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KPIs show meeting expectations will be increasingly challenging

The construction industry is facing the welcome prospect of a progressive strengthening in industry workload over the next few years.

However, emerging from five years of recession, the upturn presents fresh challenges as well as opportunities.

In addition, the industry faces rising expectations from clients and the task of delivering the improved productivity, efficiency and environmental performance set out in the Construction 2025 strategy. 

The latest set of KPIs provides a valuable assessment of how the protracted downturn has affected the industry and its performance. Industry profitability and staff retention have continued to decline.

Productivity up but retention challenging

On average, 7.7 per cent of firms’ direct employees had left the business during the year surveyed, with fewer than half of those departing being replaced.

Firms’ retained workforces are working more efficiently; industry productivity rose sharply during the initial downturn and the latest results show further progress with productivity rising by 2.3 per cent.

However, staff retention is likely to be an increasing challenge over the next few years, with the disruption to established teams as individuals move on posing a risk to recent productivity gains.

Securing sustained productivity growth over the long term will require renewed investment in skills and training.

Can’t gain no satisfaction

Furthermore, the latest Indicators suggest the challenging economic environment is hampering industry efforts to deliver an improved product and service to clients.

Client satisfaction with service and the finished project was unchanged on the 2012 KPIs, while clients’ perception of value for money slipped to the lowest level since 2008.

This decline points to rising client expectations, coming against a background of pressure on margins.

Technological progress

BIM is widely regarded as an important tool for the industry to meet rising customer expectations and delivering improved performance.

The survey found the use of BIM on projects is growing rapidly, albeit from a low base, with its use on project more than doubling to 9 per cent of completed projects.

Glenigan is now actively tracking BIM usage on projects in the development pipeline; a more detailed assessment of its deployment is planned for future KPI surveys as the deadline approaches for the mandatory use of BIM on central government projects.

Indeed, as the industry responds to these challenges, the KPIs report will continue to provide firms with the benchmark against which they can appraise their own performance and help identify where they can improve to help safeguard their competitive position and win work.

Allan Wilén is economics director at Glenigan

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