Direct measurement of construction productivity calculated by dividing the units of work completed by the number of hours worked. Geographically, https://hollanderhomes.com/frame-house.html the MEA region features more high-impact factors than the rest of the world, which suggests more potential opportunities for labour productivity improvements in the region. Meanwhile, at the other end of the spectrum, 48% deem construction equipment and tools to have a low impact. Figure 8 provides the construction productivity responses of the Americas. There are signs showing productivity improvements, with a larger proportion of responses indicating increasing productivity, significant or modest, in the next 12 months as opposed to the past 12 months.

• The results are presented at the global level and in five regions (the United Kingdom and Ireland (UK&I), the Middle East and Africa (MEA), Asia Pacific (APAC), Europe, and the Americas).
• Per KLEMS data, US construction productivity steadily declined from 1970 to around 1995, after which it leveled off.
• Looking closely at the regional ratings of the factors (see Table 3), the availability of skilled workers continues to show a high impact in all regions.
• They found that labor productivity declined for 30 tasks, was unchanged for 64 tasks, and improved for 107 tasks, with an average growth rate in labor productivity ranging from 0.8% to 1.8% depending on the estimating guide.
• “Availability of skilled workers is one of the key challenges in the construction industry at present, and this is echoed in this report – ranking the highest in terms of its impact on productivity.”
• It’s possible these are real (though it seems unlikely that firms suddenly got 50% more productive, then 50% less productive, over just a few years), but it’s also possible these are fictional, at least partially the result of labor inputs not being properly accounted for.

Overall, the report shows that the tightening of U.S. land use regulations has accounted for 40% of the gap in productivity growth between construction and the rest of the economy since 1965, and the lack of innovation and quality mismeasurement have each accounted for 20%. A recent academic study found properly accounting for quality improvement and several other measurement problems would raise measured annual construction productivity growth between 1990 and 2024 from the currently reported -1.0% to -0.3%. The report estimates that a 1% increase in country-level regulation intensity lowers construction productivity growth by 0.9pp when taking into account productivity factors such as investment intensity, labor quality, and other country-specific characteristics. In more recent decades, land use regulation changes explain most of the difference in construction productivity growth between the U.S. and similar industrialized countries. Between 1970 and 2024, productivity in the U.S. construction industry fell 30% while overall labor productivity more than doubled. A recent Goldman Sachs report explores why the U.S. construction industry has underproduced compared to other countries’ construction industries.

Figure 6 shows labour productivity in the MEA for the past 12 months and the next 12 months. There is an upward trend in productivity when comparing responses for the past 12 months with the next 12 months. Correspondingly, the MEA and UK&I have the highest and lowest relative importance index (RII) performance, respectively (see Table 1). The results are presented at the global level and in five regions (the United Kingdom and Ireland (UK&I), the Middle East and Africa (MEA), Asia Pacific (APAC), Europe, and the Americas). Rate the following factors impacting worker productivity in your business (high impact, moderate impact, low impact).

By this analysis, 12 of 17 tasks improved in productivity between 1954 and 1985, and 15 of 17 tasks between 1985 and 2023 got more productive. 10 tasks got more productive over the period, 10 got less productive, and 20 tasks were unchanged. We can also use different versions of estimating guides to do our own analysis of productivity trends. They found that labor productivity declined for 30 tasks, was unchanged for 64 tasks, and improved for 107 tasks, with an average growth rate in labor productivity ranging from 0.8% to 1.8% depending on the estimating guide.

• Rules restricting the size and height of new buildings also weigh on productivity growth, likely because they lead to inefficient investment decisions.
• A recent academic study found properly accounting for quality improvement and several other measurement problems would raise measured annual construction productivity growth between 1990 and 2024 from the currently reported -1.0% to -0.3%.
• Forward-looking net balances are higher than past performance in every region.
• For the 20 countries where data goes back to the 1970s (which includes most of Western Europe, the Anglosphere, Japan, and Korea), only one other country, Greece, shows declining construction productivity from 1970 to 1995, and its rate of decline is much lower than the US.

Future expectations and the optimism gap

More information on these measures can be found in https://invest24news.com/universal-foundation-technology-tise.html an article written by BLS economists in the Monthly Labor Review.

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The trend of construction productivity in the United States failing to improve over time is indeed concerning. (This is a chapter of a longer report I’m working on that summarizes and expands the last several years of my work on construction productivity. I plan on publishing one chapter a month on the newsletter, and aim to have the full report done by the end of the year.) The global construction industry faces a productivity challenge that is as much about measurement as performance. No single intervention is seen as transformative by more than half of respondents.

• The Bureau of Labor Statistics also uses BEA data, combined with its own estimates of hours worked, to calculate trends in both labor productivity and total factor productivity for a variety of sectors, including construction.
• It’s not uncommon for discussions of productivity to also reference this BLS metric; for instance, it’s used by Federal Reserve economists Daniel Garcia and Raven Molloy in their 2025 paper “Reexamining Lackluster Productivity Growth in Construction”.
• (This is a chapter of a longer report I’m working on that summarizes and expands the last several years of my work on construction productivity. I plan on publishing one chapter a month on the newsletter, and aim to have the full report done by the end of the year.)
• Thus, project-level measurements of US construction productivity also tend to show a stagnation or a decline in US construction productivity over time.
• The 2023 edition illustrated how productivity trends and measurement frequency vary across geographical regions.
• There are four main types of productivity for construction management teams to consider when trying to increase productivity.

According to an analysis by McKinsey & Company, construction productivity lags behind overall economic productivity and experienced a marked decline from 2020 to 2022. Looking closely at the regional ratings of the factors (see Table 3), the availability of skilled workers continues to show a high impact in all regions. As shown in Table 2, overall, the availability of skilled workers ranks the highest in terms of its impact on productivity, with 46% of respondents confirming its importance globally. In the last set of questions, respondents were asked to rate the impact of different factors on labour productivity. Similarly, in APAC, more than half of respondents expressed optimistic views on the productivity trend for the next 12 months. Adding to the upbeat outlook, only 8% of respondents expect productivity to fall, while only 19% saw decreasing productivity in the past 12 months.

What’s Really Behind the Construction Productivity Gap?

Europe also has growing optimism, with a larger share of respondents indicating increasing productivity compared to the past 12 months (see Figure 7). Productivity performance over the past 12 months shows a positive net balance across all regions, though with significant variation. Yet McKinsey’s 2024 research finds global construction productivity grew by just 0.4% annually between 2000 and 2022, compared with around 2% for the total economy (a total improvement of only 10% over more than two decades).

Other construction technologies that boost productivity — like building information modeling (BIM) or drones — provide additional precise data to assist planning, management and coordination among project teams. Clarity helps teams prioritize tasks effectively, allocate resources effectively and achieve objectives on schedule. Use historical data and analytics to establish realistic workflows, project timelines and resource allocation based on past performance. Early-stage planning reduces confusion and sets construction teams up for successful execution by providing clear direction and expectations. Here are some best practices that teams can target to make productivity gains that help the bottom line. Several construction industry issues impact productivity, ranging from workforce skills and motivation to the availability of materials and the effectiveness of project management techniques.

Discussions of US construction productivity often reference this Goolsbee and Syverson paper, or the data behind it. The graph below, for instance, shows trends in US construction productivity by using total construction spending as a measure of output, and total hours worked in the construction sector as a measure of input. Economists and researchers measure construction productivity in a variety of different ways. If productivity doesn’t improve, we can’t expect construction costs to fall and things like houses, roads, and bridges to get any cheaper.

Firms tend to overestimate the impact of planned changes and underestimate external headwinds, and the pattern here is consistent with that tendency. MEA rises to +54% (from +32%), the Americas jumps from +22% to +48%, and APAC moves from +9% to +38% (the largest gap of any region at 30 percentage points). Forward-looking net balances are higher than past performance in every region. Net balances (the share reporting an increase minus the share reporting a decrease) range from +32% in MEA to +9% in APAC, with Europe at +27%, the Americas at +22%, and the UK at +18%. The slightly higher adoption in the Americas and MEA may reflect more mature industry association frameworks or greater competitive pressure requiring external validation of performance claims.