Free Falling: Productivity of U.S. Construction Industry Half of 1960s Level

While productivity improves in almost every sector of the U.S. economy, it's dropping quickly in the construction industry.

1 minute read

August 23, 2017, 9:00 AM PDT

By James Brasuell @CasualBrasuell


Hudson Yards Towers

Metropolitan Transportation Authority of the State of New York / Wikimedia Commons

"Superficially, the construction industry would seem healthy enough," according to an article in The Economist. "Yet more than 90% of the world’s infrastructure projects are either late or over-budget, says Bent Flyvbjerg of Saïd Business School at Oxford University."

"Construction holds the dubious honour of having the lowest productivity gains of any industry," adds the article, citing data from McKinsey. The United States provides a particularly bad example of the problem. Here, productivity "has plunged by half since the late 1960s."

The article digs into the list of potential causes for the woes of the industry, discarding one of the usual suspects as the culprit (i.e., "Prices for building materials are not to blame). Instead, the article suggests two structural trends are to blame: the work is less capital intensive and the industry has yet to consolidate.

Thursday, August 17, 2017 in The Economist

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

White and purple sign for Slow Street in San Francisco, California with people crossing crosswalk.

San Francisco Suspends Traffic Calming Amidst Record Deaths

Citing “a challenging fiscal landscape,” the city will cease the program on the heels of 42 traffic deaths, including 24 pedestrians.

July 1, 2025 - KQED

Google street view of red brick multi-story power plant building in Pittsburgh, PA.

Defunct Pittsburgh Power Plant to Become Residential Tower

A decommissioned steam heat plant will be redeveloped into almost 100 affordable housing units.

July 4 - Pittsburgh Post-Gazette

Cyclist on protected bike lane in middle of street in Washington D.C. with Washington Monument obelisk visible in background.

Trump Prompts Restructuring of Transportation Research Board in “Unprecedented Overreach”

The TRB has eliminated more than half of its committees including those focused on climate, equity, and cities.

July 4 - Streetsblog USA

Blue and silver Amtrak train at small station.

Amtrak Rolls Out New Orleans to Alabama “Mardi Gras” Train

The new service will operate morning and evening departures between Mobile and New Orleans.

July 3 - New Orleans City Business