Constructor - March/April 2018 - 19

SIMONSON SAYS

Construction Productivity is Growing,
Researchers Confirm
BY KEN SIMONSON
CHIEF ECONOMIST, AGC OF AMERICA

cally been positive" in construction. So says a careful, detailed
study posted in January by the Bureau of Labor Statistics (BLS). As
BLS notes, "This evidence contrasts sharply with the aggregate
evidence, which indicates that productivity growth in construction, as a whole, has been negative or zero for half a century."
The new BLS finding fits with the experience of many AGC
members. Contractors have been achieving productivity gains
by adopting a variety of new methods, materials and machines.
Examples include building information modeling (BIM) to reduce
rework and improve the quantities, types and scheduling for
material and craft labor; off-site manufacturing of rooms, walls
or panels; "near-site" construction of bridges that are rolled into
place overnight; drones; GPS- and laser-guided equipment; new
formulations for concrete and asphalt; and much more.
What did BLS find that other researchers missed? Past studies
generally lumped together all construction output, from homes
and apartments to highways to refineries, and all construction labor. In addition, these studies used a single price index
to "deflate" the value of construction over time. But prices of
different kinds of projects do not necessarily shift at the same
rate, and the number of residential employees relative to various
nonresidential categories has varied greatly.
BLS avoided these errors by using separate price indexes for
single- and multifamily construction, industrial construction
and highway, road and bridge construction. BLS also measured
labor input by constructing series for hours worked, not just
number of workers. That is important because contractors are
likely to increase over time when the volume of work picks up
and to keep workers on the payroll at first when business slows.
Furthermore, BLS included the work of self-employed craft workers, who contribute significantly to single-family construction.
Using properly measured output and labor input data reveals
that productivity - output per direct and subcontractor labor
hour - increased at an average annual rate of 5.5 percent for
industrial construction (between 2006 and 2016), 1.9 percent
for multifamily construction and 1.2 percent for single-family
construction (between 1987 and 2016). Highway construction
productivity increased substantially from 2005 to 2009, but
declined from 2002 to 2005 and 2009 to 2016, for an average

@Constr uctor Ma g

VISUAL3DFOCUS/SHUTTERSTOCK.COM

"CONTRARY TO EARLIER STUDIES, productivity growth has typi-

annual change of -2.2 percent over the full period. This pattern
probably reflects the ups and downs in federal and state funding
for highway construction, repair and maintenance.
Comparing the separate time periods for which data was
available for the different segments with productivity growth
in a large number of manufacturing and other industries, BLS
finds that "productivity growth in construction is not appreciably slower than in the rest of the economy." Because these four
segments account for only about 11 percent of the total hours
in construction (as of 2012), BLS is not ready to determine if
productivity growth is greater in construction as a whole than in
other industries. However, the researchers hope to expand their
coverage to other construction segments, resources permitting.
This work is hardly the last word (or number) in the long
debate over construction productivity. But it should reassure
those who believe construction is not standing still in making
better use of workers, tools, equipment and methods.
◆

MA R C H / A P R I L 2 0 1 8 | www.constructormagazine.com 19


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Table of Contents for the Digital Edition of Constructor - March/April 2018

Editor’s Note
President’s Message
CEO’s Letter
Focused on the Future
Simonson Says
2018 Construction Outlook: Positive but Workforce Challenges Persist
Span Cycles
Chapter Connection
Technology Toolbox
Legislative and Regulatory News
Member and Chapter News
Products & Services Marketplace
Index to Advertisers
Constructor - March/April 2018 - intro
Constructor - March/April 2018 - cover1
Constructor - March/April 2018 - cover2
Constructor - March/April 2018 - 3
Constructor - March/April 2018 - 4
Constructor - March/April 2018 - 5
Constructor - March/April 2018 - 6
Constructor - March/April 2018 - Editor’s Note
Constructor - March/April 2018 - 8
Constructor - March/April 2018 - President’s Message
Constructor - March/April 2018 - 10
Constructor - March/April 2018 - CEO’s Letter
Constructor - March/April 2018 - Focused on the Future
Constructor - March/April 2018 - 13
Constructor - March/April 2018 - 14
Constructor - March/April 2018 - 15
Constructor - March/April 2018 - 16
Constructor - March/April 2018 - 17
Constructor - March/April 2018 - 18
Constructor - March/April 2018 - Simonson Says
Constructor - March/April 2018 - 20
Constructor - March/April 2018 - 2018 Construction Outlook: Positive but Workforce Challenges Persist
Constructor - March/April 2018 - 22
Constructor - March/April 2018 - 23
Constructor - March/April 2018 - 24
Constructor - March/April 2018 - 25
Constructor - March/April 2018 - 26
Constructor - March/April 2018 - 27
Constructor - March/April 2018 - 28
Constructor - March/April 2018 - Span Cycles
Constructor - March/April 2018 - 30
Constructor - March/April 2018 - 31
Constructor - March/April 2018 - 32
Constructor - March/April 2018 - 33
Constructor - March/April 2018 - 34
Constructor - March/April 2018 - Chapter Connection
Constructor - March/April 2018 - 36
Constructor - March/April 2018 - Technology Toolbox
Constructor - March/April 2018 - 38
Constructor - March/April 2018 - Legislative and Regulatory News
Constructor - March/April 2018 - 40
Constructor - March/April 2018 - 41
Constructor - March/April 2018 - 42
Constructor - March/April 2018 - Member and Chapter News
Constructor - March/April 2018 - 44
Constructor - March/April 2018 - Products & Services Marketplace
Constructor - March/April 2018 - 46
Constructor - March/April 2018 - 47
Constructor - March/April 2018 - 48
Constructor - March/April 2018 - Index to Advertisers
Constructor - March/April 2018 - 50
Constructor - March/April 2018 - cover3
Constructor - March/April 2018 - cover4
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