Labour productivity measurement with variable returns to scale in Australia's construction industry

As an important productivity indicator, the change of labour productivity is one indispensable marker in determining the rise or fall of overall industrial performance. This study aims to address whether the labour productivity level of the Australian construction industry has, in fact, shown a huge improvement during the last few decades. This article constructs a measuring method estimating labour productivity changes based on the data envelopment analysis technique with variable returns to scale. By adopting a production frontier approach, the labour productivity index can be broken down into components attributable to efficiency change, technological progress and capital accumulation. The numerical results exemplified by a single-input and single-output system indicate that the average annual labour productivity levels of the construction industry are slowly growing in all the Australian states and territories. However, the year-on-year change in the overall labour productivity performance does not maintain a long-term increase over the period 1990–2008. The study forms the basis for further industrial productivity research. Proposals and recommendations are expected to be beneficial for making policy and strategic decisions to improve the performance of the construction industry.

A review of the cost estimation issues in the tender preparation process in construction industry

Cost estimation process is undertaken to predict the total cost of the project. Studies indicate that one of the construction company failures in contracting is because of the uncertain, incorrect, and unrealistic cost estimation. Cost estimation process are heavily influenced by the complexity of the project, scale and scope of construction, market conditions, method of construction, site constraints, client’s financial position, buildability and the location of the project. However, there are other combinations factors that have not been studied thus far. Hence, this paper focuses on the review of other researchers’ findings in relation to cost estimation issues in the construction industry. Among the findings, it has been revealed that the cost estimation issues are related to accuracy, human factors, practical knowledge and insufficient cost data/information. The aim of this paper is to investigate these factors and determining other potential factors that may influence cost estimation process in the construction industry.

The factors that affect the cost estimation activities in the tender preparation process in the Malaysian construction industry

The possibility of winning the tender is subject to the cost estimation proposed by the contractors compared to the cost estimation prepared by the client’s representative. Studies indicated that one of the construction company failures in the tendering process is due to the uncertain, incorrect, and unrealistic cost estimation. Failure to provide a competitive cost estimation on time is the main reason the contractor is not successful in winning the tender, and will not be considered for the tender evaluation stage. The aim of this paper is to validate the key factors that affect the cost estimation activities in the tender preparation process. This paper describes the results of a pilot study, from a questionnaire survey on the factors that affect the cost estimation activities in the tender preparation process. The study shows the importance of all the factors in the cost estimation activities in the tender preparation process in terms of human factors, working culture, and information technology.

Research of the construction industry efficiency in China-based on DEA panel data approach

The efficiency of the construction industry is analyzed based on provinces panel data in China in this paper. The Mean Number of Employee and the Mean Completed Investment are used as inputs. The Mean Actual Sales of Commercial Houses and the Mean Net Profit are used as outputs. Data Envelopment Analysis (DEA) model is used to measure the efficiency of the construction industry. Shanghai and Zhejiang are found technically efficient. Shandong is scale efficient but technology efficiency is lower. There are two provinces are decreasing returns to scale and other provinces are increasing returns to scale. On the whole, the technology efficiency of the construction industry of China is lower. Based on the conclusions, the paper proposes some suggestions to improve the efficiency of the construction industry in China.

Factors affecting commitment and satisfaction of project managers in the construction industry

Construction project managers normally need develop their professional knowledge and practical skills in construction technologies and management on the basis of long term work experience. Their organizational commitment and job satisfaction level significantly influence their performance attitudes and job achievements. Keeping construction project managers highly committed to and satisfied with the employed companies is extremely vital to employed construction companies but is really difficulty due to the non-attractive job circumstances. This research investigates the major demographic variables that affect the organizational commitment and job satisfaction of project managers in the construction industry. Based on an empirical study, the statistical results indicate that some demographical variables play a substantial role in construction project managers' organizational commitment and job satisfaction. With this knowledge, construction organizations can draw up operational strategies to retain their project managers.

Lessons learned practices in the UAE construction industry

The failure of learning from our mistakes or those of others, has generated unnecessary waste of time and costs, in the construction industry, due to its project based, fragmented and unstable nature. Lessons Learned, as an important way of improving projects performance, is analyzed in this study, with the aim to explore the current practice of Lessons Learned in the UAE construction industry. A literature review has revealed what “Lessons Learned” is under different contexts, and focused on various factors influencing a Lessons Learned Programme. The research method of a series of structured interviews, followed by an on line questionnaire, is adopted in this study. It was found that although the concept of Lessons Learned is quite familiar by most of professionals in the project management in the UAE construction industry, Lessons Learned practice is mainly performed in an informal way (individually or ad hoc). As for barriers for Lessons Learned practice, Culture factors, such as “Afraid to be blamed for mistakes” and “lack of learning culture” (1st and 2nd rank) influence significantly in Lessons Learned practice. It is also found that a formal lessons learned programme does exist in some organizations. However, with the lack of a dedicated Lessons Learned repository and Lessons Learnt system, Lessons Learned has yet a long way to reach its potential.

Improving the practice of subcontract nomination in the UAE construction industry

Subcontracting is a common aspect of procurement strategy in construction. The practice of subcontract nomination has produced many problems to the construction industry in the UAE. Examining the nature of associated challenges and investigating new approaches to improve the nomination practice become more critical and demanding. An initial research on the relevant literature was conducted to establish a better understanding of the problems and possible solutions. Then, a series of semi structured interviews were carried out with senior construction professionals in the UAE to examine how the findings of the initial research apply and relate to the UAE construction industry. The analysis and findings of the interviews formed the basis of a closed questions questionnaire. The respondents of the questionnaire were mainly asked to rate the nomination challenges and the approaches to improve the nomination practice. The research concluded that despite the significant reasons and benefits of nomination, the associated risks and challenges don’t encourage adopting it. The full involvement of the MC in the nomination process from the outset and the better detailed provisions of the contract nomination clauses were found the best possible approaches to improve the practice of subcontract nomination in the UAE.

Study of the road construction industry in Sri Lanka: emphasis on improving performance of the industry

Outcome of the research is to identify significant factors influencing the productivity and performance of the road construction industry in Sri Lanka and to compare the identified factors with the Australian construction industry. Also to recommend strategies to improve productivity and performance of the Sri Lankan Industry.

Energy productivity and total-factor productivity in the Australian construction industry

There is urgent need to consider energy consumption when measuring total-factor productivity in the construction industry. This paper adopts the Malmquist index method to investigate the factors affecting the energy productivity of the Australian construction industry and compares them with those decomposed from the total-factor productivity. An input-oriented distance function and a contemporaneous benchmark technology are employed to develop the data envelopment analysis models. The Malmquist productivity index is decomposed into the technological change, pure technical efficiency change and activity effect to gain comprehensive insights into changes of construction productivity in the Australian states and territories over the past two decades. Research results show that both energy productivity and total-factor productivity improved in Australia, particularly related to technological development. The pure technical efficiency and activity indices changed slightly over time or across regions. This study demonstrates that there exists a linkage between energy productivity and total-factor productivity through their technological and technical efficiency changes. The Australian construction industry could enhance these two productivities by introducing advanced technologies and implementing them efficiently.

The impact of a suicide prevention strategy on reducing the economic cost of suicide in the New South Wales construction industry

BACKGROUND: Little research has been conducted into the cost and prevention of self-harm in the workplace. AIMS: To quantify the economic cost of self-harm and suicide among New South Wales (NSW) construction industry (CI) workers and to examine the potential economic impact of implementing Mates in Construction (MIC). METHOD: Direct and indirect costs were estimated. Effectiveness was measured using the relative risk ratio (RRR). In Queensland (QLD), relative suicide risks were estimated for 5-year periods before and after the commencement of MIC. For NSW, the difference between the expected (i.e., using NSW pre-MIC [2008-2012] suicide risk) and counterfactual suicide cases (i.e., applying QLD RRR) provided an estimate of potential suicide cases averted in the post-MIC period (2013-2017). Results were adjusted using the average uptake (i.e., 9.4%) of MIC activities in QLD. Economic savings from averted cases were compared with the cost of implementing MIC. RESULTS: The cost of self-harm and suicide in the NSW CI was AU $527 million in 2010. MIC could potentially avert 0.4 suicides, 1.01 full incapacity cases, and 4.92 short absences, generating annual savings of AU $3.66 million. For every AU $1 invested, the economic return is approximately AU $4.6. CONCLUSION: MIC represents a positive economic investment in workplace safety.

Reverse logistics in the construction industry

Reverse logistics in construction refers to the movement of products and materials from salvaged buildings to a new construction site. While there is a plethora of studies looking at various aspects of the reverse logistics chain, there is no systematic review of literature on this important subject as applied to the construction industry. Therefore, the objective of this study is to integrate the fragmented body of knowledge on reverse logistics in construction, with the aim of promoting the concept among industry stakeholders and the wider construction community. Through a qualitative meta-analysis, the study synthesises the findings of previous studies and presents some actions needed by industry stakeholders to promote this concept within the real-life context. First, the trend of research and terminology related with reverse logistics is introduced. Second, it unearths the main advantages and barriers of reverse logistics in construction while providing some suggestions to harness the advantages and mitigate these barriers. Finally, it provides a future research direction based on the review.

Carbon productivity: a case study in the Australian construction industry

Climate change is a severe threat to human development. Environmental protection and economic growth are two significant dimensions of promoting sustainable global development. In this research, a two-step procedure has been applied to investigate carbon productivity, which is deemed an appropriate indicator to measure sustainable development in conjunction with carbon reduction and production advancement. A decomposition method with the Log Mean Divisia Index has been applied to explore the factors influencing carbon productivity change, including technological innovation and regional adjustment. The carbon productivity of the Australian construction industry from 1990 to 2012 was then investigated. Research results indicate that carbon productivity in Australian construction had increased significantly and could be further improved. Technological innovation has played an important role in promoting carbon productivity, while regional adjustment has remained roughly steady. Based on correlation analyses, scale of the construction market and stock of machinery and equipment had shown weak correlations with carbon productivity changes, and it was clear that improvement in carbon productivity could benefit capital productivity and investment return. The research has systematically defined carbon productivity and for the first time measured it for the construction industry. The results are expected to assist construction industries worldwide to investigate productivity performance and to identify the influencing factors for improving development sustainability.

Managing undesirable outputs in the Australian construction industry using Data Envelopment Analysis models

Carbon reduction has become one of the most significant challenges for economic growth. This paper presents the preliminary analysis of undesirable output reduction targets and emission schedules in temporal-spatial comparisons based on Data Envelopment Analysis. The reduction targets of undesirable outputs are investigated, including the maximum, input, technical and ideal reduction targets. Four Data Envelopment Analysis models that are based on a sequential benchmark technology and variable returns to scale are introduced to measure these reduction percentages. In order to formulate the optimal emission schedule of undesirable outputs, an optimal model is provided without inflation. Data from the Australian construction industry from 2000 to 2010 are employed to develop the models. The results of the analysis indicate that the Australian Government could achieve its promised carbon reduction targets in the construction industry. Most Australian regions' construction industries possess carbon mitigation potential and some of them could increase their desirable outputs if carbon were decreased. This paper suggests that policymakers can benefit from formulating various suitable undesirable output reduction objectives and schedules through the models developed. The research method can be replicated for other sectors and regions focussing on undesirable output reduction.

Profitability performance assessment in the Australian construction industry: a global relational two-stage DEA method

Effective performance measurement drives performance and supports the development of construction. Only minimal literature measuring construction performance, efficiency and effectiveness simultaneously can be identified. A global relational two-stage data envelopment analysis (DEA) method is here proposed in order to produce effective and informative performance results. A relational two-stage DEA method systematically measures overall efficiency for a whole construction system and also yields scores for the individual stages of construction. The DEA results can be directly compared through global benchmark technology. The Australian construction industry is employed in order to implement the new method, in which profitability performance as a vital indicator of business survival, and its two dimensions of efficiency and effectiveness, are measured. The construction profitability performance and efficiency measures obtained provide evidence of underperformance and a slight imbalance in Australia between 1991 and 2012, while the measures obtained for the effectiveness factor indicate better achievement. The approach here developed promotes progress in modelling two-stage performance measurement and it can be replicated worldwide by construction projects, organizations or industries in order to quantify their performance, identify internal inefficiency components and recognize competitive advantages for promoting sustainable development.