The myth of low construction productivity

The myth of low construction productivity

The focus on productivity is not likely to go away any time soon, following the Government's announcement of the economic restructuring programme in 2010 that aims to achieve an annual productivity growth rate of 2 to 3 per cent in 10 years.

At the current halfway mark in 2015, labour productivity fell into negative territory, contracting 0.8 per cent last year.

In numerous past reports on labour productivity, the construction industry was often singled out as lagging behind other industries. However, measuring construction productivity is not a straightforward task, as I discovered during my recent study of productivity indicators, conducted for the Building and Construction Authority (BCA).

The problem with measuring productivity

The complexities associated with measuring construction productivity are, however, not new.

In 1965, studies from Northern Ireland highlighted difficulties in measuring construction outputs. This is because the work done in any one year is a mixture of a wide range of all types of new building and civil engineering projects as well as repair, maintenance and refurbishment jobs.

Within each category of work, jobs vary in size, form, location and complexity. The measurement problem is aggravated further with different composition of construction outputs from year to year.

Traditionally, labour productivity is expressed as Value Added (VA) per Worker ($). How do we judge whether construction productivity is satisfactory? This is often done by comparing construction VA per Worker with that of other countries and other industries domestically.

Construction labour productivity in Singapore has often been compared with that of other advanced countries, with an outcome that is often not in our favour. VA per Worker remains one of the most commonly used indicators for international comparisons. Most advanced countries, however, do not publish such information because these statistics have been acknowledged to be unreliable.

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