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Study: US Industry is Overspending $177B/Year

Wednesday, August 15, 2018

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A new survey that interviewed nearly 600 participants has found that the construction industry is spending $177.5 billion in non-optimal activities, such as fixing mistakes, looking for project data and managing conflict resolution.

Construction Productivity software company PlanGrid partnered with management consulting firm FMI Corporation to conduct the survey titled "Construction Disconnected" in April 2018.

© iStock.com / tolgart

A new survey that interviewed nearly 600 participants has found that the construction industry is spending $177.5 billion in non-optimal activities, such as fixing mistakes, looking for project data and managing conflict resolution.

Those interviewed included 599 construction industry leaders: 500 respondents were from the United States, 99 were from Australia, New Zealand, the United Kingdom and Canada.

Of those surveyed, 49 percent work for general contractor firms, 36 percent were from specialty trades and 15 percent were owners. More than 300 of the respondents were in the commercial sector while the others represented industrial, manufacturing, heavy civil, healthcare, oil and gas, education and government fields.

The Findings

Key survey results include:

  • Construction workers lose almost two full working days each week solving avoidable issues and searching for project information;
  • Almost half of all rework is due to poor communication among project stakeholders, and poor project information;
  • Workers are not taking full advantage of mobile devices and IT investments; and
  • Technology is expected to improve data management and increase productivity.

The study also found that rework caused by miscommunication as well as inaccurate and inaccessible information will cost the U.S. construction industry more than $31 billion this year.

In terms of time lost due to conflict resolution, the survey found that, on average, each construction project team member spends more than 14 hours each week dealing with conflict, rework and other issues that take away from main priorities. The data estimates that this wasted time could equate to $2 billion in costs for the “average, mid-sized construction company.”

The survey also found that 48 percent of all rework on U.S. construction sites is caused by miscommunication or poor project data.

“The top three causes of miscommunication are unresponsiveness of team members; the inability of project stakeholders to collaborate effectively; and the lack of a common platform for all team members to communicate and share project data,” according to the survey.

© iStock.com / MonthiraYodtiwong

The survey also found that 48 percent of all rework on U.S. construction sites is caused by miscommunication or poor project data.

“Respondents also said 22 percent of rework is due to poor project information, where the top three causes are erroneous or incorrect project data, difficulty accessing project data and the inability of project stakeholders to easily share information about the project.”

Where technology is concerned, the survey found that more than 80 percent of companies that provide smartphones or tablets to workers don’t use any applications (other than basic email, texting and phone calls) to access project data or collaboration.

However, survey respondents shared the most common goals for technology adoption, which include providing better access to project data (58 percent), improving project productivity (57 percent) and increasing the accuracy of project information (56 percent).

“Poor communication among team members, and incorrect or inaccessible information that workers need to do their job is costing the construction industry tens of billions of dollars annually,” said Jay Snyder, FMI technology practice lead.

“The majority of industry stakeholders seem to be at a loss for how to remedy these systemic and expensive problems. While construction firms continue to invest in technology, the business-critical issues of communication and data management need more strategic attention than they currently receive.”

   

Tagged categories: Industry surveys; Market data; Research and development; Spending

Comment from Michael Halliwell, (8/15/2018, 11:18 AM)

Communication is key....and with more design-build happening, I can't see this problem getting better....worse actually...as project requirements and goals change on the fly.


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