Factors Affecting Cost Escalation in Construction Projects in Gaza Strip

Cost escalation is one of serious difficulties that facing the construction industry. The construction sector suffers from ever-increasing cost of raw materials, construction inputs and inflation in domestic and international markets. The aim of this paper is to identify factors affecting the cost escalation in construction projects in the Gaza Strip. This will help the contractors to create awareness so that timely remedial measures can be taken to mitigate the resulting problems. A total of 36 cost escalation factors related to project, supervisor, activity, owner, labour and equipment and materials were identified through extensive literature review which were supported by panel of experts and pilot study. A structured questionnaire was used to collect primary data. A total of 120 questionnaires were distributed randomly to owners, consultants and contractors working in the construction sector in the Gaza Strip to collect their views about the factors affecting cost escalation. The questionnaire was divided into two parts. The first part is general information and the second is factors affecting cost escalation. The results revealed that the cost of building materials, permits and approvals, the availability of an effective supervisory system, the improper cost estimate, the changes in project, the quality of work, the machinery and equipment required to carry out the tasks and activities required for the project completion are the most common factors leading to the cost escalation of construction projects in the Gaza Strip.