Ive, G.; Crosthwaite, D.; Gruneberg, S.; Meikle, J.; (2004) Measuring the competitiveness of the UK construction industry. Volume 1. (Industry Economics and Statistics ). Department for Business, Enterprise and Regulatory Reform: UK.

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Abstract

EBS’s estimates of relative productivity in construction are as follows: 1. The US is about 25-35% ahead of the UK and Germany in terms of average labour productivity (ALP). 2. The UK is ahead of Germany in ALP on an output per worker basis, but not on an output per hour worked basis (this is due to Germans working fewer hours per week on average). These results are largely unchanged under various sensitivity tests, for example, using GDP PPP exchange rates instead of construction PPP exchange rates to convert national currencies to a common currency. The EBS estimate for the US-UK comparison is supported by UCL/DL (who estimate a US lead in ALP of 42% in 1999). UCL/DL’s estimates for the Germany-UK comparison are also similar to those of EBS, since they show Germany level with the UK in ALP on an output per worker basis, but ahead on an output per hour worked basis. Productivity comparisons of the UK with France are subject to difficulties. Depending on the exchange rates they use for conversion purposes, EBS find that France is well ahead of Britain on some measures of ALP (and indeed is close to the US) but on other measures French ALP is much the same as in Britain. UCL/DL argue strongly for using an exchange rate, which shows French construction ALP to be well ahead of the UK. They state that: ‘The French construction PPPs have been controversial for some time….[and tend to lead to] underestimates of French construction output’. There are difficulties in conducting this type of analysis that are hard to surmount, for example it is unlikely that labour inputs are well measured in any country because of illegal immigration, ‘ the hidden economy’, etc. However, unless there is reason to think that the proportion of uncounted construction workers is significantly higher or lower in Britain as compared to, say, the United States, then it seems reasonable to accept that ALP in the US construction industry is some way ahead of the UK. In many ways cross-country comparisons of productivity levels across the whole construction industry are not comparing like with like since the composition of construction output differs greatly from country to country. It is therefore hard to construct reliable national rankings based on aggregated data for construction given the present state of the data.

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