Impact of Dynamic Workforce and Workplace Variables on the Productivity of the Construction Industry: New Gross Construction Productivity Indicator

Abstract

Construction productivity is the industry’s predominant determinant of performance. Although the construction industry periodically provides large amount of data, existing studies have not fully exploited such data sets, especially relating to the overall productivity of the construction industry rather than labor productivity. This paper addresses this critical knowledge gap by statistically examining and modeling the causalities between different dynamic workforce and workplace variables and the productivity of the entire construction industry. Multivariate time-series data between 2006 and 2019 were collected for the productivity of the construction industry and 11 dynamic workforce and workplace variables: job openings, job hires, turnover or job separations, total compensation, gross job gains, gross job losses, average hourly earnings, fatalities, occupational injuries and illnesses, gross domestic product, and unemployment rate. Statistically significant relationships and causalities were examined between the response variable—productivity of the construction industry—and these 11 variables. A vector autoregression (VAR) framework was developed to model the temporal variations in the productivity of the construction industry. The developed VAR model was validated by predicting the construction productivity for the 2016–2019 period an acceptable mean average percentage error of 5.13%. Based on the findings, the paper concludes that (1) all considered dynamic workforce and workplace variables, except job openings, statistically cause fluctuations in the construction productivity; (2) the new concept of gross construction productivity is justified statistically and should be implemented in the construction industry; (3) the gross construction productivity is an additional valuable information that construction companies should consider to make different insightful and well-educated industry-related decisions; (4) the health of the construction industry needs to be studied based on the productivity of the industry as a whole rather than based on labor productivity alone; and (5) the construction industry should move toward the development of a notion of gross construction productivity indicator used to measure, evaluate, and predict the performance of the entire industry. Ultimately, this paper proposes a new indicator or index for gross construction productivity. The outcomes of this paper add to the body of knowledge by providing a better understanding of the impact of different dynamic workforce and workplace variables on the construction productivity and by offering a new concept called gross construction productivity.