Construction efficiency: A tale of two developed countries
Date of this Version
Purpose - The measurement of construction performance is a vexed problem. Despite much research effort, there remains little agreement over what to measure and how to measure it. The problem is made even more complicated by the desire to benchmark national industry performance against that of other countries. As clearly construction cost forms part of the analysis, the mere adjustment of cost data to an "international currency" has undermined past attempts to draw any meaningful conclusions. The paper aims to discuss these issues. Design/methodology/approach - This paper introduces a new method for comparing international construction efficiency, tested on a data set of 337 modern high-rise buildings in both Australia and the USA, and in so doing demonstrates that the ratio of cost over time is capable of ranking the efficiency of projects, building contractors, cities and even entire industries - not only today, but retrospectively over time. Findings - It is concluded that, based on data from the largest five cities in each country, efficiency on site is improving in both countries. The growth in baseline cost/m2 suggests a possible rise in project complexity over time. While the trend in efficiency improvement is similar, there is evidence that base costs in Australia have outstripped the USA, meaning that "real" construction efficiency in Australia is relatively less. If Australia held an advantage in the past, then it seems that advantage might be disappearing. The USA is outperforming Australia in terms of construction efficiency by 1.10 per cent per annum.
This document has been peer reviewed.