Awaiting the Construction Revolution
LONDON – For 20 years, productivity in the global construction industry has grown at an annual rate of just 1%. Now, the industry needs to enter the twenty-first century, so that it can meet increasing demand for new structures and address the world’s growing housing and infrastructure gaps.
The construction industry’s glacial pace of change is unlike that of other sectors such as agriculture and manufacturing, which have transformed their productivity performance over time. Between 1947 and 2010, US manufacturing achieved 760% cumulative real (inflation-adjusted) productivity growth, compared to just 6% for construction.
Although the construction industry has long recognized its weaknesses, it has yet to muster the will to do anything about them. But, given the pressing housing and infrastructure shortfalls around the world, this is no longer sustainable. Urbanization may be leveling off in many advanced economies, but it will continue in emerging countries. The world’s 20 largest cities, 75% of which are in Asia, will need an estimated 36 million new housing units by 2025.