Evaluating the Effectiveness of Target Costing for Managing Project Costs in Enugu State's Construction Sector

The Nigerian construction industry, a vital contributor to the nation's economy, faces persistent cost management challenges. Projects are plagued by cost overruns, time delays, and poor quality, leading to waste of resources and financial losses by Cooper and Slagmulder (2017). Issues are acute in urban centers like Enugu State where employment of Quantity Surveyors (QS) for their critical cost planning and management functions remains notably low in Nigeria, according to Omole (2000). As articulated by Ayodele (2002), effective target costing (TC) and construction management embody proactive cost management methodologies that are increasingly embraced in the global construction milieu; however, they remain under exploited in developing nations. The paper evaluates target costing's effectiveness for managing construction project costs in Enugu State. This study evaluated the effectiveness of Target Costing (TC) in managing project costs within Enugu State's construction sector, addressing critical gaps between theoretical models and practical implementation in a specific regional context. Adopting a quantitative approach and positivist philosophical paradigm, a descriptive survey research design was employed. A total enumeration of 105 construction professionals and main contractors was targeted, with 89 (84.8%) questionnaires returned. Data were analyzed using frequency, percentage, mean, and standard deviation, with a T-test at a 0.05 significance level to test the null hypothesis. Findings revealed that while key professional resources like Quantity Surveying and Architectural/Design Consultancies are highly available for TC implementation (100% and 95.5%, respectively), critical gaps exist, particularly concerning Private Clients/Developers (56.2% unavailable) and Project Managers (78.7% unavailable). The perceived benefits of TC, such as ensuring profitability (x̅= 3.89) and a market-driven approach (x̅= 3.83), were rated highly, suggesting strong theoretical recognition among practitioners. However, significant challenges hinder effective practice, including cost estimation and data reliability (x̅= 3.84), project management and collaboration issues x̅= 3.61), and an inadequate engagement of professional quantity surveyors (x̅= 3.57). Recommendations to enhance TC were highly accepted, with mandatory training (x̅= 3.83), fostering teamwork (x̅= 3.79), and improving data management and technology (x̅= 3.63) ranked highest. The T-test showed no statistically significant difference (p = 0.757) between construction professionals and main contractors regarding their perceptions of TC effectiveness, indicating a shared moderate-to-high level of perception. The study concludes that while the core principles and benefits of TC are recognized, its practical application is hampered by systemic challenges related to stakeholder availability, data reliability, and collaboration while the conceptual value of Target Costing is acknowledged, its effective implementation in Enugu State's construction sector is significantly hampered by systemic challenges related to stakeholder availability, data reliability, and collaboration. The recommended strategies focus on capacity building, improved teamwork, and technological adoption to overcome these barriers, ultimately advancing cost management practices and enhancing competitiveness in the local construction industry.