Productivity is an ongoing concern for the construction sector. The product, process and people conundrum that make up the sum of many parts influencing efficiencies are not showing any significant signs of improvement. Whilst productivity in manufacturing sectors has virtually doubled over the last 20 years, construction productivity has stagnated and has not improved since the early 1990s.
The Business Dictionary defines productivity as a measure of the efficiency of a person, machine, factory or system in converting inputs into useful outputs. Productivity is a critical determinant of cost efficiency.
According to the Government Construction Strategy, construction output in the UK exceeds £110 billion per annum and contributes 7% of GDP. Approximately a quarter of construction output is public sector and three-quarters is private sector. Although the sums quoted appear vast, profit margins are slim and all operating in the industry have a vested interest in resolving this ongoing issue. Construction 2025 outlined the Government's vision for the future. A key priority is faster delivery, with a target of a 50% reduction in the overall time from inception to completion for new-build and refurbished developments and a 33% reduction in the initial cost of construction and the whole life cost of built assets. The aim of the UK's Industrial Strategy is to boost productivity by backing businesses to create good jobs and increase the earning power of people throughout the country. This strategy is underpinned by an increase in the National Productivity Investment Fund to £31bn, supporting investments in transport, housing and digital infrastructure.
With a shrinking skilled workforce and the ongoing saga of Brexit, the cost of inputs versus the value of outputs is proving a difficult equation to solve. According to McKinsey research, construction productivity has been flat for decades - but new systems and technologies are part of the solution. Other industries have clearly demonstrated how adopting new technologies can play a major part in modernisation, but the biggest barrier is a change of mindset from those who want to cling onto outdated construction approaches.
The objective of the Construction Productivity Conference, taking place on 21 November 2019 in London, is to gather together those who have the skills to tackle construction's productivity conundrum and to create a platform for knowledge sharing and networking. With statistics finding that only 64% of the hours worked in construction are deemed productive, the event will focus on new technologies, logistics, supply chains, materials and waste management together with construction culture, developing human resources to establish a workforce and a sector that is fit for the future.
To read the full article, go to Offsite Hub issue 19