ConstructionPro Week, Volume: Construction Advisor Today - Issue: 74 - 09/24/2010

Construction Productivity Developments Emerge in United Kingdom, Singapre and Australia

Several developments involving construction productivity have emerged in the United Kingdom, Singapore, and Australia.

 

Among the developments, the U.K.'s Department for Business Innovation & Skills (BIS) recently released information indicating that the construction industry average productivity per employee increased by 15 percent in 2009, the sharpest increase in the last five years.

However, the increase has come at the cost of more than 200,000 jobs and a fall in the median profit margin from almost 10 percent a year ago to 7.7 percent, according to the department's construction key performance indicators (KPIs). Furthermore, the figures exclude companies that succumbed to the recession.

 

KPIs are used as a benchmark to improve client satisfaction and by government to measure the effectiveness of contractors. Bournemouth, U.K.-based Glenigan conducted the survey of clients, consultants, and contractors to deliver the KPIs in partnership with Constructing Excellence for BIS and the Office of National Statistics.

 

Despite the pressures faced by the industry, construction clients reported a marked increase in projects delivered to cost. Clients also believed that the industry was improving the impact of its activities on the environment.  

 

Noble Francis, economics director for the London-based Construction Products Association, believes there are several reasons for increased construction productivity in the U.K. "The movement from wet trades, such as plasters, toward dry trades such as drylining, the improvement in cladding systems, the increase in offsite construction, and the movement toward timber-frame construction are all likely to have made construction more productive in recent years." 

 

When asked which results of the study surprised him the most, Francis told CPC/BIM, "The change in the accident rate over the last few years, given that it usually goes down (per hour worked), was most striking. With falling workloads, fewer inexperienced workers are on site and should ensure the accident rate falls. However, it appears to have increased, possibly due to the driving down of prices leading to shortcuts being taken on site."

 

Approximately two million people work in construction directly with another 300,000 working in the professional side (architects, civil engineers, surveyors, etc.) and there are an estimated 400,000 people working in construction product manufacturing. Construction work was worth an estimated £92 billion (US$141.195 billion) in 2009.

 

International Committee Strives to Improve Construction Productivity
In Singapore, the International Panel of Experts (IPE) convened in mid-August to review and advise on issues related to construction productivity and the use of prefabrication technology. Singapore's Building and Construction Authority (BCA) formed the IPE.

 

Experts from Netherlands, Germany, United Kingdom, United States, Australia, Japan, and Hong Kong with expertise in design and construction management, as well as methods such as precast and prefabrication, joined local experts.

 

IPE examined key areas affecting construction productivity such as manpower development, technology adoption, capability building, regulatory framework, and procurement models. IPE's mission is to help benchmark Singapore's practices with international ones and advise on issues related to the use of prefabrication and other advanced technologies to improve construction productivity.

 

The formation of this IPE is considered timely as BCA recently launched the SGD$250-million (US$184.326-million) Construction Productivity and Capability Fund, which was coupled with policy measures to raise the quality of the workforce and enhance the "buildability" framework. In addition, the Construction Productivity Centre was set up to provide client servicing to construction firms and to support firms' productivity journey. IPE will review Singapore's current approach and suggest additional measures that could be implemented in the medium and long term to enhance and sustain construction productivity growth.

 

"We are single-minded about boosting productivity in the entire construction value chain in a sustained manner, and it is necessary to look at all possible avenues to realize our mission," BCA Chief Executive Officer John Keung said. "The formation of this IPE signifies our commitment to furthering the construction sector's productivity journey together with the industry stakeholders and partners. We are looking forward to tapping on and leveraging on the diverse background and varied experience of our IPE to provide added perspectives to our local approach."

 

Construction Productivity in Queensland, Australia, Increases
The consultancy firm Davis Langdon earlier this month reported that engineering work in Queensland, Australia, has "significantly boosted" the state's productivity in the construction industry.

 

Queensland's productivity is lagging Victoria and Western Australia in terms of building work, but the engineering sector contributed a high level of jobs per AUS$1 million (US$891,799) worth of work done, second only to Western Australia, Davis Langdon said.

 

Queensland was behind only Western Australia in terms of overall construction productivity, needing 6.3 jobs for every AUS$1 million of construction work done compared to Western Australia's 3.5, according to Davis Langdon "knowledge manager" Michael Skelton. "However, Queensland was more productive in this measure than South Australia, Victoria, and NSW. This could be due in part to the high proportion of engineering work done in Queensland -- 55 percent of construction work -- which was the second-highest in the country next to Western Australia, which has 70 percent engineering work."

 

"When the engineering work is excluded and building work only is considered, Queensland moves a bit further down the ladder of productivity, behind Victoria and Western Australia," Davis Langdon said.

 

To complete AUS$1 million of building work in Queensland, 13.9 jobs are required, compared to only 10.6 in Victoria and 11.6 in Western Australia. Labor productivity in the Australian construction industry rose through 2009 and into 2010.

 

The research took an in-depth look at the number of jobs versus each dollar of work done nationally, Skelton said. "What we have found is that the Australian construction workforce used an average of 6.3 jobs for each million dollars of work done for the year ending March 2010 compared to 6.8 jobs per million dollars for the same period in 2009. All states, with the exception of Queensland, reported construction industry labor productivity improvement over this period."

 

Two factors combined in Queensland to see its productivity versus work done fall behind, Skelton said. "First, there has been a significant slowdown in construction activity generally, and secondly, there is a tendency in local areas such as the Gold Coast and the Sunshine Coast, which experience fluctuating workflow levels, to hold onto workers even as workloads diminish. Mindful of the difficulties in finding labor in boom times some developers tend to hold on to workers as demand drops away. "The margins they experience in boom times give them the luxury of doing this, but only up to a point."

 

Davis Langdon's findings indicated that New South Wales remained the least efficient state for overall labor productivity, requiring 8.3 jobs for every AUS$1 million of work completed.

 

Skelton believes Western Australia clearly has the most efficient construction workforce, requiring only 3.5 jobs to complete AUS$1 million in construction work. "Reflecting the less labor-intensive nature of engineering construction, Victoria had the most efficient building industry workforce with 10.6 jobs required for each AUS$1 million in building work done compared to the least efficient state of New South Wales that required 16.7 jobs per million dollars in activity."

 

Western Australia remains just behind Victoria in terms of labor productivity, requiring 11.6 jobs for every AUS$1 million in building work compared to Victoria's 10.6.

 

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