Industry leaders have called for the adoption of new business and financial measures to help solve “construction’s great puzzle” of poor productivity.
Research by the Chartered Institute of Building (see file, attached) found improvements must be made in both the way productivity is measured and how government intervention can improve the industry’s record.
Construction productivity has barely improved since 1997, with output per hour standing at £15,431 per worker for Q3 2015 – only 1.4 per cent higher than in 1997.
More than half of industry professionals surveyed by the CIOB said direct commissioning by the government during a recession would help to boost the industry’s productivity.
Respondents also cited the establishment of the National Infrastructure Commission and an increase in training funding as two further ways that productivity could be improved.
Industry leaders called for public sector contractors to encourage private companies to improve productivity, with 38 per cent of respondents citing it as one of the top three ways of boosting productivity in construction.
CIOB senior vice president Paul Nash said: “Construction, and the wider built environment, has a major bearing on how productive we are as a nation.
“Better buildings and infrastructure contribute to productivity not just through their primary function or by increasing economic output.
“By making people happier, safer and healthier, benefits which are often overlooked, the built environment encourages them to be more productive.”
A further 37 per cent said that enhancing incentives to deliver ‘greener’ buildings through grants and tax breaks would also help productivity to improve.
The research also surveyed the views of 150 MPs, half of whom said that direct commissioning was one of the top three ways that industry could improve productivity, while a further 30 per cent said the NIC would help to do so.
However, less than 20 per cent of MPs said increasing public spending on research and development would improve productivity.
Industry experts said “onerous tendering processes”, “duplication of effort”, and “underinvestment in innovation” were just some of the challenges the industry must tackle in this area (see box).
The CIOB suggested that construction firms’ business models, while “appropriate for the current political, economic, social and technological climate”, were not necessarily being made “in the long-term interest of the industry and wider economy”.
The research also showed that government data was failing to fully capture the extent of the industry’s output, and argued that “a more complete and consistent set of data measuring the built environment” would provide a “significantly better understanding of how construction delivers value”.
The ONS was criticised this month for recording a 3.6 per cent decline in construction output during March.