1.1 the construction experts agree on that it has



Problems such as cost
overrun, schedule delay, low quality, and stakeholders’ dissatisfaction are
commonly reported in construction projects in in Egypt and all other countries.
Early notice about these problems help solve the problem and minimize its
effect. Early notice results from good forecasting for the future. Forecasting
is an essential element of project management throughout the life cycle of a
project. The reliable forecasts are critical because even with a detailed plan,
there are inherent risk factors that may influence the actual performance of a
project. As a result, the project manager continually seeks leading indicators
for potential problems so that appropriate actions can be taken in a timely
manner to minimize the expected variances from planned performance. These
leading indicators are the part of the project forecasts.

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project performance
prediction models developed in this study would enable owners, consultants, and
contractors to predict how successful their projects.


Most of the
construction experts agree on that it has not been easy determining, predicting
or influencing project performance during the construction phase of the
project. All such work has certain limited accuracy. Although that, many
performance evaluation models have been developed along the previous 3 decades.
They are dealing with this problem at three different levels: 1- construction
industry; 2- company; and 3- project. Models at the construction industry levels
are used to measure the effect of economic, political, and social changes on
the performance of the construction industry as a whole. Kangari, 1988 relates
the changes in construction industry failure rate to some macrocosmic factors:
average prime interest rates, amount of construction activity, in?ation, and
new business entering the construction industry. Most performance evaluation
models for construction companies are based on their annual ?nancial statements
or reports. Different analytical techniques have been used to develop these

?nancial statement trend analysis;

?nancial statement structural
analysis; and

?nancial statement ratio analysis.

The most important variables that
could be used in ?nancial statement trend analysis to differentiate between
failed and non-failed companies are: accounts receivable, under-belling,
accounts payable, notes payable, total long-term debts, stock and retained
earnings, cost of sales, and gross pro?t.


The aim is to predict
the final performance at early stages in the project, for the reason that in
case of undesired performance, the project team should have the time and
resources to act proactively and take corrective action without causing
schedule delay or cost overrun. Another important aspect is that based on
applied corrective action, what change has occurred in performance should be
visible i.e. the prediction model should be a time-dependent dynamic model.