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KPI analysis confirms squeeze on margins

7 Jul 11 Analysis of UK construction industry key performance indicators (KPIs) show that profitability has fallen 2.7 percentage points but environmental performance is improving.

Data from thousands of projects completed during 2010 has been analysed by Glenigan and Constructing Excellence on behalf of The Department for Business, Innovation and Skills (BIS) and the Office for National Statistics (ONS).

Glenigan economics director Allan Wilén said: "The recession is leaving its mark. Industry profitability has fallen from 7.7% to 5% as workloads have fallen, margins squeezed and labour shed. The retained workforce is being more intensively deployed and the sharp jump in productivity over the last year is likely to include cyclical factors, alongside any incremental efficiency improvements. Despite challenging economic conditions, previous improvements in client satisfaction have been sustained and predictability of project delivery, both to cost and budget, has improved further."

Environmental performance has also improved, as evidenced by 12 out of 13 measures. Constructing Excellence director Jon de Souza said: "The 2011 KPIs show that the industry is delivering on the green agenda, with substantial improvements recorded in on-site water usage, vehicle movements and construction waste. The industry is also delivering buildings and structures with better environmental performance, for example the average housing SAP ratings for energy use reached an all-time best of 82.8."

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