Chapter
1 - Introduction
In this introductory chapter,
the importance of productivity to the construction industry will be set
out as a primary information for better understanding. The originality
of this research is also stated in the problem statement as a rationale
behind this survey. Finally, the objective of this research will be developed.
1.1 Construction and Productivity
Construction productivity was being concerned to have improvement in the
report of the Construction Industry Review Committee (CIRC) [1]
' the construction industry
must improve its efficiency and productivity substantially to stay competitive.'
This clearly suggested that construction
industry is necessarily to find out the root cause of low productivity.
a) Importance of Construction
Productivity
The Asian Productivity Organization [2] has cited that any improvement
in construction productivity would make a substantial beneficial to the
national economy. Higher production output, lower inflation rate and further
productivity growth could be benefited from productivity improvement.
Owning to the economic downturn
in Hong Kong, the construction industry should subsequently improve the
productivity to stay competitive as mentioned by the Construction Industry
Review Committee.
The foreign contractors have been
successful in Hong Kong construction, it may soon become a treat to Hong
Kong contractors. However, the local contractors are generally do not
have incentives to improve productivity, and it would become the main
cause if they are likely to be substituted by the foreign contractors.
With a higher productivity, the
local contractors are able to reduce the construction cost and therefore
benefit from a higher profit. Also, the contractor can even offer a lower
bidding price to increase his competitiveness.
b) Construction Productivity
Growth Rate
Hong Kong construction industry is facing the problem of low productivity
growth rate. As shown in Table 1.1, the growth rate of the productivity
has been increased in the year 1994-1996. However, starting from the year
1997, the productivity growth rate started to decrease. Although this
decreasing trend was not continued to the year of 1999, the productivity
growth rate was still lower than that in 1993-1994, the years when economics
bloomed.
Table 1.1 Growth Rate of Productivity
(%) in Hong Kong Construction Industry
|
1994
|
1995
|
1996
|
1997
|
1998
|
1999
|
GDP contributed by construction industry at current prices(HK$
million) |
46,325
|
54,761
|
65,058
|
71,650
|
69,937
|
66,111
|
Workforce Employed(No.) |
220,500
|
229,300
|
269,600
|
306,200
|
319,500
|
289,200
|
Productivity* |
0.210
|
0.239
|
0.241
|
0.234
|
0.219
|
0.229
|
Growth Rate (%)** |
7.80
|
13.67
|
0.84
|
-3.03
|
-6.85
|
4.37
|
Source:
GDP and Components: Hong Kong. Census and Statistics Dept., Estimates
of Gross Domestic Product 1961-1999 [3] [4] [5].
Workforce Employed: Census and Statistics Department, Hong Kong Annual
Digest of Statistics 2001, Hong Kong: Govt. Printer [6]
* The productivity
was computed by the formula:
GDP contributed
by construction industry at current prices (HK$ million)
|
Workforce
Employed (No.)
|
** Productivity growth rate
was computed by:
|
New
productivity -
|
productivity
at past year
|
new
productivity
|
|
c) Labour Productivity
Manpower is the main element of construction productivity. Moreover, Fox
[7] cited that Hong Kong construction industry is a labour intensive industry
as the construction industry employs a high proportion of the total of
Hong Kong. It makes the labour productivity more important in Hong Kong.
Unfortunately, the labour productivity
in Hong Kong is relatively low as compared with other countries. Fox [8]
had done a comparison of Hong Kong productivity with that of Sydney, Melbourne
and Brisbane. The research data are showed at table 1.1 below:
Table 1.2 Comparison of Overall Unit Cost/Productivity
Overall Unit Costs/ Productivity
|
Sydney
|
Melbourne
|
Brisbane
|
Hong
Kong
|
Unit
building cost |
1651
|
1662
|
1386
|
1050
|
Aus
$ per m2 of building floor area |
100
|
101
|
84
|
64
|
Sydney
= 100 |
|
|
|
|
Total
labour cost as |
36.30%
|
37.60%
|
33.80%
|
30%
|
a
percentage of total tender sum |
|
|
|
|
Total
man hours per |
20.3
|
20
|
16.8
|
28
|
sq.
metre of building floor area |
|
|
|
|
Brisbane
= 100 |
121
|
119
|
100
|
167
|
Sydney
= 100 |
100
|
99
|
83
|
140
|
Source: Royal
Commission into Productivity in the Building Industry in N.S.W. |
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From the table, we can see that
the labour cost of Hong Kong is the lowest among all. While the number
of people needed to build the same amount of floor space is much higher
in Hong Kong. This can simply illustrate that the productivity in Hong
Kong is much lower than other foreign countries. Fox continued that Hong
Kong production methods require about 66% more workers than in Brisbane,
or 40% more than in Sydney.
With workforce being the most
crucial factor in Hong Kong productivity and the comparatively low labour
productivity, we have to tackle the site productivity problems/inefficient
encountered by the construction workforce first as they are the root causes
leading to the low productivity. That is the reason why a site level investigation
is conducted in this research.
1.2 Problem Statement
The construction industry in Hong Kong is currently suffering from low
labour productivity when comparing with other countries. Labour is considered
to be a major influential factor since Hong Kong construction industry
is a labour intensive industry.
In order to overcome this problem, the current weaknesses must be found
out. Unfortunately, in the past ten years, no research conducted was aimed
at finding the on site productivity problems. This research is therefore
aimed at identifying the root causes of poor labour productivity.
In the light of the survey conducted
by Zakeri et al [9], which provided a good foundation and accepted method
for investigating the on site productivity problems, this research largely
followed the procedures and methods adopted by Zakeri et al.
1.3
Research Objective
Aim of Research: To identify the problems hindering Hong Kong's
labour productivity.
Objectives: |
1. |
To identify the
possible productivity factors hindering Hong Kong's labour productivity
from an extensive study of literatures. |
2. |
To collect data
of time lost estimating on the productivity factors by sending questionnaires
to the construction site staff in various sites. |
3. |
To rank the data
obtained and discuss on the top 10 productivity problems. |
|