A financial planning model based on risks for contracting firms operating in inflationary environments

The construction industry has several has several characteristics that sharply distinguish it from other sector of economy. This characteristic is compounded by the high level of risk and uncertainty in the industry. Construction jobs extend over long periods, prices change, labour difficulties arise and the probability offacing adverse weather conditions is high. The impact of these factors on costs and competition time is difficult. When compared with other industries, the construction industry is not capital intensive, being able to support a relatively high turnover in relation to capital employed. EspeCially in inflationary environments, its financial resources become stretched and any unexpected fluctuations in working capital requirements may cause serious problems. This paper will outline sectoral risks and uncertainties faced by the contracting firms in long term. For this the most important risks will obtain for contracting firms operating in inflationary environment.