According to McKinsey, the construction sector is one of the largest in the world economy, with about US$10 trillion spent on construction-related goods and services every year. However, the industry’s productivity has trailed that of other sectors for decades, and there is a $1.6 trillion opportunity to close the gap.
Some highlights from the report:
- Globally, the growth in labor productivity in the construction sector averaged 1% / year over the past two decades, compared with 2.8% in the total world economy and 3.6% in manufacturing.
- The new MGI (McKinsey Global Institute) Construction Productivity Survey confirms many of the reasons for this poor performance.
- The productivity performance of global construction is not uniform.
- Examples of innovative companies and regions suggest that acting in seven areas simultaneously could increase productivity by 50-60%.
- For some time many barriers have been known for greater productivity and ways to overcome them, but the industry has been at a standstill.
Action in 7 areas can boost sector productivity by 50-60%:
- Reshape regulations
- Rewire contracts
- Rethink design
- Improve procurement and supply chain
- Improve onsite execution
- Infuse technology and innovation
- Reskill workers
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