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The construction productivity debate and the

measurement of service qualities
a a
Ahmet Anil Sezer & Jan Bröchner
a
Department of Technology Management and Economics, Chalmers University of
Technology, Göteborg SE-412 96, Sweden.
Published online: 27 Sep 2013.

To cite this article: Ahmet Anil Sezer & Jan Bröchner (2014) The construction productivity debate and the measurement of
service qualities, Construction Management and Economics, 32:6, 565-574, DOI: 10.1080/01446193.2013.831464

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 Construction Management and Economics, 2014
Vol. 32, No. 6, 565–574, http://dx.doi.org/10.1080/01446193.2013.831464

The construction productivity debate and the

measurement of service qualities
AHMET ANIL SEZER* and JAN BRÖCHNER
Department of Technology Management and Economics, Chalmers University of Technology, Go¨teborg SE-412 96,
Sweden

Received 30 November 2012; accepted 23 July 2013

Downloaded by [University of Ottawa] at 17:06 23 November 2014

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 increas-
ing 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.

Keywords: Business services, construction sector, productivity, quality.

Introduction firms (owner-occupied dwellings, repairs) is bought

According to official statistics, productivity in the
construction industry grows more slowly or even
much more slowly than in manufacturing. The
difficulty of measuring changes in output and input
qualities is one of several explanations for this
phenomenon. However, it has long ago been recog-
nized that the problems of measuring quality change
when analysing productivity growth are not confined
to the construction industry, and that they also affect
the measurement of output throughout the services
sector (Griliches, 1992, p. 7). Construction as an
industry is traditionally assigned either to the second-
ary sector along with manufacturing or to the tertiary
sector. The development of the tertiary sector during
recent decades and in particular the growth of the
importance of business services makes it worthwhile
to study the proximity of construction to these ser-
vices, although some of the output from construction
directly by households. However, there are many
examples of business services providers also catering
to household customers. There is a renewed interest
in construction productivity issues, as when it is pro-
posed to prioritize innovation projects according to
their predicted effects on productivity (Goodrum
et al., 2011; Bröchner and Olofsson, 2012), and this
is another argument for reconsidering the productivity
debate in a quality measurement perspective.
Since the 1960s, researchers have provided
short-term and long-term explanations for low produc-
tivity growth in the construction industry. In retrospect,
the main challenge appears to be the measurement of
changes in heterogeneous input and output qualities.
Construction is not the only industry where the quality
problem in measuring productivity is underestimated or
evaded. It is easy to find a range of industries where the
problems associated with quality measurements are
present, including agriculture (Craig and Pardey, 1996)

*Author for correspondence. E-mail: ahmeta@chalmers.se

Ó 2013 Taylor & Francis

 566
and services in general (Calabrese, 2012; Maroto-
Sanchez, 2012). Therefore there is a potential for devel-
oping better productivity measures. Thus, 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.
The reasoning proceeds as follows. First, we review
the long-running debate on growth rates for construc-
tion productivity at the industry level, where we
analyse determinants that have been proposed. Next,
we consider the shift in interest towards site and task
level productivity growth and attempts at reconciling
these with aggregated, industry level figures. This leads
to a search for industries with similar problems of qual-
ity measurement, relying on the EU KLEMS database.
Downloaded by [University of Ottawa] at 17:06 23 November 2014
Attempts at mapping the heterogeneity of business
services outputs and inputs are brought in, and the
related potential for data mining in construction
benchmarking schemes is identified.
The construction productivity debate
Already before productivity measurement was
introduced, a range of relevant issues were identified in
the context of the 1930 US Census, where huge
resources had been devoted to the collection of data on
the construction industry (Morehouse, 1933). A
number of definitional issues had to be addressed (Gill,
1933): whether to include only construction awarded
through contracts, whether to include alterations and
repairs, and whether there should be a minimum
contract sum for inclusion. Also, when discussing the
measurement of construction costs, there were prob-
lems associated with construction inputs: equipment
used and equipment rental, and how to deal with
‘higher grade materials going into buildings’, i.e. the
input quality measurement problem was recognized.
Three decades later, when comparing productivity
growth in the construction industry to that in other
industries, US economists initiated the debate of how
to explain the low growth rates in construction.
The debate on construction productivity has three
main topics: the definition (delimitation) of ‘construc-
tion’; the measurement of productivity; and the
factors that explain productivity growth (Goodrum
et al., 2002). Moreover, important distinctions are
made between labour productivity, which has
attracted more interest among researchers (Yi and
Chan, 2013), and total factor (multifactor) productiv-
ity. The relation between productivity measures at
various levels of aggregation has also been
investigated, notably to explain why obvious increases
Sezer and Bro¨chner
in labour productivity at the construction project or
site level fail to be reflected in industry level data.
The definition of the construction industry has
obvious consequences for the measurement of the
outputs. While common usage among non-specialists
tends to interpret ‘construction’ generously, including
architectural and other related professional services
and materials producers who sell their products to the
construction industry, NACE and other international
classifications do not consider them to be within the
limits of the industry (Briscoe, 2006).
As noted already in the interwar period, heterogeneity
of output is one of the major obstacles in the deflation
of construction prices. As a consequence of output
heterogeneity in the construction industry, prices of
inputs rather than outputs are used to estimate the
value of construction. Pricing of inputs as an approach
is obviously seen as worrisome; hence Kaplan (1959)
suggested the use of intermediate outputs such as cubic
yards of concrete foundation as a step towards direct
measurement of heterogeneous outputs.
Thus the problems of measuring the real output from
the construction industry have been an obstacle to esti-
mating its productivity. Dacy in his pioneering article
(1965) mentioned that there had been little interest in
studying the real output, productivity and price trends;
he went on to identify determinants that increase con-
struction productivity. Already here, we find included
in his 1965 list: shifts in construction product mix, geo-
graphical distribution (different design and building
codes in different US states), increase in construction
firm size in contract construction, introduction of new
techniques, decline in average age of construction work-
ers and increase in capital per worker. Stokes (1981)
basically confirmed Dacy’s reasons for low rates of pro-
ductivity growth in the construction industry. However,
Stokes (1981) was additionally able to estimate that
these determinants explained only 25% of the change in
productivity growth, and that capital per worker was the
major contributor to growth. Also in the 1980s,
research appeared to show that errors in the measure-
ment of real output did not understate productivity
growth as much as it had been believed: Allen (1985)
investigated the same productivity determinants and
found that the capital–labour ratio and wrong deflators
explained more than half of the low growth in
construction industry productivity. Changes in the com-
position of output and regional shifts appeared as clear
explanations for the decline in total factor productivity
when Schriver and Bowlby (1985) analysed data for US
building projects. Furthermore, technological advances
in design and construction, fluctuating demand for con-
struction, the fragmented structure of the industry and
the fragmentation of the construction process due to
separation of design and construction were identified by
 Construction productivity
Ganesan (1984) as important factors that influence con-
struction industry productivity.
Summing up, we find that among the ideas brought
forward was that short- or medium-term shifts
between types of construction projects and between
sizes of projects could explain variations in construc-
tion productivity and that there were effects of the
business cycle. A recent overview of how construction
productivity has developed in New Zealand confirms
the existence of these mechanisms, emphasizing that
sharp falls in productivity went along with slumps in
building activities (Abbott and Carson, 2012).
Instead of the earlier focus on labour productivity
which is less costly to measure but also less informative
(Sudit, 1995), turning to total factor productivity was
suggested already by Chau and Walker (1988). They
categorized inputs as tangible and intangible, where
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tangible ones are labour and capital, intangible ones are
expenditures on R&D, education, etc. Intangible inputs
improve quality of tangible inputs, provide better
organization and management and new technology.
Although they distinguished between tangible and
intangible inputs, they excluded intangible ones from
their way of measuring total factor productivity; instead
they treated intangible inputs only as factors that influ-
ence productivity.
Whereas a partial measure of productivity such as
labour productivity suffers from the difficulty of repre-
senting the skills heterogeneity of labour inputs
(Schreyer, 2001), the problem of measuring a variety
of input qualities and quality changes is felt even
more strongly when estimating multifactor productiv-
ity. To begin with, data on availability of quantities of
capital and their utilization rates are incomplete
(Sudit, 1995). Technological change can be advances
in design and quality of new vintages of capital and
intermediate inputs or it can be costless such as better
management and organizational change or blueprints
(Schreyer, 2001). Zhi et al. (2003) in their study of
total factor productivity in Singapore developed a
quality index for labour and used the proportion of
precast concrete as a measure of quality of materials.
Ruddock and Ruddock (2011) analyse the effects of
inputs on construction productivity growth and iden-
tify ICT capital as the fastest growing input while it
has a modest share in overall input costs. Productivity
growth might be explained by the level of investment
in ICT; however problems arise due to the time lag
for a new technology to reach its full potential.
Levels of analysis
The debate on construction productivity was domi-
nated by economists and had its focus on industry
567
level productivity until the end of the 1980s. By
1990, engineering inspired analyses of construction
productivity at lower levels (firm, project and activity
or task) began to appear. Initially, there were few con-
struction productivity studies relying on data from the
establishment (firm) level; an early study by Albrikt-
sen and Førsund (1990) found that there were large
variations in efficiency among Norwegian builders,
using a frontier approach and cross-sectional data for
1986. More recently, there have been a number of
studies applying data envelopment analysis (DEA) to
data from the firm level (Li et al., 2013) or even for
an international comparison based on financial data
from construction companies (Horta et al., 2013).
When looking at different levels there soon emerged
a need to explain the discrepancy between project (or
activity) and industry level productivity growth. Basi-
cally, data aggregated to the industry level show
consistently lower values for productivity growth
(Goodrum et al., 2002). Thus construction practitio-
ners who are actively involved in the construction
process are often surprised by national statistics on
the industry level, since they think that improvement
of productivity is within their own span of control
and that external conditions are less important (Rojas
and Aramvareekul, 2003b). In a study on construc-
tion labour productivity in the US between 1979 and
1998, the same authors (2003a) had revealed a differ-
ence between what industry level and project level
data suggest. They noted many problems associated
with the raw data and interpretation of raw data at
the industry level, which brings up the question: did
construction labour productivity really decline? On
the other hand there is at least one investigation
(Allmon et al., 2000) that suggests that construction
management practices have had only a minor influ-
ence on labour productivity, whereas real wages have
been depressed over two decades, implying that the
gap between construction and manufacturing wages
had been reduced successively, and technological
improvements emerged as major explanations of
growth. These conclusions were drawn from looking
into data for different types of construction activities
at project level, thus giving signals of the productivity
growth discrepancy between project and industry lev-
els. However, a study of housing construction data
from the Glasgow area led Langford et al. (2000) to
conclude that use of quality assurance systems was
associated with higher productivity at the project
level.
Many of the more recent investigations into
construction labour productivity have concentrated on
the construction project level, sometimes gathering
data at task level on construction sites. Studying con-
struction sites, it is possible to find productivity
 568
increases clearly associated with higher inputs of real
capital. Improvements in equipment technology seem
to have contributed to long-term improvements in
labour productivity (Goodrum and Haas, 2002, 2004;
Shen et al., 2011; Chia et al., 2012).
In retrospect, it seems that low growth rates,
persisting over decades, should not or rather cannot
be explained by productivity determinants that oper-
ate only in the short or medium term. A decline in
the average age of the workforce cannot go on forever.
Similar problems affect other short-term explanations:
changes in geographical distribution, increase in firm
sizes and shifts in construction product mix. Many
such determinants have been proposed since the
1960s, but the general impression of previous
research is that the effects of deficiencies in output
quality measurement have been underestimated and
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remain important.
Comparing with other industries
Unlike studies of construction innovation, which often
compare data with those from other industries,
construction productivity research has mostly stayed
within the limits of the industry. The introduction of
the EU KLEMS database (Timmer et al., 2010) has
made it easier to perform comparative analyses at the
industry level. KLEMS has influenced thinking on
construction productivity in later years, beginning
with Crawford and Vogl (2006) in their useful over-
view when they discuss the contribution of total factor
productivity to labour productivity growth in
construction. Recently, Abdel-Wahab and Vogl
(2011) have compared construction productivity
internationally, while Ruddock and Ruddock (2011)
have analysed UK construction industry data in the
KLEMS database, however without adding to the set
of explanatory factors identified by earlier research on
construction productivity. However, the reliability of
the KLEMS construction data is no better than the
figures submitted by national authorities. This is less
of a problem in using KLEMS for comparisons
between industries, but when analysing construction
productivity growth in one country, we must note that
the growth in the UK of self-employment in construc-
tion and of workers employed in firms not registered
for VAT has led to the withdrawal of construction
productivity data from government statistics (Daffin
et al., 2002).
Statistics Denmark does publish labour productivity
data for construction, broken down into sub-branches
of construction of new buildings; repair and mainte-
nance of buildings; and civil engineering; however,
the development between 1966 and 2009 of civil
Sezer and Bro¨chner
engineering productivity in particular appears to be
erratic and hardly a reliable basis for analysis.
Industry comparisons of productivity growth accord-
ing to the KLEMS database for the 1980–2005 period
reveal a varied picture. Table 1 lists industries with
labour productivity (LP, measured as value added
(VA) per hour) and multifactor productivity (MFP)
growth rates similar to construction, according to
Timmer et al. (2010). Industries with LP and MFP
growth rates similar to construction can be identified
using data according to Timmer et al. (2010). Contri-
butions of information and communications technol-
ogy (ICT) capital (K) to aggregate labour productivity
have also been included. In principle, similarities
between construction and other industries ought to be
due to common problems of measurement or to
common underlying productivity factors.
The pattern that emerges from these comparisons
is varied. It is actually easier to understand why a
number of industries fail to appear as adjacent to
construction rather than to summarize what the
neighbours in the table have in common. Neverthe-
less, in the case of labour productivity growth, there
is a relationship to business services. Evidently,
construction remains far from most types of manufac-
turing, as productivity data for eight industries never
appear in proximity to construction: electrical
equipment, rubber and plastics, wood products,
non-metallic minerals, transport equipment, other
machinery, textiles and footwear, other manufactur-
ing. Note that important suppliers of inputs to
construction are found here.
The industry pattern related to contributions from
deepening of ICT capital to aggregate labour produc-
tivity reveals construction to be close to the retail
trade, wholesale trade and other logistics dominated
industries. During the 1995–2005 period, the industry
with the greatest contribution of this nature was busi-
ness services in both the EU and the US, and con-
struction did not lag far behind. Contributions from
deepening of non-ICT capital to aggregate labour
productivity have been important for construction in
this more recent period, particularly in the EU,
whereas non-ICT capital deepening had played a
greater role for business services in the earlier period,
1980–95. Also, there was a strong effect for construc-
tion as to the contribution to aggregate labour
productivity from changes in labour composition, at
least in the EU during the 1995–2005 period.
A possible explanation for construction appearing
close to agriculture and mining is land as a produc-
tion factor. Fresh results from a cross-sectional study
of housing productivity in US metropolitan areas by
Albouy and Ehrlich (2012) do not exclude the possi-
bility of low productivity growth caused by successive
 Construction productivity
Table 1 KLEMS data for construction, compared to other industries (derived from Timmer et al., 2010)
Productivity definition, region and time period
LP (gross VA/h) EU 1980–2005
LP (gross VA/h) EU 1995–2005
LP (gross VA/h) USA 1995–2005
Difference in contributions to aggregate LP EU
1980–95 vs. 1995–2005
Difference in contributions to aggregate LP EU
vs. USA 1995–2005
Difference in contributions of ICT K to
aggregate LP EU vs. USA 1995–2005
Difference in contributions of non-ICT K to
aggregate LP EU 1980–95 vs. 1995–2005
Contributions of non-ICT K to aggregate LP EU
1995–2005
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Contributions of Labour composition change to
aggregate LP EU 1995–2005
MFP EU 1980–2005
MFP EU 1995–2005
Difference in MFP EU 1995–2005 vs. 1980–95
Difference in MFP contribution to LP EU
1995–2005 vs. 1980–95
Difference in MFP contribution to LP EU vs.
USA 1995–2005
Notes: LP = labour productivity; MFP = multifactor productivity; VA = value added; K = capital.
moving of new construction to worse sites. Land is
almost a non-renewable resource subject to depletion,
as property development in a given area tends to
begin by exploiting the best sites available, those with
the most favourable location, access to amenities, as
well as the best geotechnical characteristics. Craig and
Pardey (1996) who studied productivity and quality
in agriculture suggested the use of disaggregated data
for categories of labour and land. There is an analogy
with declining yield in the mining industry, and as
shown by Topp et al. (2008) for productivity in the
Australian mining industry, once depletion effects
have been removed, productivity growth is evident.
The similarities between construction and business
services (and the dissimilarities) can be seen in
relation to seven problems in the measurement of
aggregate productivity. First, there is a problem
related to productivity measurement problems at an
aggregate level, over time in a heterogeneous industry.
Heterogeneity is certainly a characteristic of both
construction and business services as industries. The
second problem associated with measuring construc-
tion productivity is that construction has never sepa-
rated the customer from the production process, and
again, the presence of co-production in this sense is
typical of many business services (Bettencourt et al.,
569
Industry with slightly lower Industry with slightly higher
growth, difference or contribution growth, difference or contribution
Business services Petroleum refining
Business services Food and beverages
Mining Food and beverages
Chemicals Mining
(none) Mining
Retail trade Wholesale trade
Hotels and rest. Retail trade
Transport Utilities
Metal Finance
Food and beverages Finance
Other services Automotive trade
Petroleum ref. Paper, print and publ.
Transport Agriculture
Post and telecom Utilities
2002). A third problem is that a detailed division of
labour overseen by management, planning and moni-
toring production activities, has never been widely
implemented in construction projects. This challenge
of the ‘loosely coupled system’ (Dubois and Gadde,
2002) is shared by construction and many services.
The fourth problem is heterogeneity of material
and land inputs, which undeniably is of little impor-
tance for business services productivity, although it
contributes to the explanation why construction,
mining and agriculture share patterns of productivity
growth. The fifth, and best-known problem, is the
heterogeneity of roads, infrastructure and buildings; it
is difficult to claim that e.g. management consulting
is characterized by a homogeneous output. A sixth
problem arises from durability in connection with
heterogeneity, and here, construction is an outlier in
comparison with other industries. It is debatable how
important the effect of durable output is, except for
contributing to the amplitude of demand cycles. The
final output measurement problem is again tied to the
custom nature of construction output, in particular
client preferences for timely delivery. As almost all
services are produced and consumed without a time
lag in between, the similarity with construction
industry demand conditions is evident.
 570
Given the similarities found, it is instructive to see
how those who study services productivity have dealt
with the measurement of quality change and which
determinants of productivity growth they have
proposed. In the case of social and personal services,
wholesale and retail trade, problems associated with
reflecting quality changes into prices are evident (Wölfl,
2003). Higher specialization, standardization, consoli-
dation of business processes and a shift to higher value-
adding services have been invoked as causes of both
higher employment and higher productivity in business
services (Sako, 2006). Fox and Smeets (2011) analyse
Danish data from four manufacturing industries and
four service industries, concluding that input quality
plays a greater role in explaining productivity dispersion
in services; but labour quality is not the strongest expla-
nation for this. Instead, management quality, business
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strategy, the appropriate use of new technologies and
heterogeneous production technologies are suggested as
explanations.
Extending the range of construction
output–input qualities
Although there has been progress in overcoming data
deficiencies for non-manufacturing productivity, there
are still negative trends that defy explanation (Harper
et al., 2010). Recently, Dyer et al. (2012) have used an
extended hedonic price index for the construction of
single-family houses, but sample limitations result in dif-
ficulties when it comes to analysing productivity effects.
As we have seen, productivity measurement for
most services is complicated because of quality
change. Inklaar et al. (2008) highlight difficulties in
determining quality adjusted deflators for ICT invest-
ment which varies among countries. The current
service productivity debate has been outlined by
Maroto-Sanchez (2012) where the number of biases
in productivity measurement is given under catego-
ries: choice of inputs, choice of outputs and estima-
tion of aggregate productivity growth. However there
remains the suspicion that quality change is insuffi-
cient as an explanation for slow or even negative
trends in services productivity (Fernandez and Palazu-
elos, 2012). The similarities between business services
and construction are sufficient to make it worth
considering more in detail at least one stream of the
business services literature, the one that raises the
issue of links between provider and client productivi-
ties. The underlying heterogeneity of transactions and
interaction with users leads to difficulties in standard-
izing service output (Griliches, 1992, p. 7); there is
little detail on the performance characteristics of pro-
fessionals, and even less on the characteristics and
training levels that matter for performance. It is not
Sezer and Bro¨chner
just interaction with users; consumers also may be
considered to supply an input when a service takes
place (Sherwood, 1994). Therefore it is reasonable to
assume that the productivity of professional services is
related to the productivity of whatever these services
are intended to support as intermediate inputs,
although this insight is hard to translate into data col-
lection. Hitherto, the concept of client productivity
has mainly been used in the context of management
consulting services. For management consulting,
Nachum (1999) has proposed that client input should
be measured as labour resources that the client has
used in the relationship with the consulting firm. One
problem she noted is that the time that top manage-
ment spends on a particular project is usually not
accounted for. As for output measures, she proposed
a combination of price (= turnover of the professional
services firm) and improvement of the client firm’s
competitive position, due to the services received.
Here there is the obvious difficulty of identifying the
effect of these services (Sherwood, 1994). Similar to
construction outputs, there is a time dimension in
that the effects do not emerge instantly and should
ideally be measured over a period of time.
From an empirical viewpoint, what is lacking is
access to customer data that sometimes are available
for comparatively standardized consumer services. In
principle, it should be possible to analyse surveys of
client satisfaction with business services along the
lines of when data from customer satisfaction surveys
are used for Malmquist productivity indices (Fixler
and Zieschang, 1992; Färe et al., 2006). It is probable
that client satisfaction with business process service
qualities is strongly related to effects on client produc-
tivity, and this could be linked into the more general
idea of multi-criteria frameworks for measuring ser-
vice performance, such as explained in the contexts of
insurance and of business incubators by Djellal and
Gallouj (2013).
Turning again to the construction industry, there is
not only the complication of the customer participating
in the production process of construction, e.g. when
approving technical and schedule changes at site meet-
ings. Hidden under the contractual terminology of
traditional design-bid-build versus design-build pro-
jects (Ling et al., 2004) is a three-party relationship of
(1) construction clients; (2) providers of architectural
and engineering services; and (3) construction contrac-
tors. In design-bid-build projects, clients buy profes-
sional services in order to specify their detailed
requirements as a basis for competitive procurement of
construction work. Under the design-build regime, it is
the construction firm that buys at least the detailed
design from architectural and engineering firms,
although at an early stage of the project, the client will
 Construction productivity
often have bought some professional services before
signing the construction contract. These are obviously
not just simple cases of customer co-production; the
presence of three co-producers as well as role shifts
along the time axis of construction projects is a further
challenge for productivity analysis.
Another challenge is that of identifying the increase
in customer productivity that is due to services
bought. Taking an example from construction, the
phenomenon that design and technologies affect the
indoor climate of offices and the connection between
climate and office worker productivity is increasingly
recognized (Johansson, 2009). One possibility is to
bring data from customer satisfaction surveys into the
analysis of how provider and client productivity
growth are related.
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Construction benchmarking
Since the publication of Rethinking Construction, the
UK government report (Egan, 1998), and inspired by
survey practices that had evolved for the US automo-
tive industry, schemes for benchmarking performance
in construction projects have gained widespread
popularity (Costa et al., 2006; Rankin et al., 2008).
These client-oriented schemes, often promoted by
public sector clients, can be said to imply new output
quality measures for the project level, while reflecting
elements taken from customer satisfaction surveys
and the project success literature. The degree of
contractor success in adhering to a given project sche-
dule is a key performance indicator that is typical of
such schemes. Introduction of the just-in-time princi-
ple is an example of acknowledging that a supplier
might exhibit lower productivity and the customer
firm a higher productivity. Time precision, probably
like cost precision and quality precision, is a service
process quality that has rarely been analysed in the
context of construction productivity, although it is
likely that there is an implicit price for such qualities.
Rankin et al. (2008) describe a benchmarking frame-
work where cost and time predictability are used as
indicators for Canadian pilot study projects; Willis
and Rankin (2012) claim that their construction
industry maturity model provides researchers and
policy makers with an alternative to labour productiv-
ity. Their performance model allows experts to assess
the presence of key practices in cost and quality
management, again being much closer to measuring
cost and quality precision in relation to budgets and
specifications rather than assessing output–input
ratios.
The three Housing Forum customer satisfaction
surveys in the UK are examples of benchmarking
571
schemes that assess customer satisfaction (Housing
Forum, 2004). Structured questionnaires were used
for telephone interviews with purchasers of new
houses. Customers rated their satisfaction in terms of
quality, construction and finish, value for money and
the service provided by the contractor. Results permit
comparisons at firm and subsector levels. Obviously,
customer satisfaction is a subjective matter. Thus
Bakens et al. (2005) suggest the use of non-subjective
measures such as the period between project comple-
tion and the settling of final accounts which may
reflect the alignment of client and supplier views of
the project.
Conclusions
Construction presents the paradox of an old industry
that has operated in ways that are similar to more
recent business services, notably because builders
have a complicated nexus of co-production relation-
ships and their clients often show willingness to pay
for service process qualities. It is obvious that produc-
tivity measurement for construction shares many
problems with business services, related to the hetero-
geneity of outputs and inputs as well as the measure-
ment of output and input qualities. The material
presence of goods in construction processes is more
obvious and differentiates them from professional ser-
vices, but the immobility of production and product
must be remembered, not least since it gives rise to
consequences for the environment.
Construction productivity researchers have been
able to identify plausible short- or medium-term
mechanisms that contribute to the dynamics of pro-
ductivity growth. However, the persistently low or
even negative rate of productivity growth reported for
the construction industry can primarily be due to
measurement errors. Industry productivity studies
have made further progress based on the EU KLEMS
database with its advantage of a more detailed
accounting for inputs, recognizing differences in
labour composition and in ICT capital. At the indus-
try level, there remain the data difficulties of dealing
with output heterogeneity and output quality change.
Data from multi-criteria performance surveys could
be used more widely to catch aspects of output qual-
ity change, in conjunction with traditionally collected
figures, provided that performance indicators are
defined in a way that is consistent with traditional
statistics and permits aggregation to higher levels.
The absence of international classifications and
conventions is a disadvantage as it presents an obsta-
cle to comparisons between industries and between
countries.
 572
Since long ago, construction has been characterized
by a mix of pure services and pure goods productive
activities, and in that sense it has not been a laggard
industry but rather prefigured what is currently the sit-
uation for advanced manufacturing firms. This is espe-
cially so when manufacturers deliver project-based
complex products closely adapted to customer
requirements and integrated with service elements.
Recognizing this integration is crucial for the develop-
ment of government productivity and innovation poli-
cies; the construction industry tends to suffer if there
is a clear divide between goods and services initiatives.
Acknowledgements
The authors are grateful to FORMAS, The Swedish
Research Council for Environment, Agricultural
Downloaded by [University of Ottawa] at 17:06 23 November 2014
Sciences and Spatial Planning, for financial support.
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