Construction Industry Productivity since 1950

In an industry with severe skilled labor shortages like today’s construction industry, one way to offset the challenges of a reduced labor force is through an increase in worker productivity. Unfortunately, construction productivity has declined as much as 20% over the past 5-plus decades, despite significant productivity increases across most other industries in the United States.

Construction productivity in the U.S. is in a challenging position. Project data, interviews and survey feedback indicate that overall, skilled labor productivity is in decline and shows no near-term signs of a turnaround. A number of factors have contributed to this decline including:

  • The industry’s resistance to change
  • Skilled labor shortages
  • Insufficient training
  • Owners handing off projects without completed scope

These are just a few of the major factors. While other industries have adapted technology to streamline operations, reduced labor needs, and implemented automation to increase productivity, construction productivity has decreased since 1950.

Productivity Comparison: Manufacturing Vs. Construction

While not completely commensurable, manufacturing is often compared with the construction industry relative to productivity. Today, manufacturing productivity is soaring even while total employment is dropping, and several key factors have made this possible.

    Manufacturing Compared to Construction Productivity
  • Many high manual operations that are difficult to automate and require a lot of labor to produce low value items has been outsourced to countries with a lower wage rate.
  • The U.S. is manufacturing high value products like automobiles, airplanes and defense equipment that require less labor per unit, adding value as well as a lower labor cost.
  • Manufacturing has adopted the “lean” model eliminating the need for rework and waste. This has kept direct work at extremely high levels. For many companies, this is a policy and not optional.
  • Most U.S. manufacturers have adopted high-performance work systems empowering individual workers reducing the need for multiple layers of supervision.
  • “Just in time” materials delivery has made manufacturing much more efficient, eliminating waste and reducing cost while increasing productivity.

In comparison, construction productivity has remained stagnant or declined because of slow or non-existent adoption of many of these principles and practices. For example:

  • Most high manual labor/low value work (with the exception of some modular construction) is still done in the U.S., by U.S. workers
  • Many of the trades are difficult to automate for example concrete, bricklaying, steel work etc. — tools have improved, but most trades cannot increase productivity through automation
  • Lean construction practices have been tried, but most companies have not adopted the practice at the policy level
  • Most construction still requires multiple layers of supervision

Construction productivity can be improved. The CLMA® and the Construction Users Roundtable (CURT) have produced awhite paper detailing historic construction productivity trends and outlining possible solutions to improve productivity moving forward in an environment of skilled labor shortages. By understanding the trends and taking meaningful action, companies can develop effective approaches to accomplish more work with fewer workers as a means to increase construction productivity.