BLS Study Touts Construction Productivity

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March 29, 2018

A new U.S. Bureau of Labor Statistics (BLS) study, “Measuring Productivity Growth in Construction,” shows impressive productivity gains in an industry that had previously been thought to show negative or zero productivity growth. “By focusing on specific output indexes for subsectors of construction, BLS avoided relying just on the change in cost of the materials that go into producing that product and also avoided blending outputs that may have had very different price changes,” said Ken Simonson, chief economist with the Associated General Contractors of America in explaining the new results. Three out of four of the construction sectors analyzed showed productivity gains: single-family, multifamily, and industrial. Only highway and related construction was the exception.
Graph of index of productivity in single family and multifamily new construction, showing dip in 2011 then increase.
BLS reported that from 1987 to 2016, labor productivity in single-family construction increased an average of 1.1% per year, while multifamily construction increased an average of 3.7% per year. Industrial construction, analyzed from 2006 to 2016, improved at an average annual rate of 5.3%.

The importance of subcontractor labor in the factoring was noted. Subcontractor labor accounts for 44.2% of total labor hours in single-family construction, 74.5% in multifamily construction, and 84.9% in industrial construction.
Graph Index of hours, output, and labor productivity in industrial construction, showing increase in output and productivity.
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