Risk factors influencing informal contractors’ operations in the construction industry in selected local municipalities of the Free State Province, South Africa

Abstract

Operations by informal contractors in the construction industry plays an indispensable role in informal economy of South Africa. However, several risk factors have continued to influence the successful operations of informal contractor in the construction industry of South Africa. This study therefore assesses the risk factors that influence informal contractors’ operations in the construction industry. A comprehensive literature backed by different but related theories such asthe dualists, the structuralists, and the voluntariststheories were sought to ascertain the risk factors that impede industry’s operations throughout the project life cycle. A convergence of mixed methods approach was employed to gather concurrent data through several multiple sources. A 5 Likert-scale questionnaire and interview schedule were distributed to 304 informal contractors to gather primary data. To ensure enough triangulation data process, 18 informal contractors divided into 3 groups of 6 participants per group participated in focus group discussions (FGDs) from 8 local municipalities (LMs). Qualitative and quantitative data were analysed through SPSS statistical software aided by descriptive and inferential tools supported by ANOVA to test formulated hypotheses. Qualitative data on the other hand, was analysed using the thematic approach. Themes and sub-themes were derived from the participants’ responses for meaningful inferences. The study revealed several risk factors such as project design, financial, material, decision making, physical and environmental risks among others that influence informal contractors’ operations in the construction industry. It was established that though majority of informal contractors attained minimum educational qualifications, yet they lack the requisite risk management knowledge within the construction industry. Risk factors such as project design, financial, materials and decision-making processes within the construction industry. Based on the study outcomes, it was concluded that informal contractors should reduce the impact of all forms of risk factors within the construction industry. To ensure maximum reduction of risk factors in the industry, this study suggests an integrated risk factor identification framework (IRFIF) to be applied by informal contractors during project operations. In general, the use of the IRFIF framework provides beneficial for informal contractors across the informal economy. The IRFIF serves as a strategic tool that is suggested to assist informal contractors to conduct an early identification of the risk factors during operations to mitigate the occurrence of possible risk factors in the industry.