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Abstract:
This paper investigates the nature of relationship between safety costs and the profitability of construction companies in Nigeria. It specifically looked at the effects of costs of providing Personal Protective Equipment(PPE) and costs incurred in providing staff safety trainings on the Gross profit margin and Return on total assets respectively; of construction firms. Data were obtained by means of well-structured and validated questionnaire and distributed to 250 respondents, comprising staff of 10 construction companies operating in the Niger Delta region; out of which 243 were received and used for the study. Analyses were performed using Simple Regression and Pearson's product moment coefficient of correlation in SPSS. The study revealed that there was a statistically significant but negative correlation between safety costs incurred by construction companies and their profitability. Further, safety costs negatively influenced the Gross Profit Margin (GPFM) and Return on Total Assets (ROTA) of the companies used for the study. The study recommends continuous monitoring/control of safety costs by all construction firms to avoid eating deep into their profitability.
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