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.”
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Respondents also cited low-quality design and construction documents, outdated and unrealistic schedules, lack of coordination with general contractors, and change order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
| May 2, 2014
Top 10 countries for LEED buildings outside the U.S.
The list of the top 10 countries for LEED reflects the global adaptability of the world’s most widely used and recognized system guiding the design, construction, operations and maintenance of green buildings.
| May 1, 2014
First look: Cal State San Marcos's posh student union complex
The new 89,000-sf University Student Union at CSUSM features a massive, open-air amphitheater, student activity center with a game lounge, rooftop garden and patio, and ballroom space.
| May 1, 2014
Super BIM: 7 award-winning BIM/VDC-driven projects
Thom Mayne's Perot Museum of Nature and Science and Anaheim's new intermodal center are among the 2014 AIA TAP BIM Award winners.
| May 1, 2014
Chinese spec 'world's fastest' elevators for supertall project
Hitachi Elevator Co. will build and install 95 elevators—including two that the manufacturer labels as the "world's fastest"—for the Kohn Pedersen Fox-designed Guangzhou CTF Finance Center.
| Apr 30, 2014
Visiting Beijing's massive Chaoyang Park Plaza will be like 'moving through a urban forest'
Construction work has begun on the 120,000-sm mixed-use development, which was envisioned by MAD architects as a modern, urban forest.
| Apr 29, 2014
Best of Canada: 12 projects nab nation's top architectural prize [slideshow]
The conversion of a Mies van der Rohe-designed gas station and North Vancouver City Hall are among the recently completed projects to win the 2014 Governor General's Medal in Architecture.
| Apr 29, 2014
USGBC launches real-time green building data dashboard
The online data visualization resource highlights green building data for each state and Washington, D.C.
| Apr 28, 2014
Welcome to the Hive: OVA designs wild shipping container hotel for competition
Hong Kong-based OVA envisions a shipping-container hotel, where rooms could be removed at will and designed by advertisers.
Smart Buildings | Apr 28, 2014
Cities Alive: Arup report examines latest trends in urban green spaces
From vertical farming to glowing trees (yes, glowing trees), Arup engineers imagine the future of green infrastructure in cities across the world.
| Apr 25, 2014
A radiant barrier FAQ: Everything you wanted to know but were afraid to ask
There are many examples of materials developed for the space program making their way into everyday life and radiant barriers are just that. SPONSORED CONTENT
