When the construction industry is faced with a problem, it’s usually a case of knocking heads together and coming up with an answer.
But in the case of productivity, the industry already has the answer – it’s just a matter of figuring out how to reach it.
The CIOB’s Productivity in Construction report suggests a number of measures to address construction’s slow progress on productivity, which if statistics are to be believed, has barely improved since the 1990s.
“If we’re not measuring productivity properly, how can we improve it?”
There are a host of recommendations on how the industry needs to proceed, especially around the need to communicate better with major policy-makers, collaboration with government on direct commissioning, and the development of new business models to boost efficiency and innovation.
Yet there’s still one question that runs through the CIOB report – and one that has been raised in the past: are we really measuring productivity in construction properly? And if we’re not measuring it properly, how are we supposed to improve it?
The usual measure is output per hour and output per worker, but the report raises major question marks over whether this captures what’s really going on in the industry.
Firstly, the way productivity is measured does not adjust for potential improvement in quality or safety standards, so the level of productivity in the 1990s, on paper, appears little better than in 2016, despite modern construction techniques boosting quality significantly.
Construction’s labour-intensive status also does it no favours, suggesting a relatively low output per hour compared with an industry like real estate; ONS stats cited in the CIOB report show an output per hour of £230.60 for real estate versus £23.60 for construction.
But the crucial point is that, as they stand, ONS statistics don’t fully measure everything that constitutes construction activity.
Measures such as offsite manufacturing may well improve efficiency and productivity massively, but since manufacturing is not classified as construction output, this doesn’t feed through into the figures.
Politicians in the dark
Most importantly, a policy-maker looking at the figures will not be getting the full picture if all the different parts of construction activity are not measured properly.
“If progress can’t be measured, then the impact of policy can’t be measured either”
This runs the risk of both government and industry getting policy drastically wrong for what is actually needed.
There’s also the danger that, if progress can’t be measured, then the impact of policy changes can’t be measured either, making it all the more difficult to figure out which policy is appropriate and which isn’t.
The CIOB urges the ONS to start gathering satellite accounts for construction – like those already collected for the environment, tourism and household accounts – to help include the offsite manufacturing and maintenance sectors in the main construction output figures.
That, however, would just be the start – and it won’t be easy. But what’s important is getting the data right and communicating how construction is progressing to policy-makers – then the industry and the government can really start addressing construction’s productivity problem.