Constructing Excellence statistics show that on cost predictability, construction cost and construction time standards have either remained static or declined.
The construction industry is still not doing enough to improve its record on cost and time overruns, according to this year’s annual Key Performance Indicators, released by Constructing Excellence.
The new KPIs show that on cost predictability, construction cost and construction time standards have either remained stagnant or declined.
The news overshadows advances made by the industry on client satisfaction, time predictability, profitability, productivity and safety, which are also contained in the new report.
In the housing sector, cost predictability has worsened over the past year with construction predictability costs falling from 56% to 49%, and project cost predictability falling from 60% to 45%, although design cost predictability rose 1% from 66% to 67%.
Time predictability in the sector has also worsened over the past year with construction time predictability falling from 62% to 56%, project time predictability falling from 49% to 44% and design time predictability falling from 55% to 51%.
As usual, Constructing Excellence statistics showed that companies that are part of its demonstration programme have dramatically outperformed the industry in measures ranging from productivity and employment issues to cost control and safety. Productivity - the median value added per employee – was found to be 63% better for the demonstration projects, compared with the general industry.
Productivity and profitability:
- Profitability has increased marginally year on year from a median of 5.9% in 2003 to 8.2% in 2004 and to 9.6% in 2005
- Productivity has increased year on year from a median of £32k value added per employee in 2003 to £36.6k in 2005
- Client satisfaction:
- Client satisfaction in the housing sector for product and services remained unchanged this year at 87% and 80% respectively (based on the percent of projects scored by clients at 8 out of 10 or better)
- Overall cost predictability has worsened over the past 12 months with:
- construction cost predictability: the proportion of projects delivered on cost or better falling from 56% to 49%
- project cost: the proportion of projects delivered on cost or better predictability falling from 60% to 45%
- Time predictability has worsened over the past 12 months with:
- construction time predictability: the proportion of projects delivered on time or better falling from 62% to 56%
- project time predictability: the proportion of projects delivered on time or better falling from 49% to 44%
- design time predictability: the proportion of projects delivered on time or better falling from 55% to 51%
- Cost and time to complete projects have improved slightly by 1% and 2.2% respectively.
- In 2005 client ratings of the impact of their projects on the environment has seen an improvement of 21%, with 53% of clients surveyed scoring environmental performance at 8 out of 10 or better in 2005, compared with 32% in 2004
- Environmental impact of the construction process was not as positive with 12% less clients rating site performance at 8 out of 10 or better (44% in 2005 compared with 56% in 2004)
- : 2005 registered positive savings in energy consumption of 10% during the construction process
- No change was recorded in the designed energy use of constructed facilities.
- : Designed water use for completed facilities improved to 30%, and a 6% improvement was recorded for the construction process.
- Waste and transport movements were further areas which registered improvements in 2005. 2005 saw a 2% decrease in the amount of waste removed from site. For transport, there were 5% fewer journeys onto building sites
- For product, the percentage of clients scoring their projects 8 out of 10 or better in terms of positive impact on biodiversity increased 5% to 33% in 2005
- For the construction process, 6% more companies were rated 8 out of 10 or better this year, taking the figure to 45% in 2005
- A final measure of Whole Life Performance of the Product saw the percentage of clients rating their projects 8 out of 10 or better in terms of good performance increasing 6% to 41% in 2005
- ONSTRUCTION CONSULTANTS
- Productivity has increased year on year and has improved from £31k value-added per employee in 2002 to £36.4k in 2005
- Profitability has also improved year on year improving from 9.8% in 2004 to 11.4% this year
- n: Client satisfaction with overall performance of their consultants rose in 2005 , with the percentage scoring 8 out of 10 or more rising from 48% in 2004 to 51% in 2005
- Client satisfaction in specific categories including Value for Money, Quality of Service, Timely Delivery and H&S Awareness fell over the last year. In the Timely Delivery category 8 out of 10 or better scores of 36% were achieved in 2005 compared with 49% in 2004 and 30% in 2003.
- Training days fell from 3.2 in 2004 to 2.0 in 2005 (industry average is 1 day training per employee)
- Client satisfaction, measured by the percentage of clients scoring projects 8 out of 10 or better, improved across the areas of design (up 10% in 2005), installation (up 4%), service (up 8%) and defects (satisfaction up 6%)
- Predictability, profitability and productivity:
- The measures of profitability and productivity saw no movement between 2004 and 2005, profitability stayed at 4.3% median profit on turnover and productivity stayed at a median of £50k value-added per employee..
- Predictability of cost and time also increased, both up 1% to 43% and 47% respectively
- The percentage of all companies achieving a zero accident incident rate rose by 12% to 32%
- A good performance was recorded by larger companies employing 60+ staff who saw an increase in the percentage achieving zero reportable accidents increasing from 9% to 13%
RESPECT FOR PEOPLE
- Employee satisfaction rose, with the percentage of employees rating satisfaction at 8 or more out of 10 increased by 10% from 41% during 2003 and 2004 to 51% in 2005
- Staff turnover has decreased year on year from a median of 7.7% in 2003 to 7.1% in 2004 to 6.7% in 2005
- Sickness absence has fallen marginally year on year with the median number of lost days decreasing from 1.8 in 2003 to 1.7 in 2004 to 1.5 in 2005
- The median hours worked in a week has fallen from 41 to 40 which is below the maximum average EU 48 working week
- The median travel time to work per day is only 25 minutes for 2004 and 2005
- The median percent of direct employees qualified to NVQ Lev 2 or higher increased from 30% in 2004 to 33% in 2005
- The median annual training days/full-time equivalent employee increased slightly from 0.8 in 2003 and 2004 to 1 in 2005
- Median gross weekly earnings have increased year on year from £365 in 2002 to £414 in 2003 to £425 in 2004 to £441 in 2005
- The percentage of workplaces scoring 8 out of 10 or better in the categories of equality and diversity has improved year on year from 44% in 2003, to 46% in 2004, to 54% in 2005
- However, the 2005 results still reflect the fact that 46% of construction workplaces are still not considered strong in equality and diversity by their employees
- The mean percentage of direct employees covered by Investors in People has hit a low this year of 14.9% after increasing steadily from 15.4% in 2002, to 16.7% in 2003, to 19% in 2004
- The accident incident rate has fallen year on year with statistics for the whole construction industry showing a reportable accident incidence rate of 1217 in 2002, 1097 in 2003, 1172 in 2004 and a significant improvement to 1023 in 2005.
- The percentage of companies achieving zero accident incidence rates has improved year on year with 31% of companies achieving a zero accident rate in 2002, 39% in 2003, 42% in 2004 and 50% in 2005