Exploratory Factor Analysis of Construction Industry Problems in a Developing Country

Abstract

Various problems faced by the construction sector have hampered the performance and growth of the construction industry in many countries, including Indonesia. This research aims to quantitatively investigate the factors that hinder the performance of the construction industry in Indonesia. Through a literature review approach, 54 inhibiting factors were identified. Next, a questionnaire was conducted to measure the perceptions of Indonesian construction practitioners. The data obtained was analyzed through exploratory factor analysis. This research found seven underlying factors inhibiting the performance of the Indonesian construction industry, namely (1) poor system and practice, (2) incompetency of stakeholders, (3) global challenges, (4) poor site management, (5) poor resource management, (6) slow technology adoption, and (7) lack of detailed planning and decision-making. In addition, these findings are compared with results from similar research that has been conducted in other 14 countries so that it can provide a more comprehensive understanding regarding the criticality of construction industry problems globally. This research contributes by providing a current insight of construction industry problems in developing countries. The results can be used by the government and construction organizations in mapping underlying problems in the construction industry and determining appropriate strategic steps to overcome these problems. This study extends previous research on the criticality of construction industry problems as has been carried out in various countries. It is a context-based study with Indonesia as the case study. This research provides a more comprehensive understanding because it covers 54 potential problems that hinder the performance of the construction industry. The interesting findings from this research is that there are several problems that are unique inhibiting factors that have never been discussed in other similar research, such as land mafia practice and low profitability. Exploratory factor analysis succeeded in identifying seven latent factors with “poor systems and practices” as the most critical factor that hampers the performance of the construction industry in Indonesia. This research adds to the knowledge by conducting a comparative analysis of various similar studies in various countries around the world. The results can be used as comparison material for construction organizations which adds insight in overcoming construction industry problems which may be relevant to other countries. Identification of these inhibiting factors can also be used to prevent potential conflicts that occur in the implementation of construction projects.