Perspectives

Construction productivity: the size of the prize

The Government’s new Industrial Strategy – launched towards the end of 2017 – makes it clear that increased productivity is crucial to solving a number of the challenges facing the UK. 

From re-balancing our economy between the North/South divide to ensuring that we have the capacity to deliver our infrastructure pipeline, a substantial productivity boost is the key to unlocking a whole host of benefits.  

In construction, it’s been recognised for years that we have a productivity problem. Despite the best efforts of the sector, our productivity has been flat for the last two decades, while other sectors – like manufacturing – have changed the way they work and delivered huge boosts to their output. 

What hasn’t been clear until now is quite how much growth we’ve been missing out on due to our failure to address the problem. 

The latest research from Mace shows that – if we’d just kept up with manufacturing since the mid-1990’s – construction could be delivering more than £100bn of additional economic growth in the UK, and providing more than £40bn in additional tax revenues to the Exchequer. 

That would be enough to pay off the predicted 2018 budget deficit, add 3% to our GDP and increase construction productivity from £25.50 an hour per worker to £38 per hour per worker.  

In that context, it is easy to see the importance of the Government’s new Construction Sector Deal, a substantial funding package that will help the sector deliver new innovations and train its workforce to be more productive. 

If the big contractors can – working with their supply chains, clients and the public sector – use this funding to deliver a transformational productivity upgrade, it’s clear that the construction sector could provide a much-needed boost to the UK economy. 

The next industrial revolution is already underway, and it will give us the opportunity to change how construction works for the better. Our research shows the scale of the prize on offer is enormous – but only if the whole sector works together. Will construction steam ahead – or will we lag behind once again? 

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