Increasing productivity in the construction sector

Productivity has been a thorn in the side of construction for decades - it has been a major topic in numerous reports for at least 50 years, lagging behind every other sector within the UK.

Productivity not only is a crucial part of the successful, efficient and profitable operations of a single organisation, but it’s also seen as the root to increasing living standards within a country.

In this blog, we provide an overview of how the government’s priorities and those of the industry itself compare, as well as how to increase productivity with the specific government backing currently available to organisations.

Industry reports found that the construction productivity is growing at just 1% compared with 2.8% for the total world economy and 3.6% for manufacturing.

This gap in productivity growth means that each hour worked is producing somewhere above 15% less than might have been expected. So what is holding back productivity?

Inefficiencies in processes, unplanned costs and an unproductive workforce can amount to up to 25% of the overall cost on a project, which could have a negative impact on your business and its profitability. How?

Do your staff waste time looking for tools and equipment on your construction site?

Are you guilty of purchasing last-minute tools or assets to replace ones that are lost or missing?

For every tool and asset that isn’t where it’s supposed to be, you’re losing time and money on your job sites, which undoubtedly affects your businesses’ overall productivity. In fact, our research found that on average, six assets are lost every month, potentially adding up to £7,000 a year!

Some of the factors that overlap in all reports investigating the causes of decreased productivity in the construction sector include:

• Procurement
• Prefabrication and standardisation
• Communication
• Fragmentation between and within the design and build processes
• Safety
• Casual labour
• Site management

If any of these issues sound familiar to you, keep on reading. 

The Government has recognised the sluggish levels of productivity growth in the UK, which is why it’s placing productivity at the heart of its political agenda. However the government and the construction industry seem to have different perspectives on the levels of productivity and priorities for improvement.

The biggest difference between attitudes is related to investment, which has significantly more support from MPs than the construction industry itself.

The economic indicators point to a challenging 2018 for Britain in the lead up to Brexit in 2019. The Organisation for Economic Co-operation and Development (OECD) forecasts the UK’s GDP will grow by only 1% (ideal growth rate being 2-3%) in 2018. Construction, which accounts for around 6.7% of the UK economy and employs approximately 2.9 million (10%) people, therefore, has never been more critical to UK plc’s fortunes.

While the industry sector doesn’t see investment as one of the most important factors to improve its productivity levels, research shows different results, revealing that the major challenges within the sector actually come out of its traditional business models that have changed very little over the years, as well as lack of investment in skills, technology, systems and processes.

The government is recognising those with ambitious plans for the future, backed by the fact that by simply boosting construction productivity could deliver £15 billion savings every year. Some example initiatives construction business can take advantage of include:

• New £600 billion infrastructure investment pipeline (backed by both government and private investors) and plans to boost construction productivity were published in December 2017
• The Government has pledged £170 million investment in the ‘Transforming Construction’ programme with industry match-funding through £250 million investment
• Innovative UK and the UK Government Department of Business, Energy and Industrial Strategy have formed a partnership to deliver the next phase of digitalisation in the construction sector

The support offered through these government initiatives is, and will continue to be, a major catalyst for further uptake of mobile digital solutions, with data analytics capability, in the UK and to raise productivity there.

Measuring productivity growth in construction is especially difficult due to the nature of production in the industry and the limitations of available data. However, with the aid of BIM and the introduction of new technology, such as asset tracking and management software, which enable the close supervision, monitoring and control of the entire operational and compliance life cycle of an asset, measuring and improving productivity is made easier than ever before.

In seeking to increase productivity overall, it is important to look at the whole as well as the parts of a system and to understand how each part interacts with the others. In construction this is imperative.