According to the CEO of the Australian Constructors Association, Jon Davies, construction productivity is now lower than when Rolling Stone dubbed "Smells Like Teen Spirit" the Anthem of a Generation in 1992 (1).
This performance has prompted the ACA to produce "Nailing Construction Productivity. A Blueprint for Reform", which recommends developing a National Construction Strategy to improve outcomes (2).
A crucial part of the strategy would be the creation of a data alliance to develop and track some "simple metrics". One of which the ACA has dubbed the "dollar in the dirt".
As described by Mr Davies, the "dollar in the dirt" is similar to the "pound in the ground" metric used in the UK.
In simple terms, it attempts to calculate what percentage of the total cost to build a project is made up of the direct costs of construction, e.g. cost of materials and cost of construction labour, as opposed to the cost of project design, procurement, management and governance, often referred to as indirect cost.
The theory is that direct costs, as the name implies, are more directly linked to outputs (finished projects) than indirect costs. Any reduction in indirect cost relative to direct cost should lead to an improvement in overall productivity.
As Mr Davies admits, this is a very crude measure, and there are limits to the potential to reduce indirect costs without compromising safety, quality and design. Still, there are significant opportunities to improve the efficiency of how we procure, deliver and govern projects.
In his blog post, Mr Davies suggests that this information would be anonymised and shared across the industry and that this is a role that "an independent body like Infrastructure Australia" could undertake.
Mr Davies also suggests that once established, the role could expand to include a broader range of data to better inform decision-making at all stages in the project life cycle.
As the peak body for built environment cost professionals in Australia, the AIQS is a natural partner in this endeavour. So, I hope the National Executive will explore opportunities for collaboration with the ACA.
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(1) To view the blog post, click the link below . Note: Edit Mr Davies uses the example of the Movie Home alone two and the sale of CDs generally to describe the year 1992.
https://www.constructors.com.au/dollar-in-the-dirt-an-easier-way-to-measure-productivity/
(2) To view the report, click the link below.
https://www.constructors.com.au/advocacy/reports/nailing-construction-productivity/
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