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REVIEW : Construction’s age-old productivity problem persists

McKinsey predicts a potential 70% growth in the global construction industry by 2040. However, there is no indication that the labor market can meet this demand, considering that construction companies worldwide are already facing challenges in finding enough skilled workers for current projects. Rather than relying solely on hiring more workers, the solution lies in enhancing the industry's economic value added per hour worked.


Between 2000 and 2022, the construction sector experienced only a 10% increase in productivity, which equates to a meager 0.4% annual growth rate. This stands in stark contrast to the 50% productivity increase (2% annually) observed in the overall economy and the remarkable 90% surge (3% annually) witnessed in the manufacturing sector during the same period.

McKinsey's analysis has identified six key issues acting as barriers to productivity growth in construction. These challenges, as outlined by the consultancy, are:
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