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A record number of construction projects were completed on time in 2015, but profitability and productivity in the overall construction sector took a dip, according to the latest Glenigan Key Performance Indicators (KPIs) survey.
The 2016 UK Performance Report, carried out by Glenigan alongside the CITB, surveyed more than 1,000 industry representatives on projects completed in 2015.
It found that both client and contractor satisfaction improved significantly with 85% of clients rating their “overall satisfaction with the finished product” as eight out of 10 or higher – a four percentage point increase that reverses a declining trend over the last three surveys.
Contractor satisfaction with the performance of the client and consultancy teams also rose to 74% – up from 69% in the previous survey.
The accurate predictability of projects also improved, but costing forecasts fared better than allocated time predictions. 64% of projects came in on budget, a rise from the previous survey high of 59% in 2011.
There was some downturn, however, with only 41% of projects coming in on time and the predictability of the design phase slipping to 48% from 53% from last year.
Increasing labour and material costs also meant that industry profitability took a hit, dropping from 2.8% to 2.5%. And though productivity increased by 2.5% in real terms, it is still well below levels reported in 2011 when employers were making more efficient use of a slimmed down workforce.
Training levels increased from 1.2 to 1.5 training days and the take up of CSCS cards strengthened, with 75% of employees holding a card, up from 55% in 2014. Staff turnover slowed to 2.7% but more firms are reducing the size of their workforce. The average firm lost 7% of their direct employees – up from 6.3% in last year’s report.
Allan Wilén, economics director at Glenigan said: “The latest survey results reveal a construction industry working hard to meet clients’ expectations and progressively improving its performance across a wide range of economic, social and environmental measures.
“The construction industry is potentially facing a period of volatile workloads and structural change as the UK economy adapts to life outside of the EU. This will require the industry to redouble its efforts to upskill the workforce, enhance productivity and contain costs.”
Steven Radley, director of policy & partnerships, CITB said: “There are some really encouraging findings in this latest industry performance report. Improvements in client satisfaction, predictability and training levels are excellent news – especially where trends have been reversed.
“However, the findings hold stark warnings too. Increasing pressure on margins driven by tough market conditions has begun to impact the bottom line and employers are reducing their workforce to minimise risk.
“But operating on such tight margins is unsustainable. We need to find new ways to attract and develop the skilled workforce that will drive up performance and profitability. We are working with our industry to agree the best way to help it to do this.”
