Modeling the trend of construction materials industry

Abstract

Construction materials has a key impact on the cost of construction. In construction industry it is important to foresee the trends of material prices to prevent, cost overruns during the construction stage and bankruptcy of the contractors. The material price trends have a time dependent nature, and time series analysis methods can be utilized to model and estimate them. This study focuses on modeling and forecasting the trends in material prices through Box-Jenkins methodology. In this context, an economic indicator named General Trend in Construction Materials Industry is modelled with an ARIMA (1,1,0) model. The forecasts done with the model indicate that the model can successfully predict the future values of the indicator.