Best Paper Award

This paper compares the relative productivity of construction industry sectors with significant off-site fabrication with more traditional on-site sectors. The off-site sectors, such as curtain wall, structural steel, and precast concrete fabrication, consistently show higher productivity growth than on-site sectors. Furthermore, the value-added content of the off-site sectors is increasing faster than that of the on-site sectors, indicating faster productivity growth. However, the off-site sectors are not traditionally considered as part of the construction industry by the U.S. Economic Census, but rather as manufacturing. Ignoring the off-site segments of construction has led to significant underestimation of construction productivity.

The authors examine the relative productivity of construction sectors in the United States with significant off-site and on-site production activities. This is done by examining the relative productivity among off-site and on-site work related to curtain walls, structural steel, precast concrete, drywall and insulation, cast-in-place concrete, and elevators. Using U.S. Economic Census data, the relative difference in the value added per employee in the on-site and off-site work related to these construction components is identified. In all cases, the authors find the value added of off-site work is greater and increasing more rapidly than that of related on-site work. Their arguments are very convincing, and the methods of analyses are outstanding.

The authors argue that one possible reason why other researchers have identified declining productivity in construction (Teicholtz 2001 and Allen 1985) is because industry measures have ignored the increased productivity occurring in off-site segments of the construction industry, as many of these segments are typically classified as manufacturing by the U.S. Economic Census. The implications of the findings suggest that existing measures of the construction industry’s output are underestimating the true magnitude of the value added by many construction sectors due to accounting policies by governmental agencies. The paper not only has strong implications for the readers of the Journal, but it also has potentially far reaching implications in the economic arena as well.

This paper was competitively selected from 103 papers that were published by the Journal of Construction Engineering and Management in 2008. Congratulations to Dr. Eastman and Dr. Sacks!