Regional investment incentives in Germany: Impacts on factor demand and growth

The aim of this paper is to analyse the effects of regional investment incentives – a main component of regional policy in West Germany – on regional factor demand (investment and labor), growth and convergence of per capita income for the period 1978 to 1989. Demand for investment and labor arise from a model of cost minimization at given output with a putty-clay production function. The production function allows for regional technical efficiency. To model the output effect on factor demand an auxiliary output function is specified. In estimating the functions attention is given to the short-run dynamics and the long-run behaviour of factor demand by error-correction models. The empirical long-run relationships are then used to simulate the effects of regional investment incentives. In contrast to most studies for other countries the empirical results provide evidence that regional policy in Germany induces not only additional investment but also creates positive employment effects. However, the effects of regional investment incentives on growth and convergence of labor productivity are negligible. Received: October 1996/Accepted: May 1999     

The influence of buildability factors on rebar fixing labour productivity of beams

Buildability is one of the most important factors affecting construction labour productivity. Nonetheless, an extensive search of the literature revealed a dearth of research into its effects on in situ reinforced concrete construction, especially at the rebar fixing trade level. Buildability factors affecting rebar fixing labour productivity of major structural elements, such as foundations, columns, walls, beams and slabs, are yet to be investigated and quantified. In comparison with the other constituents of the reinforced concrete frame, rebar fixing in beams is one of the most labour‐intensive and time‐consuming activities, therefore, the objective of this research is to quantify the effects and relative influence of buildability factors on fixing labour productivity of beams. To achieve this objective, a large volume of productivity data was collected and analysed using the categorical interaction‐regression method. As a result, the effects of the variability of beam sizes, rebar diameter, stirrups diameter, reinforcement quantity, beam dimensions, and span geometry are determined. The findings show a significant influence of these factors on the labour efficiency of the fixing operation, which may be used to provide designers and construction managers with feedback on how well the designs of this activity consider the requirements of buildability, and the consequences of designers’ decisions on the labour productivity of the operation. In addition, a set of recommendations are presented, which upon implementation, can improve the buildability level of this activity, thus translate into higher labour productivity and more efficient utilization of resources.     

Did the late-2000s financial crisis influence construction labour productivity?

The late-2000s global financial crisis has wrought dramatic impacts on the construction industry. However, the issue of whether the crisis influenced the behaviours of the construction industry has not been addressed yet. This research presents an econometric approach to investigating the effects of the recent global financial crisis on construction labour productivity. By employing the error correction model and panel regression methods, the direct and indirect effects of the financial crisis on the changes in Australian construction labour productivity are explored at national and state levels. Neither the direct nor the indirect effects appear statistically significant. The results indicate that the direct effect of the financial crisis drives up construction labour productivity at the national level, while the indirect effect diminishes productivity. The effects of the financial crisis on the state construction labour productivity vary from state to state. The financial crisis influenced construction labour productivity directly and significantly in the northern and eastern regions, while the direct effects appear not significant in the other states and territories. The indirect effects of the financial crisis on productivity are statistically significant in three regions: the Australian Capital Territory, the Northern Territory and Western Australia. By comparison, the model with the financial effects fails to provide more accurate simulating results. As such, this research concludes that the influence of the late-2000s financial crisis on Australian national and state construction labour productivity is limited.     

House building,profits and social efficiency in Sweden and Britain

The paper examines why the housing sector in Britain performs so badly in producing housing. Completion rates are decreasing, dwelling quality is getting worse, while both construction costs and consumer costs are increasing. It does this through discussion of alternative routes to profitability in house building, supported by a comparative analysis of two contrasting cases: Britain and Sweden. In Britain land development gains and speculative extra profits are significant profit sources for house‐builders. Making profits through building itself is neglected; the concomitant is a fragmented labour process, loss of scale economies, low capitalisation, inadequate technical innovation and stagnant labour productivity. In Sweden house‐builders do not have easy access to land development gains or extra profits. Moreover, they are faced by a well organised and well paid labour force. They are pushed onto the road of making profit through increasing labour productivity and through product improvement. The result is controlled construction costs, improving housing quality and the capacity for sustained output.     

Optimal labor scheduling for construction projects in the middle east

In countries where the construction workers are hired on a temporary basis, the decision maker has long been confronted with the dilemma of whether to hire-fire workers in order to meet the fluctuating demand or to keep the manpower at a certain level and let the changing demand be met by overtime work. An integer programming model is presented in this paper to derive an optimal labor schedule for construction projects in the Middle East. The sign of the deviation between the overtime cost and the wage cost was found to be the key criterion in selecting the proper manpower policy.     

Analysis of craft workers' and foremen's perceptions of the factors affecting construction labour productivity

Extensive studies have been conducted to examine the factors affecting construction productivity, but efforts have rarely been made to obtain craft workers' input. A survey was administered to 1996 craft workers throughout the US to quantify the workforce's perspective of construction labour productivity. Specifically, the survey measured the impact of 83 productivity factors, which had been identified through 18 focus group sessions with craft workers and their immediate supervisors on jobsites located throughout the US. Craft workers provide detailed insight into the factors affecting their daily productivity, and most of the adversarial factors affecting construction labour productivity can be addressed by jobsite management teams. The major findings indicated that craft workers and foremen share a general perception of the factors impacting on construction productivity; however, differences do exist. Specifically, foremen reported factors related to project management and engineering drawings having a more severe impact on their productivity compared to craft workers, and craft workers reported factors related to construction materials as having a more severe impact.     

A study of the factors affecting construction durations in Hong Kong

This is the second phase of an investigation into the significant factors influencing construction duration of projects in Hong Kong. The results of the first phase led to the conclusion that larger samples were justified to investigate further the discerned relationships. Expanded samples were obtained in this second phase by adding some reported data from Hong Kong projects to the original surveyed sample. The second phase of this study also further investigates the relationships between different project characteristic variables such as the construction duration, construction cost, total gross floor area and the number of storeys in the case of buildings. Moreover, a case study on plant utilization level and site labour productivity was carried out on a building site to explore the ‘micro-factors’ that affect construction durations. The findings are of importance to all construction industry participants as the derived models help to estimate the construction duration of a project on the basis of significant macro project parameters. Additionally, the results of the case study indicate the contribution of significantly variable site productivity levels to overall construction duration and suggest an agenda for future investigations. A third phase of this study is planned incorporating more detailed data collection and analysis of significant factors, as well as international comparisons where possible.     

A comparative evaluation of planning engineers' formwork productivity rates in European construction

A bespoke methodology is utilised to analyse and compare the productivity rates of contractors' planning engineers, for in situ concrete formwork operations amongst three European construction industries, namely those of Germany, France and the U.K. Analysis of variance is used to investigate differences between the productivity rates. Based on such rates it would appear that French contractors achieve the most efficient levels of labour productivity for this particular operation, whilst the “average” British contractor is by far the least productive compared to the “average” French and German company. Although leading British contractors can compete with the best on the continent, the most unproductive companies in the U.K. are significantly inferior to those in France and Germany. Actual labour costs for this concrete operation are likely to be lowest in France even though French wage rates are marginally higher than in the U.K.; this is due to the superior labour output of French contractors.     

The construction productivity debate and the measurement of service qualities

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 increasing 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.     

Manpower output in building construction in the Arab oil-producing countries of the Gulf

The various factors affecting manpower output rates for public building-construction projects in the Arab oil-producing countries of the Gulf (excluding Iraq) have been established so that contractors and governmental agencies may be able to estimate realistically the manpower required. They must then make a judgment to allow for losses of output due to these factors. Manpower output was measured at five different construction sites in Kuwait to arrive at a recommended output rate for similar projects. Losses of output were found to be due to lack of education and training, harsh weather conditions, and religious observances.     

The impact of non‐financial incentives on bricklayers' productivity in Nigeria

High productivity is regarded as a goal that ensures long‐term survival of firms. In Nigeria's labour‐intensive construction industry, firms are currently applying various non‐financial incentive schemes aimed at improving operatives' productivity. A questionnaire survey involving the management and operatives of construction firms was conducted to determine the impact of these scheme on the productivity of bricklayers. The survey was complemented with on‐site observation and measurement of bricklayers' output on 40 construction projects in order to determine the impact of non‐financial incentive schemes on productivity. Comparative analysis of sites with and without incentives showed that non‐financial incentive schemes significantly improved bricklayers' productive time and these schemes accounted for 6% to 26% of the variations in output between the two sets of sites on block laying and concreting activities measured.     

An analysis of construction productivity differences between Canada and the United States

Comparisons of industry sectors in advanced economies since the 1960s show that the construction sector has lagged in productivity growth rates, especially in the United States. Although the US and Canadian economies are highly integrated, Canada’s experience differs in key ways. Analysis of these differences offers insight into fundamental construction productivity drivers. Three levels of analyses of construction productivity in the US are provided in this study. The first analysis compared international levels of labour productivity growth. The second compared construction productivity between the US and Canada, and the third analysed cost estimating data from RS Means estimating manuals to measure the changes in labour and partial factor productivity in the US from 1995 to 2009. Statistical significance testing indicates that labour productivity remained nearly constant in the building sub-sector and that partial factor productivity has improved at an annual compound rate of 0.66%. This supports previous findings that US construction has stagnated but is still improving in Canada, with wage differentials and training systems as potential drivers of this difference. While growth rates of productivity seem to decline with higher absolute levels of productivity, there is no evidence that high absolute productivity levels preclude significant growth.     

基于GM(1,1)包络模型的施工生产能力的确定

确定施工企业生产能力是施工企业决策者关注的重点。从分析能够反映施工生产能力成果的指标——产值入手,将研究施工生产能力的问题转化为研究企业年产值的变化规律上。运用GM(1,1)模型对产值的变化规律进行了拟合,并结合生产能力的定义,选用GM(1,1)包络模型拟合出企业生产能力函数,并通过实例论证对该方法的合理性和可行性。     

An analysis of construction productivity in Malaysia

The construction industry is an industry of major strategic importance. Its level of productivity has a significant effect on national economic growth. Productivity indicators are examined. The indicators consist of labour productivity, capital productivity, labour competitiveness, capital intensity and added value content of data, which are obtained from the published census/biannual surveys of the construction industry between the years 1999 and 2011 from the Department of Statistics of Malaysia. The results indicated that there is an improvement in the labour productivity, but the value-added content is declining. The civil engineering and special trades subsectors are more productive than the residential and non-residential subsectors in terms of labour productivity because machine-for-labour substitution is a more important process in those subsectors. The capital-intensive characteristics of civil engineering and special trade works enable these subsectors to achieve higher added value per labour cost but not the capital productivity. The added value per labour cost is lower in larger organizations despite higher capital productivity. However, the capital intensity is lower and unit labour cost is higher in the larger organizations.     

Forecasting construction industry demand,price and productivity in Singapore: the BoxJenkins approach

In academic research, the traditional Box-Jenkins approach is widely acknowledged as a benchmark technique for univariate methods because of its structured modelling basis and acceptable forecasting performance. This study examines the versatility of this approach by applying it to analyse and forecast three distinct variables of the construction industry, namely, tender price, construction demand and productivity, based on case studies of Singapore. In order to assess the adequacy of the Box-Jenkins approach to construction industry forecasting, the models derived are evaluated on their predictive accuracy based on out-of-sample forecasts. Two measures of accuracy are adopted, the root mean-square-error (RMSE) and the mean absolute percentage error (MAPE). The conclusive findings of the study include: (1) the prediction RMSE of all three models is consistently smaller than the model's standard error, implying the models' good predictive performance; (2) the prediction MAPE of all three models consistently falls within the general acceptable limit of 10%; and (3) among the three models, the most accurate is the demand model which has the lowest MAPE, followed by the price model and the productivity model.     

Drivers of productivity among construction workers: A study in a developing country

This paper reports on a study of factors affecting productivity among members of the construction workforce in Turkey. A survey of 82 construction firms in Turkey is undertaken using a questionnaire of 54 questions directed to managers, engineers, architects, and other technical staff. Using the results of the survey, economic and socio-psychological factors that affect labour performance are evaluated and discussed in detail. The results show that monetary factors remain pre-eminent in influencing productivity, but that socio-psychological factors appear to be of increasing importance in this developing economy.     

Benchmarking project performance: a guideline for assessing vulnerability of mechanical and electrical projects to productivity loss

Loss of productivity is a contentious issue that has a profound impact on modern construction, yet existing literature provides no quantitative, data-driven method to compare the productivity of different construction projects or to assess their vulnerability to productivity loss. A new mathematically derived metric, called the “Risk of Productivity Loss (RPL)” score, provides such a method. RPL is a function of multiple distinct productivity factors. The RPL score is developed from a dataset of 166 electrical and mechanical projects, which collectively amount to 7.2 million labour hours. This large sample size makes the RPL score a reliable productivity benchmark for the electrical and mechanical construction industries due to their labour-intensive nature. The higher the RPL score, the higher the risk that a given project will suffer from productivity losses. To supplement the mathematical formula presented, objective data-based weights for multiple key productivity factors have been identified, reducing the subjectivity that affects many of the existing weighting assessment methods. RPL provides the industry with a single metric that allows tracking and assessment of productivity for multiple projects at a time so that a contractor may assess the successful reduction of productivity risk factors within the projects in their company.     

The measurement of productivity in the construction industry

Productivity in the use of resource inputs is of critical importance to the construction industry. This paper is intended to discuss the relative merits of the most commonly used measures of productivity for the purpose of assessing the productive and allocative efficiency of construction in the 1980s.

The paper concludes that the total factor productivity method is the ideal against which the other approaches should be judged. Both average labour productivity and average capital productivity suffer from serious problems in assessing the efficiency of contracting operations. However, under certain circumstances, either can provide an adequate alternative measure.

Of the two main single-factor measures of productivity, capital productivity appears to be superior in most aspects to average labour productivity as a means of assessing the overall financial management of a construction firm. Notwithstanding the problems associated in contracting activities and also the difficulties inherent in obtaining suitable data, capital productivity is recommended for most circumstances when total-factor productivity measures cannot be applied.     

The impact of property price on construction output

The interaction between the construction market and the overall economy has attracted much attention, but few studies have investigated the influence of the property market on the construction market in terms of property price. The disaggregated data of Hong Kong’s housing and retail construction sectors are collected to investigate the impact of property price on construction output. The newly developed autoregressive distributed lag (ARDL) bounds testing approach and the error correction (EC)-based Granger causality test are employed. The bounds testing results suggest that there exist stable long-run relationships between construction output and property price for both housing and retail construction sectors. Specifically, a 1.00% increase in the housing price and retail price lead to a 0.55% and 0.42% increase in construction outputs for the two sectors respectively. In addition, the Granger causality tests confirm a distinct long-run causal flow from property price to construction output. Furthermore, the proposed ARDL approach provides an effective method for forecasting construction output.     

A Long-Run Model of Housing Affordability

As a result of the recommendations of the Barker Review of Housing Supply in 2004, the Department of Communities and Local Government in England commissioned the construction of an econometric model of regional housing markets in order to examine the effects of different levels of housing construction on long-run affordability. The model has been regularly used as part of the policy-making process in England. The paper describes the structure of the model, which includes sectors covering house prices, household formation, tenure, migration flows, demographics and labour markets. Furthermore, through simulation analysis, the paper examines some of the key policy questions that have occurred in UK housing in recent years.