Efforts to improve lagging construction productivity have largely failed, notably in the U.S., but skills shortages and increasing constraints on migration likely will inflate pay and force productivity improvements across the globe, according to a recent construction-industry survey and forecast by the McKinsey Global Institute. The proliferation of megacontractors, including many from China, also will induce contractors to raise their production rates, says the report.
Although productivity in overall global manufacturing has risen 3.6% a year over the past two decades, it has increased by just 1% in construction on average, says the report. U.S. construction productivity has declined since the 1960s and now languishes at pre-World War II levels, the report adds. Meanwhile, productivity in Brazil and Saudi Arabia is falling, Europe’s production rates are mostly “treading water,” and China’s and Africa’s rates are increasing rapidly from a low base level. Some countries with small populations, such as Australia, Belgium and Israel, are seeing high productivity and fast growth.
In responding to the institute’s findings, contractor and supplier chief executives blamed inappropriate contracts as the main cause of low performance. Construction owners mostly blamed inefficient onsite execution. For trade contractors, the small scale of operations and far-flung jobsites were cited as bars to improved production rates. Specialty contractors dragged down the entire project team’s productivity of the big building, civil and industrial players, which all scored far lower than other firms, the report notes. Contractors will embrace productivity-based competition and invest in technology skills only if the economies of scale counter lower prices, said the report.
What will the future bring? Another new report, released by the World Economic Forum, states that tools such as building information modeling and 3D printing have begun to transform the way infrastructure and other assets are built and designed. But, the report states, new digital technologies are still little used.