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.