Exploring the Symbiotic Relationship Between Inflationary Trends and Economic Advancement in Uganda

¹Nnadi Ezekiel, ¹Kamalha Masereka, ¹Rwishaija Clesensio, ¹Nancy Boniface and ¹Okello Geoffrey

¹Civil Engineering Department, Kampala International University, Uganda.

Corresponding author: nnadiezekiel@kiu.ac.ug

ABSTRACT

The study explores the impact of inflation on project disputes and construction material prices in Uganda from 2018-2022. It reveals unstable inflation rates, non-uniform material prices, and factors like importation, interest rates, GDP, and government policies. Despite inflation spikes, Uganda’s construction industry continues to grow. The composite price index was used to measure average price changes and the construction material inflation rate was derived. The findings offer valuable insights into inflationary forces and material prices. The study highlights the need for effective strategies to manage inflation and improve the construction industry in Uganda, highlighting financial risks. The unstable inflation from 2017 to 2022 caused irregular price movements in construction materials, with 71% of price changes attributed to inflation, indicating a positive relationship between inflation and construction prices.. This instability, indicating economic volatility and uncertainty, led to project disputes. Finding discovered a decline in currency value, reducing purchasing power for goods and services, affecting the construction industry. The study suggests that other macro-economic factors, such as importation, interest rate, and GDP, may also contribute to the general increase in construction material prices. The study recommends reducing imports of construction materials, involving construction professionals in government policy, using locally made materials, and developing a construction database.

Keywords: Construction industry, Economy, Financial risks, Inflation trend and interest rate

CITE AS: Nnadi Ezekiel, Kamalha Masereka, Rwishaija Clesensio, Nancy Boniface and Okello Geoffrey (2024). Exploring the Symbiotic Relationship Between Inflationary Trends and Economic Advancement in Uganda. RESEARCH INVENTION JOURNAL OF ENGINEERING AND PHYSICAL SCIENCES 3(2):1-8.