CEG Industry Blog

Construction Productivity Still Slumping—Can it be Reversed?

The construction industry must become more proficient in its use of labor because, as everyone knows, labor is at a premium.

📅   Mon April 13, 2015 - Edition
Giles Lambertson



The construction industry must become more proficient in its use of labor because, as everyone knows, labor is at a premium. How bad is it? Consider the following passage from an industry publication:

“Talk to almost any contractor in virtually any part of the country these days, and chances are that the biggest problem he is facing is a lack of labor. Too often, the projects are there; the people to do them are not. The labor crunch has reached such critical proportions that now is the time for fresh approaches.”

The kicker is that the quote is from 1999. Here we are 16 years later and the situation is unchanged. Consider a quote from a National Society of Engineers publication just a few months ago: “If you look at the growth data for the whole [construction] industry, if anything, labor productivity is getting worse.” The industry is wasting labor.

Productivity is all about numbers-crunching. Even allowing for the duplicity of data (as expressed in the old line about lies, damn lies, and statistics), the numbers do not add up for the construction industry. Researchers measure construction work in the same way they do other nonfarm industries and the results are unflattering. Example: The value added per manufacturing employee climbed rather dramatically from 1998-2011; for construction employees, it fell.

Yes, some capital intensive construction (such as highway work) can be unfairly compared to labor intensive building (home or office construction). On the other hand, offsite, modular construction solutions are more applicable to building construction than to civil projects. At some point, the differences are irrelevant. Construction productivity is going down.

Project owners and managers should worry less these days about immigrant labor solutions and federal highway bill largesse. They will do better to concentrate on their labor productivity via telematics, retention of skilled employees, efficient utilization of equipment, adept bidding, and collaborative contracts. Otherwise, in 2030 the chronic productivity lament will still be making headlines.