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Construction Management and Economics


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The construction productivity debate and the


measurement of service qualities
a a
Ahmet Anil Sezer & Jan Bröchner
a
Department of Technology Management and Economics, Chalmers University of
Technology, Göteborg SE-412 96, Sweden.
Published online: 27 Sep 2013.

To cite this article: Ahmet Anil Sezer & Jan Bröchner (2014) The construction productivity debate and the measurement of
service qualities, Construction Management and Economics, 32:6, 565-574, DOI: 10.1080/01446193.2013.831464

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Construction Management and Economics, 2014
Vol. 32, No. 6, 565–574, http://dx.doi.org/10.1080/01446193.2013.831464

The construction productivity debate and the


measurement of service qualities
AHMET ANIL SEZER* and JAN BRÖCHNER
Department of Technology Management and Economics, Chalmers University of Technology, Go¨teborg SE-412 96,
Sweden

Received 30 November 2012; accepted 23 July 2013


Downloaded by [University of Ottawa] at 17:06 23 November 2014

Since the 1960s, researchers have provided short-term and long-term explanations for low productivity
growth in the construction industry. In retrospect, the main challenge appears to be the measurement of
changes in heterogeneous input and output qualities. The aim here is to review earlier construction
productivity research and to compare it with more recent approaches to quality measurement used when
analysing services productivity, ultimately intending to provide guidance for using performance data from
construction projects. Relying on the EU KLEMS database, industries with similar patterns of productivity
growth are identified, primarily the business services industry. In services productivity analyses, the attempts
to introduce output quality measures reflecting customer satisfaction are particularly interesting, as this
creates a link to productivity effects on clients. A conclusion is that it should be possible to use the increas-
ing volume of performance indicator data collected for construction project benchmarking for extending the
range of output quality variables. However, resource constraints imply that it is infeasible to base industry
productivity statistics on project level data reflecting customer satisfaction and customer productivity effects.

Keywords: Business services, construction sector, productivity, quality.

Introduction firms (owner-occupied dwellings, repairs) is bought


directly by households. However, there are many
According to official statistics, productivity in the examples of business services providers also catering
construction industry grows more slowly or even to household customers. There is a renewed interest
much more slowly than in manufacturing. The in construction productivity issues, as when it is pro-
difficulty of measuring changes in output and input posed to prioritize innovation projects according to
qualities is one of several explanations for this their predicted effects on productivity (Goodrum
phenomenon. However, it has long ago been recog- et al., 2011; Bröchner and Olofsson, 2012), and this
nized that the problems of measuring quality change is another argument for reconsidering the productivity
when analysing productivity growth are not confined debate in a quality measurement perspective.
to the construction industry, and that they also affect Since the 1960s, researchers have provided
the measurement of output throughout the services short-term and long-term explanations for low produc-
sector (Griliches, 1992, p. 7). Construction as an tivity growth in the construction industry. In retrospect,
industry is traditionally assigned either to the second- the main challenge appears to be the measurement of
ary sector along with manufacturing or to the tertiary changes in heterogeneous input and output qualities.
sector. The development of the tertiary sector during Construction is not the only industry where the quality
recent decades and in particular the growth of the problem in measuring productivity is underestimated or
importance of business services makes it worthwhile evaded. It is easy to find a range of industries where the
to study the proximity of construction to these ser- problems associated with quality measurements are
vices, although some of the output from construction present, including agriculture (Craig and Pardey, 1996)

*Author for correspondence. E-mail: ahmeta@chalmers.se

Ó 2013 Taylor & Francis


566 Sezer and Bro¨chner

and services in general (Calabrese, 2012; Maroto- in labour productivity at the construction project or
Sanchez, 2012). Therefore there is a potential for devel- site level fail to be reflected in industry level data.
oping better productivity measures. Thus, the aim here The definition of the construction industry has
is to review earlier construction productivity research obvious consequences for the measurement of the
and to compare it with more recent approaches to outputs. While common usage among non-specialists
quality measurement used when analysing services tends to interpret ‘construction’ generously, including
productivity, ultimately intending to provide guidance architectural and other related professional services
for using performance data from construction projects. and materials producers who sell their products to the
The reasoning proceeds as follows. First, we review construction industry, NACE and other international
the long-running debate on growth rates for construc- classifications do not consider them to be within the
tion productivity at the industry level, where we limits of the industry (Briscoe, 2006).
analyse determinants that have been proposed. Next, As noted already in the interwar period, heterogeneity
we consider the shift in interest towards site and task of output is one of the major obstacles in the deflation
level productivity growth and attempts at reconciling of construction prices. As a consequence of output
these with aggregated, industry level figures. This leads heterogeneity in the construction industry, prices of
to a search for industries with similar problems of qual- inputs rather than outputs are used to estimate the
ity measurement, relying on the EU KLEMS database. value of construction. Pricing of inputs as an approach
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Attempts at mapping the heterogeneity of business is obviously seen as worrisome; hence Kaplan (1959)
services outputs and inputs are brought in, and the suggested the use of intermediate outputs such as cubic
related potential for data mining in construction yards of concrete foundation as a step towards direct
benchmarking schemes is identified. measurement of heterogeneous outputs.
Thus the problems of measuring the real output from
the construction industry have been an obstacle to esti-
The construction productivity debate mating its productivity. Dacy in his pioneering article
(1965) mentioned that there had been little interest in
Already before productivity measurement was studying the real output, productivity and price trends;
introduced, a range of relevant issues were identified in he went on to identify determinants that increase con-
the context of the 1930 US Census, where huge struction productivity. Already here, we find included
resources had been devoted to the collection of data on in his 1965 list: shifts in construction product mix, geo-
the construction industry (Morehouse, 1933). A graphical distribution (different design and building
number of definitional issues had to be addressed (Gill, codes in different US states), increase in construction
1933): whether to include only construction awarded firm size in contract construction, introduction of new
through contracts, whether to include alterations and techniques, decline in average age of construction work-
repairs, and whether there should be a minimum ers and increase in capital per worker. Stokes (1981)
contract sum for inclusion. Also, when discussing the basically confirmed Dacy’s reasons for low rates of pro-
measurement of construction costs, there were prob- ductivity growth in the construction industry. However,
lems associated with construction inputs: equipment Stokes (1981) was additionally able to estimate that
used and equipment rental, and how to deal with these determinants explained only 25% of the change in
‘higher grade materials going into buildings’, i.e. the productivity growth, and that capital per worker was the
input quality measurement problem was recognized. major contributor to growth. Also in the 1980s,
Three decades later, when comparing productivity research appeared to show that errors in the measure-
growth in the construction industry to that in other ment of real output did not understate productivity
industries, US economists initiated the debate of how growth as much as it had been believed: Allen (1985)
to explain the low growth rates in construction. investigated the same productivity determinants and
The debate on construction productivity has three found that the capital–labour ratio and wrong deflators
main topics: the definition (delimitation) of ‘construc- explained more than half of the low growth in
tion’; the measurement of productivity; and the construction industry productivity. Changes in the com-
factors that explain productivity growth (Goodrum position of output and regional shifts appeared as clear
et al., 2002). Moreover, important distinctions are explanations for the decline in total factor productivity
made between labour productivity, which has when Schriver and Bowlby (1985) analysed data for US
attracted more interest among researchers (Yi and building projects. Furthermore, technological advances
Chan, 2013), and total factor (multifactor) productiv- in design and construction, fluctuating demand for con-
ity. The relation between productivity measures at struction, the fragmented structure of the industry and
various levels of aggregation has also been the fragmentation of the construction process due to
investigated, notably to explain why obvious increases separation of design and construction were identified by
Construction productivity 567

Ganesan (1984) as important factors that influence con- level productivity until the end of the 1980s. By
struction industry productivity. 1990, engineering inspired analyses of construction
Summing up, we find that among the ideas brought productivity at lower levels (firm, project and activity
forward was that short- or medium-term shifts or task) began to appear. Initially, there were few con-
between types of construction projects and between struction productivity studies relying on data from the
sizes of projects could explain variations in construc- establishment (firm) level; an early study by Albrikt-
tion productivity and that there were effects of the sen and Førsund (1990) found that there were large
business cycle. A recent overview of how construction variations in efficiency among Norwegian builders,
productivity has developed in New Zealand confirms using a frontier approach and cross-sectional data for
the existence of these mechanisms, emphasizing that 1986. More recently, there have been a number of
sharp falls in productivity went along with slumps in studies applying data envelopment analysis (DEA) to
building activities (Abbott and Carson, 2012). data from the firm level (Li et al., 2013) or even for
Instead of the earlier focus on labour productivity an international comparison based on financial data
which is less costly to measure but also less informative from construction companies (Horta et al., 2013).
(Sudit, 1995), turning to total factor productivity was When looking at different levels there soon emerged
suggested already by Chau and Walker (1988). They a need to explain the discrepancy between project (or
categorized inputs as tangible and intangible, where activity) and industry level productivity growth. Basi-
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tangible ones are labour and capital, intangible ones are cally, data aggregated to the industry level show
expenditures on R&D, education, etc. Intangible inputs consistently lower values for productivity growth
improve quality of tangible inputs, provide better (Goodrum et al., 2002). Thus construction practitio-
organization and management and new technology. ners who are actively involved in the construction
Although they distinguished between tangible and process are often surprised by national statistics on
intangible inputs, they excluded intangible ones from the industry level, since they think that improvement
their way of measuring total factor productivity; instead of productivity is within their own span of control
they treated intangible inputs only as factors that influ- and that external conditions are less important (Rojas
ence productivity. and Aramvareekul, 2003b). In a study on construc-
Whereas a partial measure of productivity such as tion labour productivity in the US between 1979 and
labour productivity suffers from the difficulty of repre- 1998, the same authors (2003a) had revealed a differ-
senting the skills heterogeneity of labour inputs ence between what industry level and project level
(Schreyer, 2001), the problem of measuring a variety data suggest. They noted many problems associated
of input qualities and quality changes is felt even with the raw data and interpretation of raw data at
more strongly when estimating multifactor productiv- the industry level, which brings up the question: did
ity. To begin with, data on availability of quantities of construction labour productivity really decline? On
capital and their utilization rates are incomplete the other hand there is at least one investigation
(Sudit, 1995). Technological change can be advances (Allmon et al., 2000) that suggests that construction
in design and quality of new vintages of capital and management practices have had only a minor influ-
intermediate inputs or it can be costless such as better ence on labour productivity, whereas real wages have
management and organizational change or blueprints been depressed over two decades, implying that the
(Schreyer, 2001). Zhi et al. (2003) in their study of gap between construction and manufacturing wages
total factor productivity in Singapore developed a had been reduced successively, and technological
quality index for labour and used the proportion of improvements emerged as major explanations of
precast concrete as a measure of quality of materials. growth. These conclusions were drawn from looking
Ruddock and Ruddock (2011) analyse the effects of into data for different types of construction activities
inputs on construction productivity growth and iden- at project level, thus giving signals of the productivity
tify ICT capital as the fastest growing input while it growth discrepancy between project and industry lev-
has a modest share in overall input costs. Productivity els. However, a study of housing construction data
growth might be explained by the level of investment from the Glasgow area led Langford et al. (2000) to
in ICT; however problems arise due to the time lag conclude that use of quality assurance systems was
for a new technology to reach its full potential. associated with higher productivity at the project
level.
Many of the more recent investigations into
Levels of analysis construction labour productivity have concentrated on
the construction project level, sometimes gathering
The debate on construction productivity was domi- data at task level on construction sites. Studying con-
nated by economists and had its focus on industry struction sites, it is possible to find productivity
568 Sezer and Bro¨chner

increases clearly associated with higher inputs of real engineering productivity in particular appears to be
capital. Improvements in equipment technology seem erratic and hardly a reliable basis for analysis.
to have contributed to long-term improvements in Industry comparisons of productivity growth accord-
labour productivity (Goodrum and Haas, 2002, 2004; ing to the KLEMS database for the 1980–2005 period
Shen et al., 2011; Chia et al., 2012). reveal a varied picture. Table 1 lists industries with
In retrospect, it seems that low growth rates, labour productivity (LP, measured as value added
persisting over decades, should not or rather cannot (VA) per hour) and multifactor productivity (MFP)
be explained by productivity determinants that oper- growth rates similar to construction, according to
ate only in the short or medium term. A decline in Timmer et al. (2010). Industries with LP and MFP
the average age of the workforce cannot go on forever. growth rates similar to construction can be identified
Similar problems affect other short-term explanations: using data according to Timmer et al. (2010). Contri-
changes in geographical distribution, increase in firm butions of information and communications technol-
sizes and shifts in construction product mix. Many ogy (ICT) capital (K) to aggregate labour productivity
such determinants have been proposed since the have also been included. In principle, similarities
1960s, but the general impression of previous between construction and other industries ought to be
research is that the effects of deficiencies in output due to common problems of measurement or to
quality measurement have been underestimated and common underlying productivity factors.
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remain important. The pattern that emerges from these comparisons


is varied. It is actually easier to understand why a
number of industries fail to appear as adjacent to
Comparing with other industries construction rather than to summarize what the
neighbours in the table have in common. Neverthe-
Unlike studies of construction innovation, which often less, in the case of labour productivity growth, there
compare data with those from other industries, is a relationship to business services. Evidently,
construction productivity research has mostly stayed construction remains far from most types of manufac-
within the limits of the industry. The introduction of turing, as productivity data for eight industries never
the EU KLEMS database (Timmer et al., 2010) has appear in proximity to construction: electrical
made it easier to perform comparative analyses at the equipment, rubber and plastics, wood products,
industry level. KLEMS has influenced thinking on non-metallic minerals, transport equipment, other
construction productivity in later years, beginning machinery, textiles and footwear, other manufactur-
with Crawford and Vogl (2006) in their useful over- ing. Note that important suppliers of inputs to
view when they discuss the contribution of total factor construction are found here.
productivity to labour productivity growth in The industry pattern related to contributions from
construction. Recently, Abdel-Wahab and Vogl deepening of ICT capital to aggregate labour produc-
(2011) have compared construction productivity tivity reveals construction to be close to the retail
internationally, while Ruddock and Ruddock (2011) trade, wholesale trade and other logistics dominated
have analysed UK construction industry data in the industries. During the 1995–2005 period, the industry
KLEMS database, however without adding to the set with the greatest contribution of this nature was busi-
of explanatory factors identified by earlier research on ness services in both the EU and the US, and con-
construction productivity. However, the reliability of struction did not lag far behind. Contributions from
the KLEMS construction data is no better than the deepening of non-ICT capital to aggregate labour
figures submitted by national authorities. This is less productivity have been important for construction in
of a problem in using KLEMS for comparisons this more recent period, particularly in the EU,
between industries, but when analysing construction whereas non-ICT capital deepening had played a
productivity growth in one country, we must note that greater role for business services in the earlier period,
the growth in the UK of self-employment in construc- 1980–95. Also, there was a strong effect for construc-
tion and of workers employed in firms not registered tion as to the contribution to aggregate labour
for VAT has led to the withdrawal of construction productivity from changes in labour composition, at
productivity data from government statistics (Daffin least in the EU during the 1995–2005 period.
et al., 2002). A possible explanation for construction appearing
Statistics Denmark does publish labour productivity close to agriculture and mining is land as a produc-
data for construction, broken down into sub-branches tion factor. Fresh results from a cross-sectional study
of construction of new buildings; repair and mainte- of housing productivity in US metropolitan areas by
nance of buildings; and civil engineering; however, Albouy and Ehrlich (2012) do not exclude the possi-
the development between 1966 and 2009 of civil bility of low productivity growth caused by successive
Construction productivity 569

Table 1 KLEMS data for construction, compared to other industries (derived from Timmer et al., 2010)

Industry with slightly lower Industry with slightly higher


Productivity definition, region and time period growth, difference or contribution growth, difference or contribution
LP (gross VA/h) EU 1980–2005 Business services Petroleum refining
LP (gross VA/h) EU 1995–2005 Business services Food and beverages
LP (gross VA/h) USA 1995–2005 Mining Food and beverages
Difference in contributions to aggregate LP EU Chemicals Mining
1980–95 vs. 1995–2005
Difference in contributions to aggregate LP EU (none) Mining
vs. USA 1995–2005
Difference in contributions of ICT K to Retail trade Wholesale trade
aggregate LP EU vs. USA 1995–2005
Difference in contributions of non-ICT K to Hotels and rest. Retail trade
aggregate LP EU 1980–95 vs. 1995–2005
Contributions of non-ICT K to aggregate LP EU Transport Utilities
1995–2005
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Contributions of Labour composition change to Metal Finance


aggregate LP EU 1995–2005
MFP EU 1980–2005 Food and beverages Finance
MFP EU 1995–2005 Other services Automotive trade
Difference in MFP EU 1995–2005 vs. 1980–95 Petroleum ref. Paper, print and publ.
Difference in MFP contribution to LP EU Transport Agriculture
1995–2005 vs. 1980–95
Difference in MFP contribution to LP EU vs. Post and telecom Utilities
USA 1995–2005

Notes: LP = labour productivity; MFP = multifactor productivity; VA = value added; K = capital.

moving of new construction to worse sites. Land is 2002). A third problem is that a detailed division of
almost a non-renewable resource subject to depletion, labour overseen by management, planning and moni-
as property development in a given area tends to toring production activities, has never been widely
begin by exploiting the best sites available, those with implemented in construction projects. This challenge
the most favourable location, access to amenities, as of the ‘loosely coupled system’ (Dubois and Gadde,
well as the best geotechnical characteristics. Craig and 2002) is shared by construction and many services.
Pardey (1996) who studied productivity and quality The fourth problem is heterogeneity of material
in agriculture suggested the use of disaggregated data and land inputs, which undeniably is of little impor-
for categories of labour and land. There is an analogy tance for business services productivity, although it
with declining yield in the mining industry, and as contributes to the explanation why construction,
shown by Topp et al. (2008) for productivity in the mining and agriculture share patterns of productivity
Australian mining industry, once depletion effects growth. The fifth, and best-known problem, is the
have been removed, productivity growth is evident. heterogeneity of roads, infrastructure and buildings; it
The similarities between construction and business is difficult to claim that e.g. management consulting
services (and the dissimilarities) can be seen in is characterized by a homogeneous output. A sixth
relation to seven problems in the measurement of problem arises from durability in connection with
aggregate productivity. First, there is a problem heterogeneity, and here, construction is an outlier in
related to productivity measurement problems at an comparison with other industries. It is debatable how
aggregate level, over time in a heterogeneous industry. important the effect of durable output is, except for
Heterogeneity is certainly a characteristic of both contributing to the amplitude of demand cycles. The
construction and business services as industries. The final output measurement problem is again tied to the
second problem associated with measuring construc- custom nature of construction output, in particular
tion productivity is that construction has never sepa- client preferences for timely delivery. As almost all
rated the customer from the production process, and services are produced and consumed without a time
again, the presence of co-production in this sense is lag in between, the similarity with construction
typical of many business services (Bettencourt et al., industry demand conditions is evident.
570 Sezer and Bro¨chner

Given the similarities found, it is instructive to see just interaction with users; consumers also may be
how those who study services productivity have dealt considered to supply an input when a service takes
with the measurement of quality change and which place (Sherwood, 1994). Therefore it is reasonable to
determinants of productivity growth they have assume that the productivity of professional services is
proposed. In the case of social and personal services, related to the productivity of whatever these services
wholesale and retail trade, problems associated with are intended to support as intermediate inputs,
reflecting quality changes into prices are evident (Wölfl, although this insight is hard to translate into data col-
2003). Higher specialization, standardization, consoli- lection. Hitherto, the concept of client productivity
dation of business processes and a shift to higher value- has mainly been used in the context of management
adding services have been invoked as causes of both consulting services. For management consulting,
higher employment and higher productivity in business Nachum (1999) has proposed that client input should
services (Sako, 2006). Fox and Smeets (2011) analyse be measured as labour resources that the client has
Danish data from four manufacturing industries and used in the relationship with the consulting firm. One
four service industries, concluding that input quality problem she noted is that the time that top manage-
plays a greater role in explaining productivity dispersion ment spends on a particular project is usually not
in services; but labour quality is not the strongest expla- accounted for. As for output measures, she proposed
nation for this. Instead, management quality, business a combination of price (= turnover of the professional
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strategy, the appropriate use of new technologies and services firm) and improvement of the client firm’s
heterogeneous production technologies are suggested as competitive position, due to the services received.
explanations. Here there is the obvious difficulty of identifying the
effect of these services (Sherwood, 1994). Similar to
construction outputs, there is a time dimension in
Extending the range of construction
that the effects do not emerge instantly and should
output–input qualities
ideally be measured over a period of time.
Although there has been progress in overcoming data From an empirical viewpoint, what is lacking is
deficiencies for non-manufacturing productivity, there access to customer data that sometimes are available
are still negative trends that defy explanation (Harper for comparatively standardized consumer services. In
et al., 2010). Recently, Dyer et al. (2012) have used an principle, it should be possible to analyse surveys of
extended hedonic price index for the construction of client satisfaction with business services along the
single-family houses, but sample limitations result in dif- lines of when data from customer satisfaction surveys
ficulties when it comes to analysing productivity effects. are used for Malmquist productivity indices (Fixler
As we have seen, productivity measurement for and Zieschang, 1992; Färe et al., 2006). It is probable
most services is complicated because of quality that client satisfaction with business process service
change. Inklaar et al. (2008) highlight difficulties in qualities is strongly related to effects on client produc-
determining quality adjusted deflators for ICT invest- tivity, and this could be linked into the more general
ment which varies among countries. The current idea of multi-criteria frameworks for measuring ser-
service productivity debate has been outlined by vice performance, such as explained in the contexts of
Maroto-Sanchez (2012) where the number of biases insurance and of business incubators by Djellal and
in productivity measurement is given under catego- Gallouj (2013).
ries: choice of inputs, choice of outputs and estima- Turning again to the construction industry, there is
tion of aggregate productivity growth. However there not only the complication of the customer participating
remains the suspicion that quality change is insuffi- in the production process of construction, e.g. when
cient as an explanation for slow or even negative approving technical and schedule changes at site meet-
trends in services productivity (Fernandez and Palazu- ings. Hidden under the contractual terminology of
elos, 2012). The similarities between business services traditional design-bid-build versus design-build pro-
and construction are sufficient to make it worth jects (Ling et al., 2004) is a three-party relationship of
considering more in detail at least one stream of the (1) construction clients; (2) providers of architectural
business services literature, the one that raises the and engineering services; and (3) construction contrac-
issue of links between provider and client productivi- tors. In design-bid-build projects, clients buy profes-
ties. The underlying heterogeneity of transactions and sional services in order to specify their detailed
interaction with users leads to difficulties in standard- requirements as a basis for competitive procurement of
izing service output (Griliches, 1992, p. 7); there is construction work. Under the design-build regime, it is
little detail on the performance characteristics of pro- the construction firm that buys at least the detailed
fessionals, and even less on the characteristics and design from architectural and engineering firms,
training levels that matter for performance. It is not although at an early stage of the project, the client will
Construction productivity 571

often have bought some professional services before schemes that assess customer satisfaction (Housing
signing the construction contract. These are obviously Forum, 2004). Structured questionnaires were used
not just simple cases of customer co-production; the for telephone interviews with purchasers of new
presence of three co-producers as well as role shifts houses. Customers rated their satisfaction in terms of
along the time axis of construction projects is a further quality, construction and finish, value for money and
challenge for productivity analysis. the service provided by the contractor. Results permit
Another challenge is that of identifying the increase comparisons at firm and subsector levels. Obviously,
in customer productivity that is due to services customer satisfaction is a subjective matter. Thus
bought. Taking an example from construction, the Bakens et al. (2005) suggest the use of non-subjective
phenomenon that design and technologies affect the measures such as the period between project comple-
indoor climate of offices and the connection between tion and the settling of final accounts which may
climate and office worker productivity is increasingly reflect the alignment of client and supplier views of
recognized (Johansson, 2009). One possibility is to the project.
bring data from customer satisfaction surveys into the
analysis of how provider and client productivity
growth are related. Conclusions
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Construction presents the paradox of an old industry


Construction benchmarking that has operated in ways that are similar to more
recent business services, notably because builders
Since the publication of Rethinking Construction, the have a complicated nexus of co-production relation-
UK government report (Egan, 1998), and inspired by ships and their clients often show willingness to pay
survey practices that had evolved for the US automo- for service process qualities. It is obvious that produc-
tive industry, schemes for benchmarking performance tivity measurement for construction shares many
in construction projects have gained widespread problems with business services, related to the hetero-
popularity (Costa et al., 2006; Rankin et al., 2008). geneity of outputs and inputs as well as the measure-
These client-oriented schemes, often promoted by ment of output and input qualities. The material
public sector clients, can be said to imply new output presence of goods in construction processes is more
quality measures for the project level, while reflecting obvious and differentiates them from professional ser-
elements taken from customer satisfaction surveys vices, but the immobility of production and product
and the project success literature. The degree of must be remembered, not least since it gives rise to
contractor success in adhering to a given project sche- consequences for the environment.
dule is a key performance indicator that is typical of Construction productivity researchers have been
such schemes. Introduction of the just-in-time princi- able to identify plausible short- or medium-term
ple is an example of acknowledging that a supplier mechanisms that contribute to the dynamics of pro-
might exhibit lower productivity and the customer ductivity growth. However, the persistently low or
firm a higher productivity. Time precision, probably even negative rate of productivity growth reported for
like cost precision and quality precision, is a service the construction industry can primarily be due to
process quality that has rarely been analysed in the measurement errors. Industry productivity studies
context of construction productivity, although it is have made further progress based on the EU KLEMS
likely that there is an implicit price for such qualities. database with its advantage of a more detailed
Rankin et al. (2008) describe a benchmarking frame- accounting for inputs, recognizing differences in
work where cost and time predictability are used as labour composition and in ICT capital. At the indus-
indicators for Canadian pilot study projects; Willis try level, there remain the data difficulties of dealing
and Rankin (2012) claim that their construction with output heterogeneity and output quality change.
industry maturity model provides researchers and Data from multi-criteria performance surveys could
policy makers with an alternative to labour productiv- be used more widely to catch aspects of output qual-
ity. Their performance model allows experts to assess ity change, in conjunction with traditionally collected
the presence of key practices in cost and quality figures, provided that performance indicators are
management, again being much closer to measuring defined in a way that is consistent with traditional
cost and quality precision in relation to budgets and statistics and permits aggregation to higher levels.
specifications rather than assessing output–input The absence of international classifications and
ratios. conventions is a disadvantage as it presents an obsta-
The three Housing Forum customer satisfaction cle to comparisons between industries and between
surveys in the UK are examples of benchmarking countries.
572 Sezer and Bro¨chner

Since long ago, construction has been characterized Calabrese, A. (2012) Service productivity and service
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Research Council for Environment, Agricultural
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of Agricultural Economics, 78(5), 1349–54.


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