Predicting Critical Management-Controlled Factors to Increase Productivity Within the Construction Industry

Abstract

The construction industry has a historical and systematic issue with declining productivity. Specifically, Construction Labor Productivity has been studied for many decades and its decline has been documented beginning as early as 1909. This decline contrasts with other industries’ productivity trends. This industry comparison is noted in this Praxis using the professional & business as well as the manufacturing industries. The Bureau of Labor Statistics shows that Construction’s Labor Productivity has decreased by 17% since 1987 and its Total Factor Productivity has decreased by 22% since 1987 even as other industries have shown increased Labor Productivity and Total Factor Productivity during the same period. 

The cost of declining productivity in construction levels a significant cost on the US, as construction represents 4.4% of the entire US Gross Domestic Product. It is hypothesized that critical management-controlled factors, including overtime, safety incidents, labor turnover, and capital productivity can be used to increase both labor and total factor productivity in the construction industry. The statistical analysis resulted in linear regression models using correlated factors with R-squared values of 75.65% and 95.89% for predicting increased Construction Labor Productivity and Total Factor Productivity, respectively.