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Trends of productivity growth in the construction industry across Europe, US and Japan

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  • Mohamed Abdel-Wahab
  • Bernard Vogl

Abstract

Productivity is a key driver for economic growth and prosperity in any country. The pursuit of productivity growth requires an understanding of the factors affecting productivity. The trend of productivity growth, along with the possible factors underlying such growth across Europe, the US and Japan, is thus examined. In particular, there is a focus on comparing the productivity performance of the construction sector to that of other industries. Using the recently released EU KLEMS1 database,2 a growth accounting framework was adopted to assess the contribution of the following factors to productivity growth (during 1971-2005): capital, labour quality and total factor productivity (TFP). It was found that there is a general slowdown in labour productivity growth in total industries including construction across major OECD countries, with the exception of the UK. The differences in labour productivity growth between construction and total industries can be largely explained by construction's poor TFP performance. With the exception of the UK, TFP negatively contributed to labour productivity growth in the period 1990-2005, suggesting that the industry has become less efficient in combining the factors of production. That phenomenon seems to be consistent across all selected countries and warrants further investigation. Indeed a better understanding of the factors underlying productivity growth in OECD countries is a prerequisite for effective intervention of policy makers to support sustained productivity growth.

Suggested Citation

  • Mohamed Abdel-Wahab & Bernard Vogl, 2011. "Trends of productivity growth in the construction industry across Europe, US and Japan," Construction Management and Economics, Taylor & Francis Journals, vol. 29(6), pages 635-644.
  • Handle: RePEc:taf:conmgt:v:29:y:2011:i:6:p:635-644
    DOI: 10.1080/01446193.2011.573568
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    References listed on IDEAS

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    1. Andrew Sharpe, 2001. "Productivity Trends in the Construction Sector in Canada: A Case of Lagging Technical Progress," International Productivity Monitor, Centre for the Study of Living Standards, vol. 3, pages 52-68, Fall.
    2. Hilary Steedman, 1999. "Looking into the Qualifications Black Box: What can International Surveys Tell Us About Basic Competence?," CEP Discussion Papers dp0431, Centre for Economic Performance, LSE.
    3. Bloom, Nick & Dorgan, Stephen & Dowdy, John & Van Reenen, John & Rippin, Tom, 2005. "Management practices across firms and nations," LSE Research Online Documents on Economics 4669, London School of Economics and Political Science, LSE Library.
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    Cited by:

    1. Kapelko, Magdalena & Oude Lansink, Alfons & Stefanou, Spiro E., 2014. "Assessing dynamic inefficiency of the Spanish construction sector pre- and post-financial crisis," European Journal of Operational Research, Elsevier, vol. 237(1), pages 349-357.
    2. Kapelko, M. & Horta, I.M. & Camanho, A.S. & Oude Lansink, A., 2015. "Measurement of input-specific productivity growth with an application to the construction industry in Spain and Portugal," International Journal of Production Economics, Elsevier, vol. 166(C), pages 64-71.

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    Keywords

    Productivity; growth accounting; skills; capital;

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