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Project delays a concern as profits and productivity rise

Profits and productivity have increased in the last 12 months marking a return to growth ibn the construction industry, according to a new report funded by the Construction Industry Training Board (CITB).

The 2015 UK Construction Key Performance Indicators (KPI) Annual Report, prepared for the CITB by Glenigan, shows that the median profit margin rose from 2.1% in 2014 to 2.8% this year.

Productivity also improved in the same period.

Figures gathered show that 69% of project came in on or below budget but only 40% of schemes were completed on time.

“The rapid upturn in activity during 2014 put pressure on capacity, manifesting itself in rising material and labour costs and extended delivery times,” said Glenigan economics director Allan Wilén. “Evidence from this year’s KPIs suggests that construction firms have managed to keep control of costs, but delays to schedule have worsened.

“The impact of accelerated industry growth is most evident in the workforce indicators. Staff turnover was up to 5.3%, the highest level since 2008, and staff loss is down to 6.3%.

“The construction industry is looking to a progressive growth in workload over the next few years. However the anticipated recovery presents fresh challenges: growing and up-skilling the workforce, delivering improved productivity and containing costs will be priorities.”

Other key findings

  • The average proportion of women in the workforce has decreased from 19% to 13% in the latest survey.
  • The accident incidence rate has fallen to 412 accidents per 100,000 employees, a 2.3% decline on the previous year.
  • Projects have become more environmentally efficient, producing fewer CO2 emissions and creating less waste. Median energy use in construction was 199 kg CO2/ £100k project value, and the median project saw 21.6 m3 / £100k project value of waste removed from site.
  • Building Information Modelling (BIM) is being used on a small but rapidly growing proportion of projects; 13% of projects completed in 2014 compared to 9% in 2013 and 4% in 2012.

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