationrate
rateand
andCO
CO22emissions
emissionsofofsteel
steelreinforcement.
reinforcement.
Table 2. Yearly percentages of deviation of the variables of the study.
3.3. Statistical
3.3. StatisticalAnalysis
Analysis of of the
the Data:
Data:Annual
Annual Percentage
Percentage of of Deviation
Deviation
In order Average
order to Prices
to observe
observe the of RC
the yearlyMaterials
yearly decreasing
decreasing or or increasing percentageCO
increasing percentage Emissions
in the
2the inflation
In in inflation
Year Inflation rate, RC material
Steel prices, RC cost, and CO 2 emissions of steel RC Cost
reinforcement, Equation
Steel (2)
rate, RC material prices, Cement RC cost, andSandCO2 emissions
Gravel of steel reinforcement, Equation (2)
Reinforcement
has been employed. Equation (2) presents the APD with respect to an Reinforcement
individual variable.
has been employed. Equation (2) presents the APD with respect to an individual variable.
2011–2012 −29.703 Building
−1.263
Building onEquation
on Equation−(2),(2),
0.548 theAPD
the APD− of
of anindividual
5.855
an individual0.657variablecan
variable can haveaapositive
−1.246
have positive−or
or negative
25.301
negative
2012–2013 33.803 value. The
value.8.843 positive value
The positive value20.787 denotes
denotes anan increase in the
increase in 8.696
12.987 value of
the value of the the studied variable
studied variable
9.135 from
from the
−26.712 the
previous
previous year. Yet, the negative
year. Yet, the18.047
negative valuevalue means a decrease
means a decrease in the value of the studied variable
2013–2014 6.316 1.054 9.080 6.883 in the value 1.520 of the studied variable
57.187
from the
from the prior
prior year
year [3].
[3]. Relying
Relying uponupon Equation
Equation (2),(2), Table
Table 22 has
has been
been prepared
prepared to to demon-
demon-
2014–2015 2.970 strate−3.943
the values of − 4.330
the APD of 16.162
the inflation 8.178
rate, RC material−3.939
prices, RC 83.094
cost, and CO22
strate the values of the APD of the inflation rate, RC material prices, RC cost, and CO
2015–2016 32.692 emissions of steel
26.141of
emissions steel reinforcement.
reinforcement.
5.219 30.188 16.012 25.480 22.385
2016–2017 113.768 72.672 15.128 21.668 Current year71.101
20.504 − Previous year1126.589
AnnualPercentage
Annual Percentageof
ofDeviation
Deviation(APD) = Current year − Previous year ×
(APD) = ×100
100 (2)
(2)
2017–2018 −50.847 15.128 15.075 17.214 18.097 Previous year
15.129
Previous year −83.800
2018–2019 −36.552 −5.052 −3.984 9.833 7.303 −5.021 3.406
Average 9.056 14.197 8.174 13.909 10.791 14.020 144.605
Sustainability 2023, 15, 7687 10 of 19

3.4. Statistical Correlation of the Data: Spearman Correlation Test

The initial assessment of the data shows that Spearman test is the adequate test for
examining the nonlinear relationship between inflation and each dependent variable of RC
material prices, RC cost, and CO2 emissions of steel reinforcement. Spearman correlation
test, as Equation (3) illustrates, has a statistical coefficient (RS ) ranging from −1 to +1 [3].
This statistical coefficient aims at defining both the type and strength of the relationship
between two variables. On this scale, the value closer to ±1 indicates a strong correlation
between variables, where 0.0 to 0.19 means a very weak relationship, 0.20 to 0.39 means a
weak relationship, 0.40 to 0.59 means a moderate relationship, 0.60 to 0.79 means a strong
relationship, and 0.80 to 1.0 means a very strong relationship. On the other hand, the
sign classifies the relationship type into (a) a direct relationship if the sign of Spearman
correlation coefficient is positive and (b) an inverse relationship if the sign of Spearman
correlation coefficient is negative [32].

6∑ d2
 
Rs = 1 − , −1 ≤ R S ≤ +1 (3)
n3 − n

where Rs is Spearman correlation coefficient, d is the difference between variables, and n is

the number of variables.
In accordance with Equation (3), the correlation analysis between the inflation rate
and each of RC material prices, RC cost, and CO2 emissions of steel reinforcement has been
carried out, utilizing SPSS version 16.0. This analysis has been performed based on the
values of the APD of these variables, as included in Table 2. The findings of Spearman cor-
relation test have been presented in Table 3, encompassing Spearman correlation coefficient
and the type and strength of the relationship between inflation and each of RC material
prices, RC cost, and CO2 emissions of steel reinforcement. This key result of the current
research will be explored and discussed in detail in Section 4.

Table 3. Results of Spearman correlation test.

Spearman Type of the Strength of the

Dependent Variable Correlation Relationship with Relationship with
Coefficient (RS ) the Inflation Rate the Inflation Rate
Price of Steel
+0.571 Direct relationship Moderate relationship
Reinforcement
Price of Cement +0.548 Direct relationship Moderate relationship
Price of Sand +0.357 Direct relationship Weak relationship
Price of Gravel +0.357 Direct relationship Weak relationship
RC Cost +0.571 Direct relationship Moderate relationship
CO2 Emissions of
+0.524 Direct relationship Moderate relationship
Steel Reinforcement

4. Analysis and Discussion

In this section, the results of the present paper will be analyzed and discussed in
terms of (a) the behavior of the gathered data based on the depicted scatter diagrams
in Figures 3–5; (b) the values of the APD of Table 2; and (c) the outputs of Spearman
correlation test of Table 3. More significantly, this section will highlight the implications of
the findings.

4.1. Behavior of the Data

The behavior of the data of each dependent variable of RC material prices, RC cost,
and CO2 emissions of steel reinforcement has been initially examined with the inflation-
related data. Figures 3–5 present the outcomes of this initial assessment. As shown in each
figure, each includes a scatter diagram to show the coordinates of its data along with an
Sustainability 2023, 15, 7687 11 of 19

imaginary trend line to reflect whether the coordinates of its data are close or far from
the drawn trend line. Drawing upon the trend lines of Figures 3–5, it can be observed
that the coordinates of the data of each figure are extremely far from its trend line. This
implies that each of RC material prices, RC cost, and CO2 emissions of steel reinforcement
follows a nonlinear behavior with the inflation rate. This finding has a valuable implication:
the variations in RC material prices, RC cost, and CO2 emissions of steel reinforcement
are not uniform/regular over time with inflation rate-related fluctuations. In such case,
the proper correlation test for investigating the relationship between inflation and any of
these dependent variables is Spearman correlation test. Musarat et al. [3] in Malaysia and
Musarat et al. [22] in Pakistan support this conclusion that neither Pearson correlation
test nor the regression analysis is suitable for exploring the relationship between inflation
and construction material prices. Only Spearman correlation test is the proper analytical
technique for achieving this purpose. This wide agreement suggests a reliable procedure for
the analysts: the inflation–building material prices nexus is always nonlinear, and relying
upon Spearman correlation test, it can be explored. In the same context, it advises the
prior analysts, who scrutinized the inflation–building material prices relationship building
on Pearson correlation test or the regression analysis (see Table A1), to revise and adjust
their results.

4.2. Annual Percentage of Deviation

The APD has been determined for each variable of the inflation rate, RC material
prices, RC cost, and CO2 emissions of steel reinforcement from 2011 to 2019. The APD has
been specified using Equation (2). As explained by Musarat et al. [32], the APD occurs in
a positive or negative manner. The positive and negative signs of the APD mean that the
value of the studied variable has been increased and decreased, respectively, from the prior
year. Table 2 pinpoints the values of the APD of the four variables of the present study.
With a focus on the inflation rate, Table 2 reveals that most of its APD values are positive,
indicating that there is a continuous increase in inflation over most of the years under study.
On the other hand, the few negative values of the APD of inflation denote that the Egyptian
government has exerted its efforts to reduce inflation; however, its economic and political
instabilities from 2011 to 2019 hindered achieving its endeavors sufficiently. This analysis
implies that the more the decline in the national economy is, the higher the increase in the
inflation rate becomes. El-Dash and Abdel Monem [34] also agree with this conclusion,
that inflation is highly affected by the countries’ economic circumstances.
Looking at the column of “average prices of RC materials” in Table 2, other con-
sequences of Egypt’s economic and political instabilities can be grasped, mainly on the
construction market. In the column of “average prices of RC materials”, the highest positive
APD has been recorded for steel reinforcement, with an increase of +72.672% in 2016–2017,
followed by sand with an increase of +30.188% in 2015–2016, ordinary Portland cement
with an increase of +20.787% in 2012–2013, and gravel with an increase of +20.504% in
2016–2017. These statistics, in turn, reflect that the severe economic and political conditions
in Egypt cause serious impacts on increasing the prices of RC materials. However, steel
reinforcement prices have been more influenced by these conditions than the prices of
ordinary Portland cement, sand, and gravel. The implication of this conclusion clearly
appears in the column of “RC cost” in Table 2 that the highest positive APD of RC cost has
been occurred in 2016–2017, with an increase of +71.101%. This is the same year where
the prices of steel reinforcement have received their highest positive APD (i.e., +72.672%).
These highest values of the APD of steel reinforcement prices and RC cost direct an im-
portant message to the Egyptian contractors: their focus should be more concentrated on
steel reinforcement prices when calculating RC cost. In the same context, the Egyptian
scholars should support their contractors with practical models to forecast the contingency
cost of RC given the fluctuations in steel reinforcement prices. The availability of such
models helps contractors in defining future reasonable budget of steel reinforcement needs,
reducing the risk of overrunning RC cost.
Sustainability 2023, 15, 7687 12 of 19

Focusing on the APD of RC material prices and RC cost along with the APD of the
inflation rate, a vital observation can be highlighted. In the year 2014–2015, the APD of
inflation is +2.970%. This means an increase in the inflation rate from 2014 to 2015. As
expected, the values associated with the APD of RC material prices and RC cost should be
increased. This has been informed from prior literature (e.g., [7]) that increasing inflation
increases building material prices, causing cost overrun of the projects. Surprisingly, the
negative signs of the APD of steel reinforcement (APD = −3.943%), ordinary Portland
cement (APD = −4.330%), and RC cost (APD = −3.939%) indicate a decrease in their
values from 2014 to 2015. On the other hand, the positive signs of the APD of sand
(APD = +16.162%) and gravel (APD = +8.178%) signify an increase in their values from
2014 to 2015. This, in turn, informs that the prices of steel reinforcement and ordinary
Portland cement and RC cost have an inverse correlation with inflation, whereas the prices
of sand and gravel have a direct relationship with inflation. On the contrary, the year
2018–2019 illustrates that the APD of the inflation rate is −36.552%, reflecting a decrease in
the inflation rate from the previous year. Predictably, the values of the APD of RC material
prices and RC cost should record significant decreases. However, the positive signs of the
APD of sand (APD = +9.833%) and gravel (APD = +7.303%) show that the prices of sand
and gravel have been increased from 2018 to 2019. Yet, the negative signs of the APD of
steel reinforcement (APD = −5.052%), ordinary Portland cement (APD = −3.984%), and
RC cost (APD = −5.021%) confirm that their prices and RC cost have been increased from
2018 to 2019. This summarizes that the prices of steel reinforcement and ordinary Portland
cement as well as RC cost have a direct correlation with inflation. Yet, the prices of sand
and gravel have an inverse relationship with inflation.
Indeed, the findings of the year 2014–2015 and the year 2018–2019 concerning the
relationship between inflation and each of RC material prices and RC cost are different.
However, each of which is very accurate because the outputs are based on reliable data and
an accurate methodology. This difference between the results of the year 2014–2015 and
the year 2018–2019 raises an important issue: the impact of inflation on the price of the
same construction material can differ from year to year. The same concern is associated
with the inflation rate and CO2 emissions of steel reinforcement (see the column of “CO2
emissions” in Table 2). For example, in the year 2011–2012, the APD signs of inflation
(APD = −29.703%) and CO2 emissions of steel reinforcement (APD = −25.301%) are neg-
ative, indicating that the CO2 emissions of steel reinforcement have a direct correlation
with inflation. Conversely, in the year 2018–2019, although the APD sign of inflation
(APD = −36.552%) is negative, the APD sign of CO2 emissions of steel reinforcement
(APD = +3.406%) is positive. This implies that the CO2 emissions of steel reinforcement
have an inverse relationship with inflation. All of these aforementioned analyses reveal that
the correlation between inflation and each dependent variable of RC material prices, RC
cost, and CO2 emissions of steel reinforcement has two scenarios. While the first scenario
leads to a direct relationship between inflation and each of the dependent variables, the
second scenario denotes an inverse correlation.
To know which scenario is the prevalent between inflation and each dependent vari-
able, two consecutive steps can be followed. While the first phase is exploratory, the second
step is a conformity stage. Focusing on the exploratory step, the AAPD (average of the
values of the APD) from 2011 to 2019 with respect to inflation, RC material prices, RC cost,
and CO2 emissions of steel reinforcement will be defined. By investigating the sign of the
AAPD of each dependent variable with its counterpart of the inflation rate, the study can
largely determine the dominant correlation scenario between inflation and each dependent
variable. Then, the role of the second step appears to confirm the outputs of the exploratory
step building on applying Spearman correlation test on the APD values of the variables
from 2011 to 2019. Although the tools of these two steps have been mentioned in the
related literature (e.g., [3,23]), they have not been arranged in such manner. This adds to
the knowledge body how the correlation between inflation and another dependent variable
can be precisely specified. Regarding the exploratory step, the last row in Table 2 presents
Sustainability 2023, 15, 7687 13 of 19

the AAPD of each variable of the current work. As this row demonstrates, the signs of the
AAPD of the independent variable of inflation and the dependent variables of RC material
prices, RC cost, and CO2 emissions of steel reinforcement are positive. These positive signs
show that the most likely scenario concerning the correlation between inflation and each
dependent variable refers to a direct relationship. The next subsection will verify this result
further relying upon the conformity step of Spearman correlation test.

4.3. Spearman Correlation

Table 3 introduces Spearman correlation coefficients along with the type and strength
of the relationship between inflation and each dependent variable. The positive signs of
Spearman correlation coefficients signify that the relationship type between inflation and
each dependent variable has a direct correlation. This verifies the outputs of the prior
exploratory step of Section 4.2 that increasing inflation causes a rise in RC material prices,
RC cost, and CO2 emissions of steel reinforcement, and vice versa. This result can be
more illustrated building on the AAPD of Table 2. When inflation has been deviated up to
+9.056%, the prices of steel reinforcement, ordinary Portland cement, sand, and gravel have
been driven up to 14.197%, 8.174%, 13.909%, and 10.791%, respectively. In the same vein, RC
cost has been increased by 14.020%. Further, the CO2 emissions of steel reinforcement have
been raised by 144.605%. By dividing the AAPD of each dependent variable by the AAPD
of the inflation rate, a significant ratio can be presented for observing how the increase in
inflation by 1% affects each dependent variable. It can be concluded that 1% increase in
inflation leads to an increase in the prices of steel reinforcement, ordinary Portland cement,
sand, and gravel by 1.568%, 0.903%, 1.534%, and 1.191%, respectively. Moreover, RC cost
can increase by 1.548%. On the other hand, the CO2 emissions of steel reinforcement can
increase by 15.968%. Determining these percentages has three implications. First, they
guide the Egyptian contractors to define a reasonable risk margin to cover the influences of
inflation on increasing RC material prices and RC cost. Second, they lead the officials in the
Egyptian government to quantify the consequences of RC materials on the environment
according to their CO2 emissions given increasing inflation. Third, they put forward a new
area for being approached: developing models for defining the percentages of increase
in RC material prices and RC cost owing to the rise in inflation. This area will verify the
accuracy of the percentages identified in this study, providing the knowledge body with
more exact results.
By taking a deep insight at Spearman correlation coefficients of RC material prices,
an important outcome can be grasped. Steel reinforcement prices have the highest corre-
lation coefficient with inflation (i.e., RS = +0.571), followed by ordinary Portland cement
(RS = +0.548), sand (RS = +0.357), and gravel (RS = +0.357). These values on the scale
of Spearman correlation coefficient mean that the prices of steel reinforcement and ordi-
nary Portland cement have a moderate correlation with inflation. Yet, the prices of sand
and gravel have a weak correlation with the inflation rate. These findings summarize
that the prices of steel reinforcement and ordinary Portland cement are more sensitive
to the changes in inflation than the prices of sand and gravel. However, by comparing
Spearman correlation coefficients of the prices of steel reinforcement (RS = +0.571) and
ordinary Portland cement (RS = +0.548), the prices of the former can be described as the
most sensitive ones to the variations in inflation. This analysis defines the significance
degrees of RC material prices on deviating RC cost. This directs industry stakeholders to
know which RC material they should focus on for accurately estimating RC cost. From
Table 3, additionally, other valuable information can be clarified: Spearman correlation
coefficient of the inflation–RC cost nexus is +0.571, indicating that RC cost has a moderate
relationship with inflation. This correlation highlights that even if the relationship between
the inflation rate and RC cost is moderate, this correlation contributes considerably to
overrunning the projects budgets. This realizes from the fact that RC is a chief building
material in most construction projects. More critically, the prices of its materials represent a
substantial percentage of the projects costs [24]. Accordingly, its sensitivity for being in-
Sustainability 2023, 15, 7687 14 of 19

creased with inflation leads to sharp increases in the financial plans of construction projects.
Unfortunately, this impacts the economic sustainability of the construction industry in
terms of lessening the financial viability of its projects. Facing these impacts of inflation,
this study suggests the following recommendations.
(1) First, it urges governments to work in leaps and bounds for improving their economic
conditions. This is a vital strategy for making their macroeconomic environments
more stable. This contributes significantly to controlling the impacts of inflation on
their construction sectors [35].
(2) Second, it asks the officials in the construction community to shorten the duration
of their projects, mainly when they are implemented in countries with high inflation
rates [36,37]. Musarat et al. [3] illustrated the importance of this suggestion that
inflation poses fewer effects on overrunning the costs of the short-term projects than
the projects having a lengthy duration.
(3) Third, as explained by Musarat et al. [3], this paper highly recommends that in the
case of the long-term projects, the prices of building materials must be forecasted
relying upon the past inflation rates for being considered in the preliminary Bill of
Quantities to avert cost overrun.
Away from the economic implications of the inflation–RC cost nexus, the inflation–RC
materials relationship underlines critical effects on environmental sustainability. Table 3
shows these effects that the CO2 emissions of steel reinforcement have a correlation coeffi-
cient of +0.524, indicating a moderate direct relationship with inflation. This correlation
informs that the higher the inflation rates are, the higher the CO2 emissions of steel reinforce-
ment become, and vice versa. This precious result is long overdue to correct the inaccurate
conclusion of Musarat et al. [23] that reducing inflation reduces building material prices;
however, it does not assist in reducing their CO2 emissions. The reason why reducing infla-
tion leads to a reduction in CO2 emissions of construction materials is principally ascribed
to the fact that it reduces prices not only in the construction sector, but also in all sectors as
a whole. This, in turn, reduces the production costs of all products in order to be selling at
lower prices. This pushes contractors to purchase more construction materials before prices
rise again [23]. Similarly, manufacturers of building materials are encouraged to seize
this opportunity to implement the controlling systems of the construction materials’ CO2
intensity at reasonable costs. At this point, even if more building materials are produced to
cover the needs of contractors, controlling the emitted CO2 intensity can effectively reduce
the total resulting amount of CO2 emissions. This conclusion is supported by data from a
report of Al Ezz Dekheila steel company—a leading Egyptian steel company—that when
it implemented an advanced energy management system, in compliance with ISO 50001,
it has been able to reduce the emitted CO2 intensity, causing a significant reduction of
84,879 tons of CO2 emissions/year [38]. This positive result highlights that manufacturers
of construction materials have an important role in controlling the implications of building
materials on environmental sustainability. Nevertheless, this role is associated with the
support of governments in terms of combating inflation to reduce prices, causing supplies
are available for all sectors at lower costs.
This study illustrates another role for governments to play to reduce construction
materials’ CO2 emissions, particularly those associated with RC materials. This role is that
they should cooperate with the scholars to direct their research streams toward developing
green design mixes of RC by partially replacing high-carbon ordinary Portland cement
with low-carbon materials, such as fly ash [39]. Previous studies (e.g., [39]) confirmed that
this research direction is very useful toward highly reducing CO2 emissions of RC. Another
scholarly strand in this area is that researchers should pay their attention toward utilizing
the wastes of the construction industry or those of the other sectors instead of aggregates
(e.g., [40,41]) and ordinary Portland cement (e.g., [42,43]) when designing their mixes of
RC. This research stream will not only contribute to affording sustainable alternatives of
RC [44], but will also reduce the use of new resources during their production [45]. In
this respect, the scholars have to focus their attempts on developing these green design
Sustainability 2023, 15, 7687 15 of 19

mixes as soon as possible, keeping in mind that they should be cost-effective solutions.
This will pay governments to generalize the implementation of the developed design mixes
in the projects of their construction industries. As a result, construction projects can be
executed at proper cost, along with lower amounts of CO2 emissions. Emphatically, if the
governments, manufacturers of construction materials, and scholars play their roles, as
mentioned in this research, at a fast pace they can overcome inflation and its consequence
on their construction sectors, economies, and environments.

5. Limitations and Upcoming Research Directions

As all the researchers, the author of the present paper faced some challenges, adding
limitations to his work.
(1) First, CAPMAS [29] does not have reliable data concerning the consumed quantities
of ordinary Portland cement, sand, and gravel for being multiplied by their rates of
CO2 emissions to determine their inflation–CO2 emissions relationships. As a result,
the study was able to specify the inflation–CO2 emissions nexus with respect to steel
reinforcement only. Despite the impact of this challenge, the realized investigation
led to correct the implications of Musarat et al. [23] that overcoming inflation can
reduce building material prices; nevertheless, it increases CO2 emissions. However,
this paper advises the analysts in their future works to exert more efforts to examine
the uninvestigated correlations in order to grasp the whole picture of the inflation–RC
material CO2 emissions nexus.
(2) Second, the findings of this paper have been explored from data related to a devel-
oping country, i.e., Egypt. Hence, the presented outputs are limited to developing
economies which have the same economic characteristics as Egypt in terms of causing
the decreasing or increasing behavior and intensity of inflation and material prices
over time.
(3) Third, it was difficult to compare the outputs of this research with those of prior
studies concerning the inflation–material prices relationship. The reasons are that
while the findings of most of the previous works (e.g., [21]) are based on imprecise
methodologies, other results (e.g., [3]) are associated with different economic and
political conditions from Egypt’s circumstances.
(4) Finally, the comprehensive methodology of the present paper can be utilized in various
countries and applied on the materials relevant to other activities of the construction
industry, such as mechanical and architectural works. Such studies are priceless
to scrutinize the construction materials-specific differences in terms of their prices,
costs, and CO2 emissions owing to the influences of the inflation rate, whether in
similar or dissimilar contexts. Consequently, a better understanding can be realized to
overcome the economic and environmental implications of inflation on the sustainable
development of the construction sectors and their nations.

6. Conclusions
This study aims to verify the controversial conclusion of prior literature that overcom-
ing inflation reduces building material prices; however, it increases construction materials’
CO2 emissions. Moreover, it bridges the knowledge gaps of grasping the economic and en-
vironmental correlations and consequences of RC in accordance with the effects of inflation
and CO2 emissions, respectively. Based on reliable data from Egypt’s construction sector,
Spearman correlation test has been utilized to determine (1) the inflation–RC material
prices nexus, (2) the inflation–RC cost relationship, and (3) the inflation–RC material CO2
emissions correlation. The findings revealed that prices of all RC materials have direct
relationships with inflation. However, steel reinforcement prices are more affected by
inflation than those of other RC materials, including ordinary Portland cement, sand, and
gravel. Further, inflation has a direct correlation with RC cost. These correlations have been
more illustrated by calculating how 1% increase in inflation can affect each of which. It
has been summarized that increasing inflation by 1% leads to increase steel reinforcement
Sustainability 2023, 15, 7687 16 of 19

prices and RC cost by 1.568% and 1.548%, respectively. Similarly, 1% increase in inflation
causes increasing the CO2 emissions of steel reinforcement by 15.968%, indicating that
their nexus has a direct correlation, not an inverse relationship, as listed in the archival
works. These results have been also supported by significant discussions and implications
to show how the consequences of inflation on RC can be averted with a focus on the
economic sustainability of the construction sector. Likewise, the research illustrated how
CO2 emissions of RC can be reduced to maintain environmental sustainability.

Funding: This research received no external funding.

Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: All referenced data exists within the paper.
Conflicts of Interest: The author declares no conflict of interest.

Appendix A

Table A1. Inflation and building material prices related literature.

Study Study Scope Investigated Materials Analyzing Tools

• Assessing the impact of the inflation rate Cement, steel reinforcement, coarse • Pearson correlation test.
on building material prices. aggregate, fine aggregate, sandcrete • Regression analysis.
[14]
• Developing models to predict the future blocks, long-span aluminum roofing
prices of materials owing to inflation. sheets, and paints.
• Studying the implications of the Not mentioned. • Regression analysis.
macroeconomic indicators of the inflation
[15] rate, foreign exchange rate, and interest
rate on the prices of some
construction materials.
• Estimating the fluctuations in Cement, steel reinforcement, wire mesh, • Regression analysis.
construction material prices with respect gravel, granite, sand, laterite, blocks,
[16] to the implications of the macroeconomic hardwood, and paints.
indicators of the monetary policy rate
and inflation rate.
• Investigating the relationship between Cement, sand, aggregate, sandcrete • Regression analysis.
the macroeconomic variables of the blocks, steel reinforcement, asbestos,
[17] inflation rate, foreign exchange rate, and roofing sheets, nails, timber, ceiling
interest rate and prices of some selected board, electrical cables, paints, sanitary
construction materials. fitting, flooring tiles, sliding windows,
and glass.
• Examining the influence of the Cement. • Regression analysis.
macroeconomic indicators of the inflation
[18]
rate, monetary policy rate, and foreign
exchange rate on the price of cement.
• Proposing a model to predict the future Cement. • Regression analysis.
price of cement based on the
[19] macroeconomic indicators of the inflation
rate, population growth rate, and gross
domestic product.
Sustainability 2023, 15, 7687 17 of 19

Table A1. Cont.

Study Study Scope Investigated Materials Analyzing Tools

• Exploring the relationship between the
[20] inflation rate and building
material prices.
• Scrutinizing the behavior of construction
material prices considering the impact
of inflation.
[3] • Evaluating the inflation–material
prices nexus.
• Analyzing the correlation between
[22]
building material prices and inflation.
• Studying how inflation can affect prices
and CO2 emissions of
construction materials.
[23]
• Determining the potential
macroeconomic indicators that have
[21]
critical impacts on varying building
material prices.
Steel reinforcement, cement, sand, • Pearson correlation test.
bricks, and aggregate. • Regression analysis.
Cement; aggregate; sand; steel • Percentage of deviation.
reinforcement; ready mix concrete; • Spearman correlation test.
bricks; roofing; walls and floor tiles;
ceiling board; plumping; sanitary
fitting; paints; steel and metal sections;
plywood; timber; glass;
and ironmongery.
Cement, steel, crushed aggregate, sand, • Percentage of deviation.
and bricks. • Spearman correlation test.
Sand; cement; steel reinforcement; • Percentage of deviation.
bricks; aggregate; roofing; ceiling board; • Spearman correlation test.
walls and floor tiles; ironmongery;
plumping; timber; sanitary fitting;
ready concrete mix; paints; plywood;
glass; and steel and metal sections.
Cement and steel. • Pearson correlation test.
• Spearman correlation test.
• Regression analysis.

References
1. Musarat, M.A.; Alaloul, W.S.; Liew, M.S. Impact of inflation rate on construction projects budget: A review. Ain Shams Eng. J.
2021, 12, 407–414. [CrossRef]
2. Firouzi, A.; Yang, W.; Li, C.Q. Prediction of total cost of construction project with dependent cost items. J. Constr. Eng. Manag.
2016, 142, 04016072. [CrossRef]
3. Musarat, M.A.; Alaloul, W.S.; Liew, M.S.; Maqsoom, A.; Qureshi, A.H. Investigating the impact of inflation on building materials
prices in construction industry. J. Build. Eng. 2020, 32, 101485. [CrossRef]
4. Shiha, A.; Dorra, E.M.; Nassar, K. Neural networks model for prediction of construction material prices in Egypt using macroeco-
nomic indicators. J. Constr. Eng. Manag. 2020, 146, 04020010. [CrossRef]
5. Kar, S.; Jha, K.N. Assessing criticality of construction materials for prioritizing their procurement using ANP-TOPSIS. Int. J.
Constr. Manag. 2022, 22, 1852–1862. [CrossRef]
6. Marzouk, M.; Amin, A. Predicting construction materials prices using fuzzy logic and neural networks. J. Constr. Eng. Manag.
2013, 139, 1190–1198. [CrossRef]
7. El-Kholy, A.M. Predicting cost overrun in construction projects. Int. J. Constr. Eng. Manag. 2015, 4, 95–105.
8. Balali, A.; Moehler, R.C.; Valipour, A. Ranking cost overrun factors in the mega hospital construction projects using Delphi-
SWARA method: An Iranian case study. Int. J. Constr. Manag. 2022, 22, 2577–2585. [CrossRef]
9. Chukwudi, U.; Chigozie, G.; Chukwujekwu, A.; Hadiza, A. The correlation between foreign exchange rates and prices of building
materials in Nigeria, 2011–2017. Int. J. Bus. Manag. 2017, 5, 94–100.
10. Abdulhaqq, M.O.; Abdulsamad, M.A. Correlation between petroleum pump price volatility and selected building materials
prices of construction projects in Nigeria, 2011–2020. Int. J. Bus. Manag. 2021, 9, 42–51. [CrossRef]
11. Faghih, S.A.M.; Kashani, H. Forecasting construction material prices using vector error correction model. J. Constr. Eng. Manag.
2018, 144, 04018075. [CrossRef]
12. Mir, M.; Kabir, H.D.; Nasirzadeh, F.; Khosravi, A. Neural network-based interval forecasting of construction material prices. J.
Build. Eng. 2021, 39, 102288. [CrossRef]
13. Oladipo, F.O.; Oni, O.J. Review of selected macroeconomic factors impacting building material prices in developing countries–A
case of Nigeria. Ethiop. J. Environment. Stud. Manag. 2012, 5, 131–137. [CrossRef]
14. Oghenekevwe, O.; Olusola, O.; Chukwudi, U.S. An assessment of the impact of inflation on construction material prices in
Nigeria. PM World J. 2014, III, 1–22.
15. Adegbembo, T.F.; Adeniyi, O. Evaluating the Effect of Macroeconomic Indicators on Building Materials Prices. In Proceedings of
the Nigerian Institute of Quantity Surveyors: 2nd Research Conference–ReCon2, Abuja, Nigeria, 1–3 September 2015.
16. Kalu, J.U.; Gyang, Z.Z.; Aliagha, G.U.; Alias, B.; Joachim, O.I. Monetary policy and its price stabilization effects on the prices of
building materials. Mediterran. J. Soc. Sci. 2015, 6, 171–177. [CrossRef]
Sustainability 2023, 15, 7687 18 of 19

17. Oladipo; Olukayode, F. An assessment of the relationship between macro-economic indicators and prices of building materials in
Nigerian construction industry. Int. J. Sci. Bas. Appl. Res. 2015, 24, 112–123.
18. Bediako, M.; Amankwah, E.O.; Abodor, C.D. The impact of macroeconomic indicators of cement prices in Ghana. J. Sci. Res. Rep.
2016, 9, 1–6. [CrossRef]
19. Oba, K.M. A multiple linear regression model to predict the price of cement in Nigeria. Int. J. Econo. Manag. Eng. 2019, 13,
1482–1487.
20. Mohamed, E.B.; Mahmoud, S.Y. An assessment of the impact of inflation on the prices of selected construction materials in Sudan.
Int. J. Multidiscipli. Res. Publica. 2020, 2, 41–44.
21. Dilip, D.K.; Jesna, N.M. Macroeconomic indicators as potential predictors of construction material prices. Sustainabil. Agr. Food
Environment. Res. 2022, 10, 1–9.
22. Musarat, M.A.; Alaloul, W.S.; Qureshi, A.H.; Altaf, M. Inflation Rate and Construction Materials Prices: Relationship Investigation.
In Proceedings of the International Conference on Decision Aid Sciences and Application, Sakheer, Bahrain, 8–9 November 2020.
23. Musarat, M.A.; Alaloul, W.S.; Liew, M.S.; Maqsoom, A.; Qureshi, A.H. The effect of inflation rate on CO2 emission: A framework
for Malaysian construction industry. Sustainability 2021, 13, 1562. [CrossRef]
24. Bassioni, H.A.; Elmasry, M.I.; Ragheb, A.M.; Youssef, A.A. Time Series Analysis for the Prediction of RC Material Components
Prices in Egypt. In Proceedings of the 28th Annual ARCOM Conference; Association of Researchers in Construction Management,
Edinburg, UK, 3–5 September 2012.
25. Marey, H.; Kozma, G.; Szabó, G. Effects of using green concrete materials on the CO2 emissions of the residential building sector
in Egypt. Sustainability 2022, 14, 3592. [CrossRef]
26. CAPMAS (Central Agency for Public Mobilization and Statistics). Monthly Bulletin of Average Retail Prices of Major Important
Building Materials; Central Agency for Public Mobilization and Statistics: Cairo, Egypt, 2023.
27. Hassanein, A.A.; Khalil, B.N. Developing general indicator cost indices for the Egyptian construction industry. J. Finan. Manag.
Prop. Constr. 2006, 11, 181–194. [CrossRef]
28. CAPMAS (Central Agency for Public Mobilization and Statistics). Urban’s Annual Inflation Rate of the Republic. 2023. Available
online: https://www.capmas.gov.eg/Pages/IndicatorsPage.aspx?ind_id=2517 (accessed on 3 February 2023).
29. CAPMAS (Central Agency for Public Mobilization and Statistics). Annual Bulletin of Construction & Building Statistics for Private
Sector Companies; Central Agency for Public Mobilization and Statistics: Cairo, Egypt, 2023.
30. Enterprise. Just How Bad is Construction Material Pollution in Egypt? Enterprise Ventures LLC: Cairo, Egypt, 2021.
31. Alaloul, W.S.; Musarat, M.A.; Liew, M.S.; Qureshi, A.H.; Maqsoom, A. Investigating the impact of inflation on labour wages in
construction industry of Malaysia. Ain Shams Eng. J. 2021, 12, 1575–1582. [CrossRef]
32. Musarat, M.A.; Alaloul, W.S.; Liew, M.S. Inflation rate and labours’ wages in construction projects: Economic relation investigation.
Eng. Constr. Archit. Manag. 2022, 29, 2461–2494. [CrossRef]
33. Xiao, C.; Ye, J.; Esteves, R.M.; Rong, C. Using Spearman’s correlation coefficients for exploratory data analysis on big dataset.
Concurr. Computat. Pract. Exper. 2016, 28, 3866–3878. [CrossRef]
34. El-Dash, K.; Abdel Monem, M. Potential Risks in Civil Infrastructure Projects in Egypt. In Proceedings of the VIII International
Congress on Project Engineering-III IPMA-ICEC International Expert Seminar, Bilbao, Spain, 6–8 October 2004.
35. Cheung, E.; Chan, A.; Kajewski, S. Factors contributing to successful public private partnership projects: Comparing Hong Kong
with Australia and the United Kingdom. J Facili. Manag. 2012, 10, 45–58. [CrossRef]
36. Tiong, R. CSFs in competitive tendering and negotitaion model for BOT projects. J. Constr. Eng. Maanag. 1996, 122, 205–211.
[CrossRef]
37. Zhang, X. Concessionaire selection: Methods and criteria. J. Constr. Eng. Maanag. 2004, 130, 235–244. [CrossRef]
38. IEA (Industrial Energy Accelerator). Case study: Al Ezz Dekheila Steel company: Implementation of Energy Management System
(EnMS) to Decrease Energy Consumption. 2023. Available online: https://www.industrialenergyaccelerator.org/egypt/case-
study-al-ezz-dekheila-steel-company/ (accessed on 3 March 2023).
39. Hamza, A.S. Assessment of Carbon Dioxide Emission and Its Impact on High-Rise Mixed-Use Buildings in Egypt. Master’s
Thesis, American University in Cairo, Cairo, Egypt, 2021.
40. Colangelo, F.; Petrillo, A.; Farina, I. Comparative environmental evaluation of recycled aggregates from construction and
demolition wastes in Italy. SCi. Tot. Environ. 2021, 798, 149250. [CrossRef]
41. Petrillo, A.; Colangelo, F.; Farina, I.; Travaglioni, M.; Salzano, C.; Cioffi, R. Multi-criteria analysis for Life Cycle Assessment and
Life Cycle Costing of lightweight artificial aggregates from industrial waste by double-step cold bonding palletization. J. Clean.
Product. 2022, 351, 131395. [CrossRef]
42. Tang, Y.; Lee, Y.; Amran, M.; Fediuk, R.; Vatin, N.; Kueh, A.; Lee, Y. Artificial neural network-forecasted compression strength of
alkaline-activated alag concretes. Sustainability 2022, 14, 5214. [CrossRef]
43. Demissew, A.; Fufa, F.; Assefa, S. Partial replecemnt of cement by coffee husk ash for C-25 concrete production. J. Civ. Eng. Sci.
Tech. 2019, 10, 12–21. [CrossRef]
Sustainability 2023, 15, 7687 19 of 19

44. Hafez, H.; Kurda, R.; Al-Ayish, N.; Garcia-Segura, T.; Cheung, W.; Nagaratnam, B. A whole life cycle performance-based
ECOnomic and ECOlogical assessment framework (ECO2 ) for concrete sustainability. J. Clean. Product. 2021, 292, 126060.
[CrossRef]
45. Akbarnezhad, A.; Ong, K.; Chandra, L. Economic and environmental assessment of deconstruction strategies using building
information modeling. Automat. Constr. 2014, 37, 131–144. [CrossRef]

Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual
author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to
people or property resulting from any ideas, methods, instructions or products referred to in the content.