Why Construction Industry Struggles to Compete With Rival Industries
Date Posted: May 31, 2016
Posted In: Ideas,
From ConstructionDIVE: Along with labor shortages, increasing regulations and lot availability problems, one issue spans all sectors of the construction industry, leaving professionals fraught with concern. That issue is productivity. Earlier this week, Brendan Bechtel, president and COO of global construction giant Bechtel, told Fortune that stagnant productivity levels in construction leave him “haunted at night.”
A recent World Economic Forum study found that productivity gains in the construction industry have been “meager” when compared with the advancements of other industries during the last 50 years. The study said that even a 1% reduction in costs through technological and operational improvements would save the construction industry approximately $100 billion annually. However, the study also pointed out that no matter the technological advancements in the industry, the operational “fractured” aspects of construction would negate most, if not all, of the benefits.
Howard Ashcraft, partner at Hanson Bridgett LLP, consulting engineering professor at Stanford University and construction industry consultant, said that not only has construction not kept pace with the productivity of other industries, but it’s actually fallen.
Why is construction productivity at a standstill, and what can companies do to reverse the trend?