Construction strives for business improvements as recession bites

Profitably in the construction industry has fallen from 7.7% to 5% as workloads have fallen, margins squeezed and labour shed, according to the latest key performance indicators produced by Glenigan and Constructing Excellence on behalf of BIS and ONS.

Alan Wilén, economics director with Glenigan, commented, ‘The recession is leaving its mark. The retained workforce is being more intensively deployed, and the sharp jump in productivity over the last year is likely to include cyclical factors, alongside any incremental efficiency improvements.

‘Despite challenging economic conditions, previous improvements in client satisfaction have been sustained and predictability of project delivery, both to cost and budget, has improved further.’

Environmental performance has also improved, as evidenced by 12 out of 13 measures. Jon de Souza, director of Constructing Excellence, said, ‘The 2011 KPIs show that the industry is delivering on the green agenda, with substantial improvements recorded in on-site water usage, vehicle movements and construction waste. The industry is also delivering buildings and structures with better environmental performance. For example, the average housing SAP ratings for energy use reached an all-time best of 82.8.’

Dr Vicky Hutchinson, senior project manager with the Centre for Construction Innovation, commented, ‘Looking ahead, public- and private-sector clients face a tough financial environment and will increasingly demand that firms demonstrate their ability to deliver projects to time and budget. More clients are using KPIs to compare consultants and contractors, who have themselves realised that good benchmark scores help them win work. The recent Government Construction Strategy emphasises cost benchmarking and performance on value going forward.’