Measured by value added, construction productivity has developed in recent decades like a dead person's brain curve. However, the measurement method does not tell, for example, the benefits of pre-fabrication. In order to get a better grasp of the factors affecting productivity and to improve efficiency, we wanted to develop a way to specifically measure labor productivity in the entire value chain of construction.
The productivity of construction work is a key factor that has a direct impact on resources, costs, schedules and emissions. Unfortunately, the productivity of construction work is low and has not significantly increased in the last 50 years, although other developments have taken place. For example, construction sites are significantly safer workplaces today, the quality and technology of buildings have also improved, and various digital tools are used in production control.
When the productivity of different industries is examined through value addition, expenses are deducted from the sales price and the difference is divided by the working hours used. This metric does not necessarily tell the whole truth, because the construction value chain is very multidimensional, including several different actors such as designers, material suppliers, pre-manufacturers and various (special) contractors. Taking into account the entire value chain provides a more comprehensive picture of work productivity in the construction industry.
Together with Aalto University, we have now completed the first phase of the value chain productivity project. Staffan Fagerudd did a diploma thesis on the research, which was supervised by Aalto's professor Antti Peltokorven with.
The new measurement method indicates productivity in hours per gross square meter
We defined the value chain of the construction examined in the study, which was defined as starting from the application for a building permit and ending with the handover of the object, including all the work done by the design departments, the factory hours of pre-fabrication and the work hours of site implementation, excluding the manufacture of construction products, earthworks and placement work. Working hours per gross area (h/brm²) were chosen as the unit of measure for the value chain.
We tested this calculation model for 11 apartment buildings completed in 2023, whose construction has been carried out by FIRA, Jatke and SRV. The sizes of the properties varied between 36 and 136 apartments. According to the results, it takes an average of 13 hours of work to complete one (gross) square in Finnish apartment building construction. The hours are distributed in the value chain in such a way that one hour is planned, two are done in the factory and ten on the site.
A theoretical reference point for the total duration of the construction site implementation can be found in the RATU card "Total work flow of the residential construction project", where the total work flow is determined for an example apartment building with 59 apartments. When earthworks are removed from the total work flow, the total duration is 8,6 tth/brm². If this normal duration were to be reached in Finland, it would roughly mean (now with already reduced volumes) a saving of about 2 million working hours on apartment building sites alone. If the entire construction could achieve a corresponding improvement in work efficiency (-13,6%), it would roughly mean a cost saving of 2 billion euros.
The study found a clear relationship in that labor productivity is typically better in larger construction projects than in smaller ones. In addition, the use of preforms reduced the total hours. This suggests that planning in the different stages of construction, standardization and industrial manufacturing are ways to improve productivity.
In Finland, the efficiency is twice as good as in Singapore
The study also tried to map control results from other parts of the world, and to a small surprise, no similar studies were found. The only benchmark was obtained from the Singapore Government Building Agency (BCA), which has been systematically collecting a corresponding efficiency figure from various construction sectors since 2010.
The labor productivity of the Finnish high-rise building site proved to be twice as efficient as the Singaporean control site (free-financed housing site without earthworks). The study did not carry out a more detailed analysis of the effects and comparability of products, conditions, regulations or other factors, but in general it can be stated that Finnish work productivity is at a significantly better level. This also corresponds to my own everyday observations after visiting Singaporean construction sites.
A more holistic approach to measuring work productivity offers valuable new information to the construction industry. It helps identify productivity bottlenecks and find ways to improve the efficiency of the entire value chain, which is vital for the industry's competitiveness and sustainability.
At RT, we challenge the entire industry to measure labor productivity in a new way, and we are ready to help every company collect this data so that it becomes the industry standard, as, for example, TR measurement has become. This research is only the first step, and the change to an even more productive construction will be done together.
See also
Antti Aaltonen
Director, construction development
antti.aaltonen@rt.fi +358 40 514 3626Confederation of Finnish Construction Industries (CFCI)
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