The construction industry has a major productivity problem. McKinsey reports that labor-productivity growth in construction has increased by a measly 1% per year over the past two decades. Meanwhile, the global average is 2.8% over the same period.
Just for comparison, the labor-productivity growth for manufacturing in that same time period was 3.6%.
Construction firms also consistently struggle to prevent cost overruns. When it comes to megaprojects, the statistics are even more alarming:
- 98% of projects incur cost overruns or delays reducing customer satisfaction.
- The average cost increase is 80% of the original value.
- The average slippage is 20 months behind the original schedule.
Because construction projects involve multiple stakeholders, there are many areas that contribute to the lack of productivity. Miscommunication between project managers, firm offices, and field workers, as well as errors or clashes in scheduling, or improper handling of tools, are common culprits.
Fortunately, software solutions, such as QuickBooks® Enterprise for contractors and the construction industry, is tailored to increase efficiency and combat productivity issues. With the ability to know who is doing what and where in just a few clicks, construction businesses have more visibility into their people, cash flow, and costs.
With this in mind, here are the core functions that can help increase construction productivity.