Construction Productivity: Flat or Declining
More than half of the companies responding to a recent survey about construction productivity say that their output has been flat or even decreasing over the past five years. Furthermore, according to FMI's 2004-2005 Contractor Productivity Survey, 81% of those surveyed feel that they could save more than 5% of their annual field labor costs if productivity management were improved.
Respondents included general contractors and subcontractors ranging in annual revenues from $15 million to more than $100 million. The report acknowledges that there is no industry-accepted formula for productivity, but trends were revealed through the opinions and experience of industry executives. "It seems that the industry has a belief that they can save their way to prosperity," said FMI director Scott Kimpland, also the author of the report. "That particular mindset might explain why our industry has not been able to change overall performance significantly."
The report did reveal some positive results, such as a notable increase in pre-job planning. This year's report indicated that 47% of respondents used a formal pre-job planning process, an improvement of more than 33% from FMI's 2003 survey.
Overall, the importance of leadership and planning at all organizational levels stood out. In fact, the companies that reported significant improvements in productivity over the past five years gave credit to good project management. Of those companies, 64% said their product managers were doing a great job compared with only 26% for all respondents.
For a copy of the 2004-2005 survey results, e-mail FMI marketing coordinator Phil Warner .