U.S. contractors lost between $30 billion and $40 billion in 2022 due to poor labor productivity, according to a new report from FMI Corp. The survey focused on self-performing contractors, those typically engaged as a trade partner to a general contractor.
The productivity problem seems to be getting worse, the report says. Almost half (45%) of respondents to a survey conducted during the summer saw declining labor productivity, with only 23% noting improvement.
“Labor is the largest, riskiest, yet most controllable variable cost,” the report says. “Managed well, labor productivity can significantly improve bottom-line margins. Managed poorly, labor overruns, or exceeding labor budgets, can wipe out contractor profitability.”
![Poor productivity cost U.S contractors as much as $40 billion last year](/sites/default/files/inline-images/Poor%20productivity%20cost%20U.S%20contractors%20as%20much%20as%20%2440%20billion%20last%20year.png)
Respondents say 11% to 15% of field labor costs are wasted or unproductive, but better management practices could reduce labor spending by 6% to 10%, or $15 billion to $25 billion. That level of improvement would result in a 50% to 100% boost to profitability.
Respondents also cited low-quality design and construction documents, outdated and unrealistic schedules, lack of coordination with general contractors, and change order
inefficiencies as key concerns.
Related Stories
| Oct 16, 2014
Germany to commemorate Berlin Wall anniversary with 10-mile LED 'balloon' installation
The project, named Lichtgrenze (or Border of Light), makes for a colossal art installation dividing Berlin back to East and West. Eight thousand LED light-filled balloons, each 11 feet high, will line the path.
| Oct 16, 2014
Perkins+Will white paper examines alternatives to flame retardant building materials
The white paper includes a list of 193 flame retardants, including 29 discovered in building and household products, 50 found in the indoor environment, and 33 in human blood, milk, and tissues.
Sponsored | | Oct 16, 2014
Mill Brook Elementary School colors outside the lines with creative fire-rated framing solution
Among the building elements contributing to the success of the elementary school’s public learning areas is a fire-rated stairwell that supports the school’s vision for collaboration. HMFH Architects designed the stairwell to be bright and open, reflecting the playful energy of students. SPONSORED CONTENT
| Oct 15, 2014
Drones may soon assist code inspectors for construction in the UAE
The United Arab Emirates’ Ministry of Labour announced that they will start using drones to help inspectors record when construction sites are breaking laws.
| Oct 15, 2014
Harvard launches ‘design-centric’ center for green buildings and cities
The impetus behind Harvard's Center for Green Buildings and Cities is what the design school’s dean, Mohsen Mostafavi, describes as a “rapidly urbanizing global economy,” in which cities are building new structures “on a massive scale.”
| Oct 15, 2014
Final touches make 432 Park Avenue tower second tallest in New York City
Concrete has been poured for the final floors of the residential high-rise at 432 Park Avenue in New York City, making it the city’s second-tallest building and the tallest residential tower in the Western Hemisphere.
| Oct 14, 2014
Slash energy consumption in data centers with liquid-based ‘immersive-cooling’ technology
A new technology promises to push the limits of data center energy efficiency by using liquid instead of air to cool the servers.
Sponsored | | Oct 14, 2014
3 color trends drive new commercial exterior color collections
Collectively as a society, we help create color trends, which shape our businesses, recreational facilities, healthcare centers, and civic buildings. These iconic colors are now appearing in Valspar's new color collections. SPONSORED CONTENT
| Oct 14, 2014
Get inspired with the top 10 TED talks about cities
The TED talks, none of which are longer than 20 minutes, feature speakers such as architect Moshe Safdie, Rio de Janeiro Major Eduardo Paes, and animal behaviorist Amanda Burden.
| Oct 14, 2014
Richard Meier unveils design for his first tower in Taiwan
Taiwan will soon have its first Richard Meier building, a 535-foot apartment tower in Taichung City, the country’s third-largest city.