The Impact Of Uncertainty In Timber Prices Construction Essay

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Timber is one of the major and essential material of the construction industry in Malaysia. Timber products in construction such as timber formwork, door frame, roof trusses, wall studs, scaffolding board, staircase, fencing, and others, involve 30% of the materials use in a project. The price of timber increase has lead increase in overall project construction cost. The objective of this study is about the impact of uncertainty in timber prices to construction industry in Malaysia. It is used to identify the factors that influence timber price, impact of uncertainty timber price and suggest method to overcome the negative impact of uncertainty timber price to construction industry in Malaysia. In this proposal, questionnaires and interviews method will be used to identify the factors affect the timber price and the impact of uncertainty in timber price. All data collected will be analyzed using Statistic Package for Social Science (SPSS) Version 17.0 to get the frequency and the average index from the data. The possible outcomes from this study is the solving methods to the negative impact of uncertainty timber price to construction industry in Malaysia.

1.0 Introduction

Timbers are natural resources from trees and it has been used throughout the history. From the earliest first housing, bridges and tools, timber has give humans with a board range of building product and materials for construction. As we know, timber is the important construction material and needed in most of construction work. Timber has been wide variety of uses in construction work such as use for frame work, decoration, outdoor features and others. Timber is a versatile material which is flexible, sustainable and more environmental friendly material which is recyclable compare with others. Timber is widely used in construction because it is corrosion proof, durable, fire retardant, low thermal conductivity and expansion, appearance and inexpensive.

Malaysia is one of the timber exporter country to foreign country and has become second largest foreign exchange earner, with petroleum being the first. The major importer of timber were Taiwan, Japan, Republic of Korea and Singapore. Timber price are increase in local demand due to the exported timber to overseas to take advantage of higher market price. In Malaysia economic growth, timber price is not a controlled material by the government thus the price is uncertain all the time. The same thing happened to all construction materials such cement, steel, brick, aggregate, sand, mild steel and others. There are many causes of the material price increase in the construction industry. Beside, price of petrol and diesel increase has affect the timber price due to transportation. This uncertainty of timber prices has bring negative impact to our construction industry such as slowdown construction activities, less timber used in construction and others. Our local contractor have difficulties to completed government projects in Ninth Malaysia Plan (PMK-9) due to increase in materials price. The timber prices is expected to still increases in year 2011 due to high demand and world global construction industry developed.

2.0 Problem Statement

Timber prices increased from recent year and it is expected to still increases in year 2012 due to high demand of construction project developed. High demand of construction work mean increase in demand used of timber, has also increase the timber price. This unprecedented increase of construction material prices in current construction industry has caused financial problem for unprepared suppliers, subcontractors, contractors and owners. There are many causes of the material price increase in construction industry. This material price escalation issues are normal appearance for all economy sector. The effective project management using alternative construction material to minimize the effect of material price increase. Therefore, this study is significant to identify the factors that affect the timber price, the impact of increase and decrease in timber price and to suggest method to overcome the negative impact of the uncertainty timber price to construction industry in Malaysia.

3.0 Aims and Objectives

The aim of this study is to identify the impact of raise and decent of timber price to construction industry in Malaysia. The objective of this study is :

To identify the factors that affect timber prices.

To identify the impacts of uncertainty in timber prices to construction industry in Malaysia.

To suggest method to overcome the negative impacts of uncertainty in timber prices to construction industry in Malaysia.

4.0 Significance of Study

The important of this study is understanding the factors and impacts of uncertainty in timber prices to construction industry in Malaysia and recommend method to overcome the negative impact. In addition, this study can as a reference study to plan strategy so as to control the negative impacts uncertainty of timber price to construction industry. From the impacts of uncertainty timber prices results, the contractors can well prepared for any increase in future timber price since the hikes in timber price affect the most medium and small sized contractors. Thus they may able to avoid any cost burden by the uncertain timber price.

5.0 Literature Review

5.1 Building Material

Any materials that used for construction purpose is known as building material. Many materials occur naturally such as timber, clay, sand, rocks have been use in construction. Other than those naturally occurring material, many man-made products such as cement, foam, concrete and others are used in construction. Building material used in construction industry purposely to create building and structure. Timber is one of the building materials that commonly used in construction because of the available resources is high in anywhere and low cost compare to other materials.

5.2 Types of Timber

Timber also known as wood and commonly referred to as lumber. There have many types of wood. Some types of wood are very hard and durable and some are flexible enough to be bent. There are hardwoods and softwoods. The term hardwood and softwood is refer to the botanical origins of woods but not refer to their density or physical hardness. Hardwoods come from broad leave trees, either evergreen or deciduous, belonging to angiosperm group. Hardwood trees such as Ash, Blackwood, Oak, Poplar and others. Softwoods come from cone bearing trees, often evergreen needle like leaves, it belonging to the botanical group gymnosperm. Softwood trees usually harden than hardwood trees. Example of softwood trees are Douglas fir, Redwood, Pine, Yew trees and others.

5.3 Timber Properties

Durability [BARRIR]

Durability is one of the important performance factor used to assess the sustainability of a timber. The durability rating of a timber is based on the natural species and the durability may increase by preservative treatment. Durability of timber is commonly longer than other materials. It can last for very long period where there is no contact with fungi, decay or insects.

Fire resistance

Timber is a combustible material that easily burned. The relatively good structural of timber in fire is due to the fact that has a uniform strength through the mass. Therefore the load bearing capacity reduced in proportion to the loss of cross-section[BARRIE]. The different size of timber affect the burning rate because of the cross-section area of timber. The larger size of timber lead difficult to burn because the large cross-section decompose relatively slowly due to low thermal conductivity. To make timber more fire resistance, the surface of timber can coat with chemicals such as ammonium phosphate and soleplate to become more resistance to heat.

Thermal conductivity and expansion

Dry timber is a poor conductor of heat and therefore suitable use for internal wall panelling, framing and cladding. The thermal conductivity of timber is very low compare with steel and copper. Most material expand on heating but the behaviour of timber is dependent on the moisture content. Dry timber expands on heating and contracts on cooling.

5.4 Uses of Timber in Construction Industry

There are many usage of timber in construction industry. Structural timber commonly use for structure work such as columns, floor systems, roof trusses, frames and beams. Non-structural used for wall studs, windows and doors frame, board sheathings, formwork, panelling, wall sidings, staircase and ceiling. In addition, timber also use as decoration and appearance purposed in indoor and outdoor of the building.

5.5 Preservative of Timber

Timber preservation is needed to protect the wood products or timbers from deterioration, decomposition or damage due to pest attacks through application of chemical substance. The purpose of preservation of timber is to modify the wood structure and render it resistant to insect and fungi attack. Other than that, preservative of timber is used to fire resistance, make timber become more durable, improve its performance properties, water repellent to envelop treat timber. Common preservative treatment such as Boron salts, Alkaline Copper Quat (ACQ), Heat Treatment, Linseed oil and Chromated Copper Arsenate (CCA).

5.6 Growth of construction material price escalation in Malaysia

Timber is not a controlled item by the government, the price of timber has seen an increase of more than 20% since the year start of 2006. The same thing of price increase happened by all construction materials such as steel, sand, mild steel, cement, brick, ready mix concrete and others. The increase in other materials price has lead the timber price increase[rising].

Beside, price of lumber have not increase gradually with increased the demand and constrained supply. Instead they have followed an erratic pattern of booms and busts that are largely attributable to exchange in expectation about future supply[drive].

6.0 Research Design

In order to carry out my study, several methods of data collection are used to get the required information about the impact of uncertainty in timber prices to construction industry in Malaysia. Two method of data collection will be used which are primary data collection and secondary data collection. All primary data will collect from textbooks and journals. For the secondary data will collect from questionnaires survey and interview method. By using the primary data that obtained helps to design and generate the questionnaires survey forms for secondary data collection.

6.1 Questionnaires

The questionnaire survey forms will distribute to various professional involved in construction industries, there are contractor, supplier and consultant. Three different types of survey forms will be set as below:

Form 1: Factor that affect the timber prices.

Form 2: Impact of uncertainty in timber prices to construction industry.

Form 3: Method to overcome negative impact of uncertainty in timber prices.

6.2 Interviews

This interviews method is conduct to find out the selected samples (interviewer) about their view, opinion and suggestion on the impact of uncertainty in timber prices to construction industry in Malaysia.

6.3 Work organization

 

2011

2012

 

Y3S1

Y3S2

Y3S3

Activities

JUN

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

APR

Literature Review

 

 

 

 

 

 

 

 

 

 

 

Prepare questionnaire

 

 

 

 

 

 

 

 

 

 

 

Conduct survey

 

 

 

 

 

 

 

 

 

 

 

Data collection /analysis

 

 

 

 

 

 

 

 

 

 

 

Reporting

 

 

 

 

 

 

 

 

 

 

 

Completion of project

 

 

 

 

 

 

 

 

 

 

 

Milestones

 

2011

2012

 

Y3S1

Y3S2

Y3S3

Activities

JUN

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

APR

A review manuscript

 

 

 

 

 

 

 

 

 

 

 

Hypothesis 1 tested

 

 

 

 

 

 

 

 

 

 

 

Hypothesis 2 tested

 

 

 

 

 

 

 

 

 

 

 

Research Findings manuscript

 

 

 

 

 

 

 

 

 

 

 

Honours thesis submitted

 

 

 

 

 

 

 

 

 

 

 

7.0 Expected Outcomes

The expected outcome from this study show that the timber price will still increase in 2012. This is due to the factor increase in petrol and diesel prices will cause the timber transportation costs increase. In addition, the fluctuation of other materials price effect the timber price.

On the other hand, under the impact of uncertainty in timber price to construction industry, the uncertainty of price cause increase cost burden for contractors. Therefore, it will reduce the profit earn by contractor from the project.

The way to reduce the negative impact of uncertainty in timber price to construction industry, the suggestion is to increase the export duty of timber and reduce the price of timber in Malaysia. This is because Malaysia is timber resources country and should give beneficial to local construction and export to overseas for better selling prices.

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